[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]

THE IMPACT OF THE EMPLOYER MANDATE'S
DEFINITION OF FULL-TIME EMPLOYEE ON
JOBS AND OPPORTUNITIES

=======================================================================

HEARING

BEFORE THE

COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED THIRTEENTH CONGRESS

SECOND SESSION

__________

JANUARY 28, 2014

__________

Serial No. 113-FC14

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Printed for the use of the Committee on Ways and Means

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2016

COMMITTEE ON WAYS AND MEANS

DAVE CAMP, Michigan, Chairman

SAM JOHNSON, Texas SANDER M. LEVIN, Michigan
KEVIN BRADY, Texas CHARLES B. RANGEL, New York
PAUL RYAN, Wisconsin JIM MCDERMOTT, Washington
DEVIN NUNES, California JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio RICHARD E. NEAL, Massachusetts
DAVID G. REICHERT, Washington XAVIER BECERRA, California
CHARLES W. BOUSTANY, JR., Louisiana LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois MIKE THOMPSON, California
JIM GERLACH, Pennsylvania JOHN B. LARSON, Connecticut
TOM PRICE, Georgia EARL BLUMENAUER, Oregon
VERN BUCHANAN, Florida RON KIND, Wisconsin
ADRIAN SMITH, Nebraska BILL PASCRELL, JR., New Jersey
AARON SCHOCK, Illinois JOSEPH CROWLEY, New York
LYNN JENKINS, Kansas ALLYSON SCHWARTZ, Pennsylvania
ERIK PAULSEN, Minnesota DANNY DAVIS, Illinois
KENNY MARCHANT, Texas LINDA SANCHEZ, California
DIANE BLACK, Tennessee
TOM REED, New York
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
TIM GRIFFIN, Arkansas
JIM RENACCI, Ohio

Jennifer M. Safavian, Staff Director and General Counsel

Janice Mays, Minority Chief Counsel

C O N T E N T S

__________

Page

Advisory of January 28, 2014 announcing the hearing.............. 2

WITNESSES

Peter Anastos, Owner and Co-Founder, Maine Course Hospitality
Group.......................................................... 19
Lanhee J. Chen, Ph.D., Research Fellow, Hoover Institution,
Lecturer in Public Policy, and Lecturer in Law, Stanford
University..................................................... 7
Helen Levy, Ph.D., Research Associate Professor, University of
Michigan Institute for Social Research, School of Public
Health, and Gerald R. Ford School of Public Policy............. 40
Thomas J. Snyder, President, Ivy Tech Community College.......... 36
E. Neil Trautwein, Vice President and Employee Benefits Policy
Counsel, National Retail Federation............................ 28

SUBMISSIONS FOR THE RECORD

The Honorable Sander Levin....................................... 82
The Honorable Lynne Jenkins...................................... 86
The Honorable Charles Boustany................................... 88

THE IMPACT OF THE EMPLOYER MANDATE'S
DEFINITION OF FULL-TIME EMPLOYEE ON
JOBS AND OPPORTUNITIES

----------

TUESDAY, JANUARY 28, 2014

U.S. House of Representatives,
Committee on Ways and Means,
Washington, DC.

The Committee met, pursuant to notice, at 10:05 a.m., in
Room 1100, Longworth House Office Building, Hon. Dave Camp
[Chairman of the Committee] presiding.

[The advisory announcing the hearing follows:]

ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

CONTACT: (202) 225-3625 FOR IMMEDIATE RELEASE

Tuesday, January 21, 2014
No. FC-14

Chairman Camp Announces Hearing on

the Impact of the Employer Mandate's

Definition of Full-time Employee on

Jobs and Opportunities

House Committee on Ways and Means Chairman Dave Camp (R-MI) today
announced that the Committee will hold a hearing on the impact of the
Affordable Care Act's (ACA) employer mandate, which defines full-time
employment as 30 hours per week for the purposes of applying the
employer mandate. The Committee will hear testimony from a broad cross
section of industries affected by the rule. The hearing will take place
on Tuesday, January 28, 2014, in 1100 Longworth House Office Building,
beginning at 10:00 a.m.

In view of the limited time available to hear from the witnesses,
oral testimony at this hearing will be from invited witnesses only.
However, any individual or organization not scheduled for an appearance
may submit a written statement for consideration by the Committee and
for inclusion in the printed record.

BACKGROUND:

The ACA imposes a requirement that employers with more than 50
full-time employees (FTEs) offer health coverage to their workers or be
subject to one of two new penalty taxes. First, employers that do not
offer qualified health insurance and have at least one employee
receiving a tax credit for insurance through the Exchange are subject
to a $2,000 penalty tax for each FTE in excess of the first 30. Second,
employers who offer insurance that fails to meet the Federal
Government's standard for affordability are required to pay a penalty
tax for every employee who receives a tax credit to purchase coverage
through the Exchange. This penalty tax will equal the lesser of (1)
$3,000 per employee who receives subsidized coverage in the Exchange or
(2) the penalty tax the employer would have to pay if it did not offer
health insurance (described above).

Prior to the enactment of the ACA, it was common practice for
employers to use 40 hours as the definition of a full-time employee.
However, under Internal Revenue Code section 4980H, enacted by the ACA,
an FTE is defined as an employee who works at least 30 hours per week.
Some commentators have expressed concern that this rule has created an
incentive for employers to limit the number of employees whose hours
exceed 30 hours per week because the penalty taxes applied are
calculated based, in part, on the number of employees who exceed 30
hours. Industries that employ lower skill workers, and often provide
entry-level opportunities for younger workers, are disproportionately
affected by the 30-hour rule. For example, employers in the restaurant,
franchise, home health, movie theater, retail and grocery industries
have been reported to have reduced or are planning to reduce hours for
their part-time workers as a result of the 30-hour rule. Additionally,
school districts, community colleges and universities have reduced work
hours for students, adjunct professors and support staff.

Today, more than 159 million Americans receive health coverage from
their employers, making employer-sponsored insurance (ESI) the largest
single source of private health coverage. Yet, not all businesses have
the resources to provide coverage to their employees, and not all
employees seek jobs for the sole purpose of receiving ESI.

While the Treasury Department has suspended enforcement of the
employer mandate for 2014, the mandate and associated penalty taxes
come into effect on January 1, 2015.

In announcing the hearing, Chairman Camp stated, ``Washington
should be removing obstacles to individuals finding full-time work, not
creating them. Instead, ObamaCare imposes large and disproportionate
costs on employers and has created a new class of employees, the
`ObamaCare 29ers.' Many of these people have either lost or risk losing
their full-time status and are being held back through no fault of
their own but instead by a misguided law. As a result, they will see
fewer hours and lower wages, and that is the opposite of the direction
we need to be going to make our economy stronger for families and job
creators.''

FOCUS OF THE HEARING:

The hearing will focus on the employer mandate and the so-called
30-hour rule of the Affordable Care Act.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Please Note: Any person(s) and/or organization(s) wishing to submit
for the hearing record must follow the appropriate link on the hearing
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From the Committee homepage, https://waysandmeans.house.gov, select
``Hearings.'' Select the hearing for which you would like to submit,
and click on the link entitled, ``Click here to provide a submission
for the record.'' Once you have followed the online instructions,
submit all requested information. ATTACH your submission as a Word
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by the close of business on Tuesday, February 11, 2014. Finally, please
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Police will refuse sealed-package deliveries to all House Office
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please call (202) 225-1721 or (202) 225-3625.

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Chairman CAMP. Good morning. This hearing will come to
order.
Less than 7 months ago, the Administration announced that
they would delay the employer mandate for a year. They
acknowledged what many had been saying since the law passed,
the employer mandate is bad for business and, in turn, bad for
American workers.
While the Administration offered a brief reprieve from the
employer mandate, the pain ObamaCare is inflicting both on job
creators and hardworking Americans is only getting worse.
As the President prepares to deliver his State of the Union
speech tonight, he will likely and appropriately discuss
pressing issues facing millions of Americans such as
unemployment, education, and economic opportunity. However,
what we will be missing is the admission that the President's
signature policy achievement is forcing Americans to lose their
jobs, have their wages cut, and taking educators out of the
classroom.
The law is increasing costs for families and individuals
already struggling in this economy. Specifically, the 30-hour
rule in the healthcare law, which is the topic of the hearing
today, is forcing employers to make the tough decision of
cutting hours and workers and preventing them from growing
their businesses.
The people hit the hardest by the law are not bankers,
lawyers, and doctors. They are the single mothers working a
restaurant job, the college students paying for their own
education by working at the local grocery store, or the
firefighters living down the street.
In fact, a report by the University of California at
Berkeley Center for Labor Research and Education concluded, and
I quote, ``Those at highest risk are workers in predominately
low-wage industries that are right on the cusp of what is
considered full-time work under the law.'' These are Americans
living paycheck to paycheck, who are already paying more for
food and more for their health care, and are now being hurt
again by the burdens of the President's healthcare law.
According to a new Hoover Institution study, the 30-hour
rule will affect over 2.6 million workers making, on average,
under $30,000 per year, and almost 90 percent of those impacted
do not have college degrees. I am sure every Member that sits
here today has heard stories from families who have had their
hours cut and are now forced to make tough financial decisions.
A faculty member at a community college in my district
wrote to me recently and said, and I am quoting here, ``I hold
two part-time positions. Today I was informed I cannot continue
to do both jobs because of ObamaCare laws. Beginning in August,
I will no longer be advising and will lose approximately a
third of my income. Last year I bought a house, a house I now
fear I will no longer be able to afford.''
Another one of the people I represent in Michigan told a
story of struggling to find a job as a result of the law,
writing, and I am quoting here, ``I am currently unemployed and
seeking work in our greater mid-Michigan area. After looking
for employment for some time now, I have discovered I have a
common theme among many hiring companies in the area--part-time
work positions only available. From what I understand, many
employers are now reducing hours, changing full-time positions
into multiple part-time staffing, as to avoid the ACA.''
I hope today we can move past the denials that this law
does not have an effect on jobs. When I read story after story
of how the 30-hour rule is cutting hours for adjunct
professors, cutting hours for part-time firefighters, for
hourly workers, and for low-income Americans struggling to make
ends meet, it is hard to deny the reality that this law is
hurting average Americans. The White House does not want to
believe it, but we need to understand that the problem is real.
Republicans are working toward solutions so hardworking
Americans do not have to worry about their hours and wages
being cut as a result of ObamaCare. Todd Young's legislation,
the Save American Workers Act, would repeal the 30-hour
definition of full-time employment and restore the traditional
40-hour definition so we can have more Americans working full-
time jobs.
Getting Americans working again, or at least restoring the
number of hours they used to be able to work, should not be a
partisan issue. Both parties should be able to come together to
ensure that we remove barriers to job growth and wage
increases. The best thing we could do is repeal the entire law,
but that cannot and should not deter us from looking at
specific pieces of the law, which is what we will do today.
Before I recognize Ranking Member Levin for the purposes of
an opening statement, I ask unanimous consent that all Members'
written statements be included in the record. And without
objection, so ordered.
I now recognize Ranking Member Levin for his opening
statement.
Mr. LEVIN. Thank you very much, and welcome. If I might, a
special welcome to Dr. Levy from the University of Michigan.
Mr. Camp and I have a special hello to you.
Chairman CAMP. Yes.
Mr. LEVIN. Today this Committee is holding a hearing on an
issue that has been rehashed many times. Yet it has failed to
have a single hearing on an issue also in our jurisdiction that
already has directly affected the lives of 1.6 million people,
their total loss of unemployment insurance.
A small percentage of employers, less than 1 percent, will
be affected by the employer responsibility provision in the
ACA. But more than 1.6 million long-term unemployed are facing
right now the loss of their benefits, their cars, their homes.
I met last week at home with 25 long-term unemployed
workers to hear their stories. One of them, Josie Masano of
Saint Clair Shores, Michigan, is here today and will be my
guest at the State of the Union tonight.
This hearing should be for us listening to her story and
the stories of so many others, including that just mentioned by
our Chairman. Instead, we are here today so that the majority
can continue its endless pursuit of undermining a law that is
already helping millions and is here to stay.
Today the majority brings us together to discuss the impact
of ACA on jobs, employers, and the economy. Here is what they
are unlikely to say.
First, a very small percentage of employers, less than 1
percent, will be affected by the so-called employer mandate
provision within the law. Not only does it apply to businesses
with 50 or more employees, making 95 percent of businesses
exempt, all but 5 percent of businesses with more than 50
employees already offer their employees health insurance.
Providing employee coverage is both economic and a standard
of business practice for businesses with more than 50
employees. In fact, this is why we use 50 employees as the
cutoff for an exempt small business. It has been that way for
years, and few expect that to change as a result of ACA.
Indeed, a recent survey found that 99 percent of employers
will continue to offer coverage. In a real-world experience,
that shows that employer-sponsored insurance in Massachusetts
has increased since the State reforms.
Second, since the Affordable Care Act was signed into law 4
years ago, private employers have added more than 8 million
jobs. More than 90 percent of the rise in employment nationwide
has been due to workers in full-time jobs.
In fact, workers in the restaurant industry have seen their
average weekly hours increase since the law was signed,
contrary to the notion that there has been a widespread shift
to reduce hours in that sector. Those who have threatened to
cut hours in response to the law have been making such threats
more than a year before the law was in effect.
Third, the Affordable Care Act is good for individuals who
have dreamed of starting their own business or taking the risk
to change jobs and help grow a small business. These
entrepreneurs, like the 3 million people who have enrolled now,
can get private health insurance through the Federal- and
State-based marketplaces.
But, unfortunately, for 1.6 million job-seeking Americans,
the last time this full Committee met for a hearing on a topic
other than the Affordable Care Act was on July 18, 6 months and
10 days ago. Hope springs eternal that this Committee can
restore its focus to the broad range of issues under our
jurisdiction, which have the power to create economic growth
and opportunity for our Nation and all our citizens. Thank you.
Chairman CAMP. Thank you, Mr. Levin.
I now want to welcome our panel of witnesses. First, I
would like to welcome Lanhee J. Chen, a Research Fellow for the
Hoover Institution at Stanford University. Second, we will hear
from Peter Anastos, the owner and co-founder of the Maine
Course Hospitality Group.
Third, we will hear from Neil Trautwein, Vice President and
Employee Benefits Policy Counsel at the National Retail
Federation. Fourth, we will hear from Thomas J. Snyder, the
President of Ivy Tech Community College. And, finally, we will
hear from Helen Levy, a Research Associate Professor at the
University of Michigan.
Thank you all for being with us today. The Committee has
received each of your statements. They will be made part of the
formal hearing record. Each of you will be recognized for 5
minutes for your oral testimony and, Mr. Chen, we will begin
with you.
You are recognized for 5 minutes.

STATEMENT OF LANHEE J. CHEN, PH.D., RESEARCH FELLOW, HOOVER
INSTITUTION, LECTURER IN PUBLIC POLICY, AND LECTURER IN LAW,
STANFORD UNIVERSITY

Mr. CHEN. Thank you, Mr. Chairman. Good morning.
Mr. Chairman, Ranking Member Levin, and Members of the
Committee, thank you for the invitation to appear before you
today to discuss the Affordable Care Act and the impact of its
employer mandate's definition of full-time employee on jobs and
opportunities. My name is Lanhee Chen. I am a Research Fellow
at the Hoover Institution, a Lecturer in Public Policy, and a
Lecturer in Law at Stanford University.
The Affordable Care Act, as a whole, creates significant
disincentives for businesses to grow and hire workers, and no
element of the law is more onerous in this regard than its
employer mandate. And within the mandate, no provision is more
controversial or more harmful to workers who can least afford
it than the law's definition of a full-time employee as someone
who works an average of 30 hours per week.
This seemingly small provision creates large incentives for
employers to reduce the hours of employment for some workers. I
argue that the 30-hour rule is harmful for three reasons, and I
will briefly discuss each of these arguments.
First, the 30-hour rule hurts precisely those workers who
can least afford to be hurt. Second, it creates additional
costs and administrative complexities for employers which will
prevent them from growing their businesses. And, finally, it
uniquely hurts educational opportunities by adversely affecting
both workers and students in school districts, colleges, and
universities.
First, the ACA's 30-hour rule adversely affects those who
can least afford to be hurt. Currently, 7.8 million Americans
are working part-time but want full-time work. Indeed, the 30-
hour rule makes it more unlikely that these Americans can get
the jobs they want and need.
Chairman Camp mentioned earlier a study from the University
of California at Berkeley which found that about 2 million
Americans are part of a vulnerable population to have their
hours reduced as a result of the ACA's 30-hour rule. My
colleagues and I at the Hoover Institution recently updated and
refined this study to conclude that 2.6 million Americans are
in danger because of the 30-hour rule.
Our research also found that the 30-hour rule
disproportionally harms women, those without a college degree,
young Americans, and the poor. The industries most likely to be
harmed are workers working in the retail trade, restaurants,
accommodation, building services, and nursing homes.
This matches up, indeed, with the anecdotal information we
are receiving from employers. One media outlet reported in
December of 2013 that 388 employers have already restricted
work hours to below 30 hours per week because of the ACA's 30-
hour rule.
Notable examples include Sea World Entertainment, David's
Bridal, several Subway Restaurants franchisees, and Lands' End.
Regal Entertainment Group, which operates more than 500 movie
theaters across 38 States, cut hours for non-salaried workers
to stay below the 30-hour threshold.
And, indeed, this phenomenon is not limited to the private
sector. In the public sector, municipalities and States, from
my home State of California, in Long Beach, to your home State,
Mr. Chairman and Ranking Member Levin, of Michigan, the City of
Auburn Hills, have reduced the number of hours for part-time
employees in order to deal with the ACA's 30-hour rule.
Second, the ACA's creation of a separate rule governing the
definition of a full-time employee creates added administrative
complexities and costs for employers. These added costs and
complexities may create disincentives for hiring and growth.
The 30-hour rule creates additional health benefit costs
for employers. Indeed, those employers who currently offer
health insurance to all of their full-time employees and intend
to continue doing so will face added costs. And given the
individual mandate and what we expect to be higher premiums on
the exchanges, employers may see many of their employees opting
for health insurance, further raising their costs.
Employers also face significant new recordkeeping and
reporting requirements in complying with the 30-hour rule.
Regulatory guidance issued recently by the Internal Revenue
Service mandates complicated calculations and recordkeeping
regarding an employee's hours of service.
The rules differ by whether employees are new or ongoing,
and in the case of new employees, whether they are expected to
work full-time or are variable or seasonal employees. Even
those employers that provide health coverage to all of their
full-time employees are now required to track and record those
hours of service in a way that is potentially onerous and
complicated.
Finally, the 30-hour rule must be addressed because of the
negative impact it has on school districts, colleges, and
universities. Indeed, about 225,000 workers in the educational
industry face having their hours cut because of the ACA's 30-
hour rule, and a recent analysis revealed that 100 school
districts alone, including dozens in Indiana, have either cut
worker hours or outsourced jobs to deal with the ACA's employer
mandate.
In sum, Mr. Chairman, the 30-hour rule in the Affordable
Care Act has impacts that reach far beyond our healthcare
system. Its negative effect on jobs and economic opportunities
are of greatest concern to me.
Mr. Chairman, Ranking Member Levin, and Members of the
Committee, I look forward to your questions.
[The prepared statement of Mr. Chen follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

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Chairman CAMP. Thank you very much, Mr. Chen.
Mr. Anastos, you are recognized for 5 minutes.

STATEMENT OF PETER ANASTOS, OWNER AND CO-FOUNDER, MAINE COURSE
HOSPITALITY GROUP

Mr. ANASTOS. Chairman Camp, Ranking Member Levin, and
Members of the Committee, thank you for the opportunity to
testify before you today on the impact of the employer
mandate's definition of full-time employee on jobs and
opportunities. My name is Peter Anastos, and I am an owner and
co-founder of Maine Course Hospitality Group, which owns,
operates, and manages a dozen hotels in northern New England.
We currently have three new hotels under construction, two
of which are owned by others, in Bangor and Portland, Maine,
and Burlington, Vermont. Our portfolio includes Marriott and
Hilton-branded hotels, which we operate under franchise
agreements, as well as two independent hotels. Approximately
300 people are currently employed by MCHG, which will expand to
over 500 people in the next 18 months. I appear here today on
behalf of Maine Course Hospitality Group and the International
Franchise Association.
As a large employer under the Affordable Care Act, my
business is already at a disadvantage compared to smaller
hotels, which are not required to offer health coverage to
employees. Before the Affordable Care Act passed, we had a
health benefits plan in place that offered coverage to any
employee working 30 hours or more per week, and I plan to
continue to offer that same plan with the same eligibility
requirements.
You might wonder why I am here today to speak in opposition
to a mandate that I followed before it was codified into law.
The answer is that, combined with other harmful aspects of the
employer mandate, this definition of full-time employee is what
is going to more than double, in fact maybe even triple, my
costs in the next year alone. Businesses such as mine will have
far less funds available to expand their businesses, which
would have created opportunities for employers and employees
alike.
Beginning this year, individuals who do not obtain coverage
will be subject to a tax penalty under the individual mandate.
As the tax penalty increases in the coming years, more of my
eligible employees will enroll in the company plan.
We are taking on more costs per insured employee than ever
before, and we are insuring more employees than ever before. My
employees are now forced to choose between enrolling in an
expensive employer health plan or enrolling in a plan in the
health insurance marketplace without the assistance of a
premium tax credit.
Many of my competitors have already made significant
workforce changes in order to manage costs under the law. Those
that are large employers are reducing hours of variable-hour
employees to less than 30 hours per week so as to avoid
employer mandate requirements. As a result, my competitors will
be able to offer lower prices to customers and guests.
I realize that if the threshold were raised to 40 hours,
some employers may simply lower their employees to 39 hours or
fewer. But I would submit that losing 1 hour of work and going
into an exchange is not nearly as bad as losing 11 hours of
work, 27\1/2\ percent of your work, and going into an exchange.
We refuse to do that to our business or our workers, so our
only option is to work within the law while advocating for
common-sense changes that make the law more workable for small
business owners.
Keeping these priorities in mind, one option I have is to
keep my workers who currently work 30 hours per week or more at
or above that mark, while keeping my workers currently below 30
hours per week below that mark. This will create a division in
my workforce that any smart manager would like to avoid. We
want to reward our best workers with extra hours, and this is a
perverse incentive not to do that.
As we build new hotel locations in Maine and Vermont this
year, we will most likely bring on employees that will work
below 30 hours per week initially. While this situation is not
ideal for hiring the best workers, it is all I can do to keep
myself in business while maintaining my commitment to my
current employees.
Although the White House maintains that the Affordable Care
Act does not increase part-time work, a recent study of
franchise owners by the International Franchise Association
revealed that 31 percent of franchise owners have already
reduced work hours and 27 percent have already replaced full-
time workers with part-time ones, a full year before the
employer mandate is set to take effect.
With fewer hours and less take-home pay, workers who have
had their hours cut are not only ineligible for employer-
sponsored coverage, they are also less able to afford their own
coverage.
For decades employers have used the 40-hour workweek as a
standard for workforce management. The ACA's provision
requiring employers to provide coverage to full-time employees
and defining a full-time workweek as 30 hours will cause many
employers to simply manage their employees to fewer hours.
Not only has the employer mandate discouraged job creation
and business expansion, it has also damaged existing jobs by
including a misguided statutory requirement that discarded more
than half a century of established labor policy. Even though
the employer mandate has been delayed for 1 year, key changes
are still necessary to help franchises and other small
businesses implement the law.
Several pieces of legislation have been introduced to
redefine the full-time employee as one who works at least 40
hours per week. The Forty Hours Is Full Time Act and Save
American Workers Act will accomplish this goal.
I believe that if some key changes are made, employers will
shift their attention from trying to find ways around the
employer mandate to trying to find ways to maintain financial
stability while offering coverage to deserving workers.
Thank you for the opportunity to testify before you today,
and I look forward to any questions you may have.
[The prepared statement of Mr. Anastos follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

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Chairman CAMP. Thank you, Mr. Anastos.
Mr. Trautwein, you are recognized for 5 minutes.

STATEMENT OF E. NEIL TRAUTWEIN, VICE PRESIDENT AND EMPLOYEE
BENEFITS POLICY COUNSEL, NATIONAL RETAIL FEDERATION

Mr. TRAUTWEIN. Thank you, Chairman Camp, Ranking Member
Levin, and honored Members of the Committee. Good morning. I
appreciate the opportunity to appear before you this morning to
discuss our continuing concerns regarding ACA implementation,
and more specifically, the 30-hour rule for determining full-
time employment.
NRF is the world's largest retail trade association,
representing retailers large, small, and in between, chain
restaurants, grocers, and internet retailers. Retail is the
Nation's largest private sector employer, supporting one in
four U.S. jobs, 42 million working Americans.
We believe that it is long past time to address specific
problems with the ACA like the 30-hour definition. NRF will
work with anyone willing to make changes to this law beneficial
to the industries we represent and the employees of those
companies.
We do credit the regulatory agencies for working hard and
fairly cooperatively to implement the provisions. The
Administration early on focused on our industries because of
the frequently variable nature of retail employment.
Many employees do not fit neatly into full- and part-time
categories. Compliance will be particularly challenging. This
segment of our workforce tends to be more mobile and changes
jobs frequently. Sometimes they work for multiple
establishments. So compliance is particularly challenging.
Many of the regulatory approaches developed in response to
the challenges of our workforce, such as the look-back and
stability period approach developed by the Department of
Treasury, have in turn bred additional complexity. One truly
significant challenge is the ACA's definition of full-time for
coverage eligibility at 30 hours per week on average.
NRF strongly supports the bipartisan interest in this issue
and legislation like H.R. 2575, the Save American Workers Act.
We respectfully urge that this bill, and others to address
specific shortcomings in the ACA, be enacted sooner than later.
Later may be too late.
Changing the 30-hour definition is common sense. If asked,
most Americans would assume full-time to be 40 hours per week.
A 30-hour definition forces retailers to manage to an
unfamiliar standard, whether somebody is working to 40 hours or
whether somebody is above or below 30 hours per week.
Retail and chain restaurants will be forced to fine-tune
the balance between full- and part-time, focusing on employee
status on a realtime basis. For variable-hour employees who do
not meet the new full-time standard, this will mean less income
in their pockets, and consequently, less likelihood of
obtaining coverage on their own.
Retailers are considering their options in advance of 2015.
But, technically, the counting for look-back purposes should
have already started on January 1st if they had a 1-year look-
back. Ultimately, it will be the existing part-time workforce,
of great importance to the industries I represent, that will
feel the greatest effect of the 30-hour definition.
Again, NRF greatly appreciates the opportunity to appear
before you today. We strongly urge this Committee and the
Congress to consider specific changes to the ACA, including the
definition of full-time employment.
It is in our best interest to keep our employees healthy
and at work, but not at any cost. The ACA will, at a minimum,
pressure our ability to continue to provide coverage and help
drive positive change in the workforce.
We hope to work with you to help make the ACA more workable
so long as it remains the law of this land. Thank you.
[The prepared statement of Mr. Trautwein follows:]
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Chairman CAMP. Thank you, Mr. Trautwein.
I would now recognize the gentleman from Indiana, Mr.
Young, for the purposes of introducing our next witness.
Mr. YOUNG. Thank you, Mr. Chairman. It is my honor and
pleasure today to welcome to this Committee a fellow Hoosier.
Tom Snyder is President of Ivy Tech Community College, our
statewide community college system, which is the largest of its
kind in the country. President Snyder has been in his role
since 2007, leading Ivy Tech. They have more than 200,000
students in our State, 30 campuses, and 100 learning centers.
Tom, I thank you for coming here today to testify, and look
forward to hearing how this new definition of full-time is
affecting our adjunct professors and the students you serve. I
yield back.
Chairman CAMP. Thank you. Mr. Snyder, you are recognized
for 5 minutes.

STATEMENT OF THOMAS J. SNYDER, PRESIDENT,
IVY TECH COMMUNITY COLLEGE

Mr. SNYDER. Thank you, Mr. Chairman, for the opportunity to
speak with you on behalf of Ivy Tech and our 200,000 students
and nearly 8,000 faculty and staff. We also want to thank you,
Chairman Camp and Ranking Member Levin, for scheduling the
hearings on this important matter.
And, separately, we would like to thank Representative
Young, along with Representative Kind and Representative
Paulsen, for sponsoring the bill to repeal the medical device
tax, with the goal of protecting thousands of very high-paying
jobs, not only in Indiana but across America.
As you have stated, Mr. Chairman, we must be working
together to remove obstacles for individuals seeking full-time
work. Our focus at Ivy Tech, as it is for community colleges
all across the country, is to prepare students for future
careers.
The community college structure, unique to the United
States, is our country's most affordable and accessible option
to higher education. If we are to close the global attainment
gap, we must do all we can to keep it both affordable and
accessible.
Indiana, as was said, has one statewide community college,
the largest system in the country, with campuses across the
State. We are open admission, with a wide variation in college
preparedness. We have some students entering right after high
school. Others are doing a career change and entering at age 30
or 40 or 50 or even older.
Of Indiana's public colleges, among them, Ivy Tech has more
than one-half of all Pell Grant recipients, and Ivy Tech has
more than one-half of all African Americans in public colleges.
For many of these students, Ivy Tech is their best chance in
life to get an education needed for today's workforce. And I
would argue that the community college system is more critical
than most any other institution in rebuilding America's middle
class.
One of our keys to this success is our adjunct faculty team
of more than 4,500. Most are practitioners in their field,
working full-time in another job, bringing their real-life,
realtime experiences to the classroom. Moreover, these adjuncts
are very often the individuals that we would consider for full-
time positions. In fact, over the last 4 years, we have placed
more than 500 adjuncts into full-time faculty or staff
positions.
I also want to be very clear that we are firm supporters of
ensuring Americans have broader access to health care. However,
I want to highlight a couple serious issues related to the 30-
hour rule. We are very pleased that this bill authored by
Congressman Young will bring some clarity and a possible
solution to the 30-hour problem.
The Affordable Care Act has caused us to reevaluate
teaching hours for our adjunct faculty. We have done this with
very limited guidance. Like most community colleges, our
funding does not provide for any large unfunded mandate such as
the ACA 30-hour rule.
The annual impact on us would be $10- to $12 million, with
a total statewide healthcare bill today of $25 million, so a 50
percent increase. The penalty provisions we could face for
exceeding 30 hours, knowing we have thousands of adjuncts all
over the State, is not an option we could even consider.
Moreover, a very little-known effect is the IRS has said
preparation time must be considered. We are just not sure how
to factor in preparation time for 4,500 adjuncts or what other
aspects must be included in this determination. So, to be
cautious, we have limited the hours that adjunct faculty can
teach.
All of this results in having to find more adjunct faculty
to meet student demand, which really results in another
challenge, the lack of additional credentialed faculty, causing
classes to be canceled and students turned away.
The uncertainty of implementing the 30-hour rule has
impacted colleges across the country, but none more
dramatically than the community college system. The end result
may be less student access and the inability of faculty to stay
with one college. Some of our adjuncts have taken positions at
other institutions to fill the financial gap, inadvertently
reducing the exposure to full-time faculty opportunities in the
future.
If, as proposed, 40 hours would be the measurement for
full-time, it would allow institutions much more flexibility.
We would still need further guidance and clarity on how to
treat hours such as preparation time, a very difficult issue.
But we would be able to manage the process much easier than
today.
This is a critical discussion. This is about ensuring that
we are able to provide the best educational product at Ivy Tech
while protecting the jobs of our adjunct faculty. At Ivy Tech,
we strive to have the right resources in the right place to
educate hundreds of thousands of Hoosiers for the jobs of the
future. Thank you for the opportunity to speak with you.
[The prepared statement of Mr. Snyder follows:]
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Chairman CAMP. Thank you, Mr. Snyder.
Ms. Levy, you are recognized for 5 minutes.

STATEMENT OF HELEN LEVY, PH.D., RESEARCH ASSOCIATE PROFESSOR,
UNIVERSITY OF MICHIGAN INSTITUTE FOR SOCIAL RESEARCH, SCHOOL OF
PUBLIC HEALTH, AND GERALD R. FORD SCHOOL OF PUBLIC POLICY

Ms. LEVY. Chairman Camp, Ranking Member Levin, and Members
of the Committee, thank you for the opportunity to speak with
you today. My name is Helen Levy. I am an economist at the
University of Michigan with appointments at the university's
Institute for Social Research, School of Public Health, and
Gerald R. Ford School of Public Policy. I am addressing you
today not on behalf of the university but as a researcher with
expertise in health insurance and labor markets.
As we've heard, there is considerable concern that the 30
hours requirement in the Affordable Care Act could create an
incentive for employers to keep their workers' hours below 30.
Research suggests that this concern has been overstated and
that one proposed change, increasing the full-time threshold to
40 hours, would actually make the problem much worse. The best
evidence we have on the labor market impact of an insurance
mandate with an hours threshold comes from Hawaii where all
employers have been required since the mid-1970s to provide
coverage to employees who work 20 hours or more per week. A
recent study shows that if you compare Hawaiian workers to the
rest of the U.S., you see that the result of this mandate has
been an increase in employer-sponsored health insurance, no
significant effect on overall employment, and a small increase
in the probability of part-time work in Hawaii compared to the
rest of the U.S.
The effect on part-time work represents an increase of 1.4
percentage points in the fraction of employment that is part-
time. To put that number in perspective, currently about 19
percent of the U.S. workforce is part-time. This is a small
fact relative to the size of the labor market. But concern
about potential cutbacks in hours because of the ACA's 30-hour
rule have led some to propose shifting the cutoff to 40 hours
instead. This approach would actually make the potential
problem much worse. Here's why.
There are many more uninsured workers near the 40-hour
threshold than near the 30-hour threshold. Three recent
independent studies have all looked at this issue and reached
the same basic conclusion. If you think about the number of
workers who are potentially at risk of having their hours cut
and you look just about 30 hours, as Mr. Chen described in his
testimony, there are, according to his calculations, about 2\1/
2\ million of these vulnerable workers right around the 30-hour
threshold. Other studies have put the number a little bit
lower, around 850,000.
But the point is that, if you look at how many of these
vulnerable workers are near the 40-hour threshold, if you move
the threshold, there are about three times as many workers who
would be vulnerable at the higher level because there are just
so many more workers who work 40 hours than 30 hours. So the
bottom line effect of changing the full-time threshold to 40
hours would be to place many more uninsured workers potentially
at risk of having their hours cut. This change would also
increase Federal spending on Medicaid and on premium tax
credits.
Thinking beyond the 30-hour rule, we might also ask how the
coverage provisions of the ACA as a whole are likely to affect
the labor market. The best research on this question comes from
Massachusetts, where comprehensive reform similar to the
Affordable Care Act was implemented in 2007. The evidence from
Massachusetts is clear. There has been no decline in employment
or hours relative to neighboring States, even in industries
that are generally low-wage, such as accommodation, food
services, and retail.
It is also important not to overlook the fact that
healthcare reform is likely to have important benefits for
labor markets, largely by alleviating the problem of job lack.
If you can get affordable insurance without working full-time
for a large firm, this makes it easier for entrepreneurs to
start their own businesses, as Mr. Levin mentioned. It also
makes it easier for parents of young children or workers
nearing retirement to choose part-time work without worrying
about not being able to get health insurance.
The Congressional Budget Office has projected that the
Affordable Care Act would reduce employment in 2021 by about
one-half of 1 percent. If this were an estimate of the increase
in the number of individuals unemployed as a result of the ACA,
that would be alarming indeed, but this is not the correct
interpretation of CBO's projection. CBO is very clear that most
of this effect is due to changes in labor supply, things like
the older workers cutting back on the hours, and not labor
demand, which is things like firms limiting their workers'
hours. From an economic perspective or from the perspective of
common sense, it is inaccurate to characterize these voluntary
reductions in labor supply as job-killing.
In conclusion, the best research we have suggests that the
ACA is likely to have very little effect on labor demand
relative to the size of the labor market, and it is likely to
have significant positive effects, as well. I thank you for
your attention, and I look forward to answering any questions
you may have.
[The prepared statement of Ms. Levy follows:]
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------

Chairman CAMP. Thank you, Ms. Levy, and thank you all for
your testimony this morning.
Mr. Chen, I'd like to try to quantify the impact this rule
can have on an individual worker. For example, if a restaurant
worker normally works 36 hours and the ACA reduces him to 29,
they've lost 7 hours per week. And, according to the Bureau of
Labor Statistics, this worker has an average wage of $13.66 per
hour. So, my calculations are that, because of ObamaCare, this
worker just took the equivalent of a 20 percent pay cut. My
question is how does the 30-hour rule impact a part-time
firefighter? There are reports that many local communities are
cutting back or planning to cut back the hours of part-time
firefighters as a result of the ACA.
Mr. CHEN. Mr. Chairman, the 30-hour rule has a significant
impact on someone like a part-time firefighter. A firefighter
earns an average of about $22 an hour. If the part-time
firefighter works 39 hours a week, he or she will earn $848. If
the firefighter's hours are cut back to 29, he or she would
lose about $217, which is roughly a 30 percent pay cut. If the
hours are cut from 35 to 29, the firefighter's looking at
roughly a 17 percent pay cut. So, obviously, the incentive to
reduce those hours would be particularly damaging for the part-
time firefighter.
Chairman CAMP. I think it's really an example of how
complicated the 30-hour rule really is and how misguided it is
in application. The Administration has said that they're going
to fix this for volunteer firefighters, which is certainly
welcome. But we still have not seen any actual regulations or
any details on how they plan to do that. But many local
communities employ part-time firefighters, and in many cases
they're second jobs. So they're not doing it for the health
care. They are individuals who are taking on this very
dangerous work. And many communities use part-time firefighters
for different reasons. Sometimes they're needed for 15 hours;
sometimes they're needed for 35 hours, and it often can't be
predicted.
So the rule--this rule is forcing local communities who
can't afford to offer health insurance to them to pose a very
rigid schedule, which may not be in line with the needs of the
community. And I just want to mention what the fire chief for
the Grand Traverse Metro Emergency Services Authority said in
northern Michigan just last month, and I'm quoting. ``We're
going to have to find the money somewhere or do more with less
on the fire scene. And I don't think any of us have that
luxury. The last thing I want to say to an employee is, `You've
met your hours for the week. You can't come on an emergency.'
Not only would that hurt them, but it would hurt us as we need
those people to respond on calls.''
So, Mr. Chen, in your testimony you referenced new research
by the Hoover Institute. The research shows this rule impacts
2.6 million Americans, 89 percent of whom don't have a college
degree, and have a median income of under $30,000. Could you
explain in more detail who this population is and why the 30-
hour rule hits lower income Americans so much harder than the
rest of the population?
Mr. CHEN. The research that we've conducted is an update of
the study from the University of California Berkeley, and we
take the same definition of a vulnerable population that they
do. One can quibble with that definition, but we've decided
simply to update it. The definition of a vulnerable worker--
someone between the ages of 19 to 64, currently working between
30 and 36 hours, family income below 400 percent of Federal
poverty, which would make them eligible for the subsidies, the
cost-sharing subsidies in the Affordable Care Act, and who do
not currently receive health insurance from their employers.
When you take all of that data and you crunch the numbers,
what you end up with, as you said, Mr. Chairman, is
approximately 2.6 million workers who are in danger of having
their hours cut. That's approximately 3 percent of the U.S.
workforce.
With respect to why it's particularly dangerous for these
individuals, Mr. Chairman, it's because of the fact that they
are at an income level which is highly vulnerable. There is
some discussion about moving to the 40-hour threshold and the
impact that would have. The reality is you're looking at
different categories of workers. At the 30-hour threshold the
worker is far more vulnerable from an income perspective than
at the 40-hour threshold. Therefore, the vulnerable population
clearly is one that the ACA's 30-hour rule has the potential to
hit quite hard.
Chairman CAMP. All right. Thank you. I now recognize
Ranking Member Levin for his questions.
Mr. LEVIN. Thank you and welcome. Let me just read
something from an analysis of the Center on Budget and Policy
Priorities. And I ask that this be placed in the record.
And it covers the testimony of yours, Dr. Levy. ``Moreover,
raising the law's threshold for full-time work from 30 hours a
week to 40 hours would make a shift towards part-time
employment much more likely, not less so. That's because only a
small share of workers today, less than 8 percent, work 30 to
34 hours a week and thus are most at risk of having their hours
cut below health reform's threshold.
In comparison, 43 percent of employees work 40 hours a
week, and another several percent work 41 to 44 hours a week.
Thus, raising the threshold to 40 hours would place more than
five times as many workers at risk of having their hours
reduced.'' Do any of you challenge that? You do?
Mr. Anastos.
Mr. ANASTOS. An employer who is not offering insurance and
goes from 40 hours to 39, is barely making a move at all.
Whereas, if you go from 40--it's to save all that money, you
certainly would be looking at lowering the amount of people you
have at that level that you had to insure. That's for those
people that don't already insure them. But I certainly--in all
due respect, it just seems like it flies in the face of almost
rationality that if it was 30 hours a week, people would not be
managing to that level to save so much money. It's a large
portion. The health care is such a large portion of how much we
have to pay, to be doubling and tripling our cost, our
healthcare cost, and to then say, ``If you go over 30 hours''--
I mean, we want to reward those people over 30 hours, but
you're going to artificially keep them down at that level.
Mr. LEVIN. Yeah, but that doesn't challenge the State in
terms of the number of people you put at risk. Can I represent
community colleges, one of the largest in the Nation? People
who work 35 hours--how do they get insurance? Don't you want
them insured?
Mr. SNYDER. Representative Levin, I think the issue for the
community colleges is a unique structure of building a
partnership in the community and requiring both, because of
cost and because of vision, to have half the faculty be on an
adjunct part-time basis----
Mr. LEVIN. Okay. But----
Mr. SNYDER [continuing]. Most of whom have insurance and
full-time jobs at another----
Mr. LEVIN. Then all you have to do is offer and they
refuse. It's not going to increase your cost in most cases. I
mean those who----
Mr. SNYDER. We've done an----
Mr. LEVIN. For those who work 35, 36, 37 hours and don't
have insurance, don't you want them covered?
Mr. SNYDER. So the issue at the community college is that,
as we've done right now, we've reduced the credit load, which
is actually the classroom load, to 9 hours or three classes.
And the reason that we've done that is that we are very likely
to have a preparation time mandate that we either have to
justify internally by having data on all 4,500 adjuncts or rely
on an outside party how many hours of work outside the
classroom----
Mr. LEVIN. But that's an issue that has to be worked out.
But you say in your testimony you want people covered.
Mr. SNYDER. We want people covered.
Mr. LEVIN. Okay. Now, if they work 35 hours, 36 hours, and
they don't have insurance, do you want them covered?
Mr. SNYDER. I think, in general, everybody in the country
wants people that are working virtually full-time----
Mr. LEVIN. Okay. So if their spouse works and they have
insurance, they'll turn it down. It won't cost you anything.
You say you want them to have insurance. They work 35, 36, 37
hours. You're not going to--you don't want to have to cover
them, so who's going to cover them?
Mr. SNYDER. Our concept really regarding our adjuncts is
that they are part-time, and our expectation is we did not plan
to give them insurance because we did not plan to work them 35
hours. The issue is that the bulk of the time that is counted
is time outside of our control; it's preparation time.
Mr. LEVIN. Yeah, but that's an issue that has to be worked
out.
Mr. SNYDER. But that is the biggest issue for the community
college.
Mr. LEVIN. Okay. So then it should be worked out. But for
you to say this is the problem with ACA and with healthcare
reform and all the rhetoric--people say they want everybody
covered. You're a community college. People are working 35, 36
hours. The assumption is they don't have health coverage
through a spouse. And you're essentially saying you want
everybody covered, but you don't want to cover them.
Mr. SNYDER. We cover people working 35 hours or more with
health insurance if they are working outside of the adjunct
roles. We cover them today.
Chairman CAMP. All right. Thank you. Mr. Johnson is
recognized.
Mr. JOHNSON. Thank you, Mr. Chairman. Let me tell you about
one of my constituents from McKinney, Texas, who is doing her
best to make a way for herself. Jillian, a college student in
her early 20s--and I'm sure you're familiar with those people--
has worked part-time at a local grocery store to help pay for
her school expenses. For several years Jillian clocked between
30 to 40 hours a week, and suddenly she was cut between 15 and
18 hours a week. Jillian was shocked and decided to approach
her manager. His answer was loud and clear. ``The cuts are due
to ObamaCare.'' The so-called 30-hour rule imposed by ObamaCare
forced this employer, like many others across the country, to
cut worker hours, therefore harming the workers it promised to
help.
Let's put this into perspective, and I'll be conservative
with my calculation. Let's say Jillian worked 30 hours a week
and, because of ObamaCare, was cut to 18 hours a workweek.
That's a loss of 12 working hours. Having worked at the grocery
store for a long time, Jillian was up to $9 an hour. This meant
she was losing $108 a week. Worse, that adds up to more than
$430 each month. That's $430 less for her pocket that she uses
to pay for textbooks, gas, groceries, and living expenses.
Mr. Chen, many people like Jillian find part-time work to
help make ends meet. How does the 30-hour rule impact waiters
and waitresses?
Mr. CHEN. Congressman, it has a severe impact on
individuals who are employed as waiters or waitresses. If you
consider that the average wait staff earns about $9 an hour,
working 39 hours a week, they would earn approximately $350 a
week. If they're cut back to 29 hours, they lose $90 a week,
which is roughly a quarter, a 26 percent pay cut. If the waiter
works 35 hours a week, they earn $300. If you cut them to 29
hours a week, they lose $54 a week, which is a 17 percent pay
cut.
Congressman, the basic point here is that if you make
something more expensive, you're going to have less of it. And
so that is the dynamic that we see at play here.
Mr. JOHNSON. Thank you. And, Mr. Anastos, in your testimony
you state that, because of the 30-hour rule, ``Unfortunately
for my part-time workers, they will no longer be able to pick
up additional shifts when their schedules change, or work more
hours during busier times to bring home more pay.'' Can you go
into more detail about how this rule impacts the part-time
waitresses and waiters that you have managed over the years?
Mr. ANASTOS. Well, Congressman, I got out of the restaurant
business and stuck to the hotels. I found it a lot more
profitable. In fact, I'm glad you asked me that question
because we were one of the first companies in Maine--
hospitality companies--20 years ago--to institute health
insurance. We've had it as low as 24 hours. Of course, we want
to insure people from 30 to 40 hours. But we are two and a half
times--our costs are going to go up right now. I mean, how much
more can we do? So when I have people at 30 hours and I want to
reward them with more, sure, but I have to have the viability
of our business first. We're a small business. I'm not like
Apple Computer or some other large company. I have, basically,
80-room hotels, so you have a relatively small profit margin.
When you're talking about doubling and tripling your health
insurance costs, you just--there has to be a point where you
just can't do it. So, of course, you're going to manage down to
30 hours. I'd like to raise them up, but if you're talking
about a $10, $12 an hour employee and then it's going to cost
$4 or $5,000 just to raise them up a few hours, it makes it
extremely difficult to do.
Mr. JOHNSON. Thank you.
Mr. ANASTOS. And one last thing. Small businesses in this
country--I just think sometimes we miss the point about how we
grow our businesses together from scratch. I mean, I had one
hotel 10 years ago. All these people we know. We know them
well. I feel like we're driving a wedge between us. And I
just--it's going to make it so hard when they want more hours
to say no to them. Thank you.
Mr. JOHNSON. Thank you.
Dr. Chen, doesn't that cause a reduction in Social Security
benefits, and won't that have an effect in increasing poverty
among seniors down the line?
Mr. CHEN. That certainly potentially could be one side
effect, Congressman, given the lower wages and therefore the
lower payment of taxes into the system, yes, sir.
Mr. JOHNSON. It affects disability also, does it not?
Mr. CHEN. Thank you.
Thank you, Mr. Chairman.
Chairman CAMP. All right. Mr. Rangel.
Mr. RANGEL. Thank you, Mr. Chairman, and let me thank this
panel. It is seldom that we get a panel that really believes in
health insurance for as many people as possible. And I gather
from all of your statements that, if the resources were there,
you would think that it would be in the best interest of the
company to give access to health care to all the workers,
right? No one disagrees with that. And I assume there has to be
some evidence that a workforce that does have health care is
more productive and has less sick time, less disabilities. I
assume that the research would point that out.
Now, you have worked, Dr. Chen, with Governor Romney where
he had some concepts about health insurance. Are there any
similarities between the ACA and the program that Governor
Romney supported in Massachusetts?
Mr. CHEN. Congressman Rangel, I believe that Governor
Romney and President Obama share an interest in insuring that
as many Americans receive access to quality health insurance
coverage as possible. I have no doubt that----
Mr. RANGEL. Well, that's a general feeling of Americans.
But the Chair has restricted me to 5 minutes, and I would
rather talk about the plan rather than the man in terms of----
Mr. CHEN. Yes, sir.
Mr. RANGEL [continuing]. The overwhelming belief that it
would be good if we could afford it. So what are the
similarities between the man as it relates to the plan?
Mr. CHEN. Certainly, there are elements structurally that
are similar.
Mr. RANGEL. I know. That's what I'm asking you. What are
they?
Mr. CHEN. The creation of health insurance exchanges, the
notion of individual responsibility, those are certainly
similar between the plans----
Mr. RANGEL. And the mandates?
Mr. CHEN. Pardon me?
Mr. RANGEL. And the mandates?
Mr. CHEN. The individual mandate as well as the fair share
responsibility are----
Mr. RANGEL. Well, let me ask you this, then. With those
similarities, is there anything that you could suggest that we
could do to perfect the ACA in order to get the same type of
support, I assume, that you give to Governor Romney's health
plan?
Mr. CHEN. I would say, Congressman, that the problem with
the Affordable Care Act is that it takes a Federal approach to
what I believe should be State-based reform.
Mr. RANGEL. So what would you suggest, that we repeal the
ACA?
Mr. CHEN. Yes, sir, I would.
Mr. RANGEL. I don't know how much political science you've
taken in your background and training, but assuming that the
overwhelming majority of the people wanted to repeal it, what
would be the first step that you would suggest that the
Congress would do, put in a bill to repeal it?
Mr. CHEN. I would suggest the first step would be to have a
replacement for it, Congressman, that repeal alone would be
insufficient.
Mr. RANGEL. Now, what would happen to the people that have
signed up already? Now we're in a repeal mode, and we have to
sell it. Do we cancel out all of the contracts that are out
there under the ACA now and tell them that in the future we
will have another plan? Does that make any sense to you as a
citizen rather than as an expert?
Mr. CHEN. I make two points, Congressman. First of all,
unfortunately, many Americans have already had their plans
canceled. Second of all----
Mr. RANGEL. But I'm talking about the millions of people
that just signed up.
Mr. CHEN. I think it's important that there be some
mechanism to ensure that people who have insurance are able to
retain that insurance.
Mr. RANGEL. Now that's where we want to get some area of
agreement. Could you give any idea, rather than repeal of what
we have, because I think almost all of the Republicans and most
of the witnesses--not this panel, of course--believe in repeal?
But unlike you, they haven't the slightest clue as to where do
we go with the people who have no insurance. Now you're saying
that those that have signed up for this--that you do have some
idea based on your experience with Governor Romney that they
should be protected, and I agree with you. What will you
suggest we do right now, besides repeal, because, politically
speaking, impeachment is more probable than repeal. And that's
on the minds of a lot of people, too, so forget that. What can
we do to protect those people who signed up under ACA?
Mr. CHEN. Congressman, I would suggest one of the things we
can do is fix the 30-hour rule, which we're here talking about
today.
Mr. RANGEL. What?
Mr. CHEN. One of the things we can do is fix the 30-hour
rule, which is contained----
Mr. RANGEL. No. No.
Mr. CHEN [continuing]. In the employer mandate which we're
talking----
Mr. RANGEL. We're talking about people that work 40, 50
hours. They're insured now. Don't go into this other group.
Those are problems that we can't overcome that we're talking
about. I'm talking about protecting the millions of people that
had no insurance. They have now signed up, 30, 40, 50 hours.
And I, as a legislator, have to protect them as I try to
perfect the delivery system. You have no ideas as to what
happens to them?
Mr. CHEN. I would suggest one of the problems we have now
is that many Americans are unable to afford insurance on the
health insurance exchanges because of the structure of the ACA
and what's required of plans on the exchanges. Therefore, one
of the things I would do to answer your question, Congressman,
is I would revisit the essential health benefits requirement in
the ACA.
Chairman CAMP. All right. Thank you. Mr. Brady is
recognized.
Mr. BRADY. Thank you, Mr. Chairman. If you don't think this
30-hour mandate isn't hurting workers and cutting hours, you're
in deeper denial than Justin Bieber.
Chairman CAMP. Will the gentleman yield? Will the gentleman
yield?
Mr. BRADY. You know, I never yield----
Chairman CAMP. He has a Canadian employer that's single
payer.
Mr. BRADY. You know the head of United Food and Commercial
Workers says it is happening, so the facts are already starting
to show up. You're seeing workers have their hours reduced and
their incomes reduced. And Jimmy Hoffa, not exactly a
conservative, has said that this rule will destroy the
foundation of the 40-hour workweek that's the backbone of the
American middle class. They know it's happening. They're seeing
it. I was with a Houston restaurant owner who got off a
conference call with all his store managers and basically told
them, ``We will never hire a full-time worker again. Never. We
just can't afford it.'' And this is a successful restaurant
owner who likes opening up new restaurants and hiring new
workers.
We're told today that if we go back to the traditional 40-
hour workweek, which has been the case for many, many decades,
that it will actually make the problem worse. But we know that
nearly 9 out of 10 workers who have a full-time job are
eligible for health care. We know if they're part-time it's
about a 15 percent chance. So this rule is forcing workers into
part-time work with less of a chance of health care.
So, Dr. Chen, what happens if we return to the 40-hour
workweek? And I'm going to ask some of our business people as
well. So what happens if we return to a 40-hour workweek?
What--how does it impact that local worker?
Mr. CHEN. Well, I think, administratively, it's much easier
for employers. I mean, bear in mind that the 40-hour workweek
was originally enshrined in the Fair Labor Standards Act. Even
though it does not define full-time employment as 40 hours per
week, it does dictate that non-exempt workers are paid overtime
once they go over 40 hours. Therefore, the standard definition
has become 40 hours a week. I would suggest that if we go back
to that system of a workweek, full-time workweek being 40
hours, employers would not have as many of the administrative
challenges and hindrances to growth that the 30-hour workweek
provides.
Mr. BRADY. Okay. Thank you. Mr. Anastos, what happens if we
do away with the 30-hour rule and you're able to bring your
folks back up in their hours?
Mr. ANASTOS. Quite simply, it greatly simplifies our life.
I mean, when I talk about doubling or tripling of cost, I'm not
even talking about the administrative cost. I talked to our CEO
before I came down here, and what--and asked him what he
thought. And he said, ``Anything.'' He said, ``Any relief at
all to get close to 40 hours''----
Mr. BRADY. Will workers' hours likely increase at your
place?
Mr. ANASTOS. Absolutely. In other words, instead of having
to manage all the time and keep this ledger where you're always
trying to figure out are they over 30 hours and, therefore, as
an average, going to cost you many thousands of dollars more--
the survivability of the business--I have to manage to that
first. And it puts us in a situation where I'm managing against
my employees' interests, and it's against my interests.
Mr. BRADY. Mr. Trautwein, retail--does this help increase
workers' hours if we do away with the 30-hour rule?
Mr. TRAUTWEIN. Without a doubt. It makes the compliance
cost easier, and makes it easier to manage the blend between
full- and part-time employees. Many part-time employees don't
want to work full-time, and that's something that, under the
30-hour rule, they have continued to work, that part-time, but
with fewer hours, less money in their pockets. So, certainly,
from a retail and chain restaurant standpoint, this would
improve things measurably.
Mr. BRADY. Mr. Snyder, do you think adjunct professors at
community colleges want to see this 30-hour rule changed?
Mr. SNYDER. Absolutely, because the bulk of them are making
decisions that are counter to their own best interests and
certainly counter to ours. And I think the point that you
made--and that is the 40-hour rule, if we move to that, would
memorialize 40 hours as a benchmark that you should, in good
conscience as an employer, be offering health care to everyone
and trying to get more people into that 40 hours because I
think the 30-hour rule actually puts 40-hour plans at risk
because somebody has to pay for that cost.
Mr. BRADY. Yes. Good point. Thank you, Mr. Chairman.
Chairman CAMP. Thank you.
Mr. McDermott.
Mr. MCDERMOTT. Thank you, Mr. Chairman. Last week I read a
headline, ``Did ObamaCare Break Up the Captain and Tennille
Marriage?'' Now, a reasonable reader could write that off as
sensational journalism, but the way the right wing media has
played it, the Affordable Care Act appears to be a very devious
thing. I'm sure we'll hear shortly how ObamaCare has brought
problems in the Middle East and created problems in the waters
of West Virginia and probably even climate change. ``If we can
get rid of this 30-hour rule, why, everything will be all
better.''
We're talking about a preposterous accusation that the ACA
has forced--and I emphasize forced, f-o-r-c-e-d--businesses to
cut hours. Now, I have no doubt that think tanks can come up
with statistics to make their claim and that our panel is doing
without any real evidence. They have anecdotal stuff. I know
more about the community colleges in the State of Washington
than, I think, probably anybody, having been the Chairman of
the Ways and Means Committee. They have used part-time
employees and jerked their employees around for years to reduce
their full-time equivalents. So it's not something new that's
coming because of ObamaCare. There are no penalties until 2016.
Who exactly is forcing you to do this now?
For those of you wondering what this phony hearing is
really all about, you ought to look no further than tonight's
State of the Union. This is put in the morning before the State
of the Union to create a make-believe problem that the
President has to deal with, right?
Here's what this hearing really ought to be about. What is
corporate responsibility? Now, Citizens United decided that
corporations were individuals. So I guess they're individually
responsible, right? But people like to talk about individual
responsibility. Individuals ought to have their own health
care, and there's three ways you get it. You either get it
from--you buy it yourself, or you get it through your
employment, or the government provides it for you. And we took
this Republican idea of letting industry and the insurance
industry and the corporations put this together. And now every
time we turn around, there's another problem that's destroying
the American economy because of the Affordable Care Act. They
basically are saying they have no responsibility for their
employees.
Now you have to ask yourself, with record profits--if you
look at what's going on in the stock market right now, you have
to say, ``Don't they have a responsibility to insure their
employees?'' I mean, is there no responsibility in this
country? We were talking in this Committee, ``We're going to
lower taxes. The corporate tax rate is killing America. We have
to lower that corporate tax rate.'' And we're not going to
require them to provide or offer insurance to their employees?
What the Congress decided with the Affordable Care Act was
that people had a responsibility to offer to their employees
health insurance. Now, we can argue about the level until the
cows come home. Really, the question is do you want a workforce
that's healthy or not, or do you just want them to work--see,
we could go back to 1910 when there was no unemployment
insurance and there was no industrial insurance and we treated
workers like, ``Well, you get sick, your problem. Get out of
here. We'll hire another one off the street to replace you.''
And if that's the world we want to go back to, then you're
going in the wrong direction for me because this bill is trying
to figure out how do we use this system we've created.
Now, Mr. Rangel has asked Mr. Chen, ``Give me an example of
something we can do to fix it,'' and we get nothing except
repeal the bill. Well, we tried that 49 times, and it isn't
going to happen. This is, in my view, a question that this
Committee has to deal with. Whose responsibility is it for the
health of American people? And I like--somebody said that this
is the first hearing on single-payer. It probably is because if
you keep working to kill what you've created under RomneyCare,
which Mr. Obama took and put in place for the whole country,
you're going to get single-payer care because Americans are not
going to walk away from people who don't have health care.
Chairman CAMP. All right. Time has expired.
Mr. MCDERMOTT. You and I pay a thousand bucks a month.
Chairman CAMP. Mr. Tiberi is recognized.
Mr. TIBERI. Thank you, Mr. Chairman.
Mr. Chen, in central Ohio this make-believe problem has
caused the Ohio State University to lower the cap on student
work hours to below 30 hours. They're not the only 4-year
college to have announced that. Students have been impacted.
Columbus State Community College has reduced hours for adjunct
professors, adjunct faculty, and hourly workers to less than 30
hours a week as a result of the Affordable Care Act. The Upper
Arlington City School District has already cut hours for aides
who work with disabled students from 32\1/2\ hours per week to
28 hours per week citing the Affordable Care Act.
In my sister's city where she lives with her two sons and
her husband, Lebanon, Ohio, the hours of 18 part-time
paramedics and firefighters were reduced. Public Safety
Director Michael Blackwell said, ``We were scheduling most of
our part-time workers to about 39 hours a week. With ObamaCare
and the regulations that follow, we've cut all those part-time
employees down to less than 29 hours per week.'' And many towns
who employ part-time paramedics and EMTs have done the same
thing throughout the State where I live. How does a 30-hour
rule that some call preposterous--others say is make-believe--
impact the typical paramedic who now is working less than 30
hours a week?
Mr. CHEN. Congressman Tiberi, the typical paramedic
probably makes about $11 an hour. And if the work is cut from
39 hours a week to 29 hours a week, that paramedic loses about
25 percent of his or her pay. In similar fashion, if it's cut
from 39--excuse me--from 35 down to 29, they lose about 17
percent of their pay. So, obviously, there is a negative impact
with respect to those folks.
Mr. TIBERI. I ran into a lady at the grocery store who was
working part-time for a retail employer and she was provided
health care. She lost her health care this month, and her hours
were reduced to less than 30 hours a week, and she was fine
working part-time. Her husband's an independent contractor--he
did not get health care through his work. So she took a pay
cut. She lost her ability to purchase insurance. She took a
second part-time job so her and her husband could afford to go
onto the exchange and make up for the fact that she lost
insurance and lost hours. Is that something typical that you've
heard among the 3 million people who now are getting health
care in the exchange who were forced off because they either no
longer qualify because of the 30-hour workweek or as a spouse
they've lost their coverage through their working spouse?
Mr. CHEN. Yes, sir, those stories are quite common. And, in
fact, I think the incentives are aligned in such a way that you
may be hearing more of those kinds of stories.
Mr. TIBERI. I received an email from a constituent in New
Albany. Her 25-year-old son-in-law was offered a full-time
position with a retail company in Ohio. He accepted the job and
was eligible to receive healthcare benefits after 6 months on
the job. And, according to her, it was a ``godsend'' for him
and her daughter who had an 11-month-old baby at the time and
was pregnant with another on the way. After 4 months on the
job, because of the ACA requirement, his employer cut his hours
to less than 30 hours per week, which made him no longer
eligible for healthcare benefits. They were forced to give up
their apartment, move in with family, and now can't locate
full-time work with another employer due to this fear of the
regulation. Is that something you've heard as well?
Mr. CHEN. Yes, sir, it is.
Mr. TIBERI. Mr. Anastos, it is pretty clear that the 30-
hour rule is forcing employers to cut back on hours. You were
beginning to talk about the food service industry. White
Castle's headquartered in Columbus. They have already made this
announcement in July that they were going to hire all new
people at less than 30 hours because of the mandate. Have you
heard this happening across the fast food sector and retail
sector? Can you turn on your microphone?
Mr. ANASTOS. In fact, that grocery story was the same story
I heard last week where a woman was--I mean, where she said the
same thing about her hours being cut. But, you know, I'd just
like to say that we're not all record profits and Wall Street
companies. I mean, I started painting houses and working in a
Wonder Bread factory as a union worker. And what I'm getting at
is we don't have--so we're going to double and triple our
health costs. I mean, small business is like the golden goose
of job creation. How much more can they put on us? But as far
as managing to 30 hours, yes. Those three new hotels which we
will be building--and we are building them because we are
building them essentially with other people's money--we will
manage those to 30 hours because we have to find out how viable
that business is.
Mr. TIBERI. Thank you. I yield back.
Chairman CAMP. Mr. Neal is recognized.
Mr. NEAL. Thank you, Mr. Chairman. Mr. Snyder, I am a big
supporter of community colleges. I think for the purposes of
clarification, just to raise a couple of questions with you, in
the last 10 years have you hired more adjunct faculty, or have
you hired more tenure track professors?
Mr. SNYDER. Well, we have tried to actually increase our
percentage of full-time professors, but the growth of the
community college is not permitted. So I would say that we
probably added about--the ratio is about the same. We have gone
from about 4,000 to 4,500 and from about 1,200 to 1,500. It's
both a cost and availability issue.
Mr. NEAL. Fair enough. But has the trend line over this
decade been to hire more part-timers than more full-timers?
Mr. SNYDER. No. I think our goal was to reduce our costs
and actually hire more full-time on a percentage basis.
Mr. NEAL. And would it be conceivable that within the
system--well, let me ask you this. What would a full-time
faculty member carry for classroom hours?
Mr. SNYDER. In the community college they teach. So they
would teach five courses per semester, and then they would sign
an additional contract for the summer if they were going to
teach in the summer.
Mr. NEAL. Okay, so 15 hours?
Mr. SNYDER. Full load. Right.
Mr. NEAL. Is it conceivable that, within the system, you
would have two professors, both teaching 15 hours, where one
might be considered full-time and the other might be considered
adjunct?
Mr. SNYDER. It might be.
Mr. NEAL. Okay. That is kind of the point of this. And I
understand the argument is flat around. But part of the problem
here has clearly been that there has been a long-term trend
toward hiring--across the country, hiring more adjuncts. Now,
some universities for cost purposes--I understand that. But I
think it's kind of difficult sometimes to just discern the
point that you raised earlier, that you might not hire based
upon the following. Is that fairly accurate?
Mr. SNYDER. Well, I think that you would want to look at
the bigger picture. And that is the full-time professor signs
an annual contract, which requires office hours, requires
advising, which requires course development.
Mr. NEAL. A tenured faculty member would sign a year-to-
year contract?
Mr. SNYDER. Well, ours are not tenured, but they have
always signed a year-to-year contract, yes.
Mr. NEAL. Okay. But generally in academic life----
Mr. SNYDER. It would be the same in a tenured agreement.
These would be the job requirements.
Mr. NEAL. Most tenured professors would sign a year-to-year
contract?
Mr. SNYDER. Well, our professors all do.
Mr. NEAL. But I would suggest that that's probably not the
case at most universities and colleges.
Mr. SNYDER. Well, it's been that way for the school for
decades, so----
Mr. NEAL. Okay.
Mr. SNYDER. But the point being that the adjunct--just to
be clear, the adjunct is only obligated to show up for
orientation, to do the outside-the-course work----
Mr. NEAL. Right.
Mr. SNYDER [continuing]. And to be in class what would
typically be 9 to 12 hours per week. And so what the
regulations would require is that we somehow assess on a fair
basis the prep time in a way that determines did they or did
they not exceed 30 hours, which is an unconscionable task at
the moment.
Mr. NEAL. But in the State of New York today--it's very
clear in the State of New York that more and more full-time
faculty members are augmented by those who carry the same
number of hours in the State of New York who are adjuncts. And
I think the trend line is pretty clear over the last 10 years,
that most universities have moved in the direction of more and
more part-time lecturers who they have not had to pay full-time
benefits.
Mr. SNYDER. Right. I would say this. Having read the
articles--and I don't have all the details. I read the
articles.
Mr. NEAL. Yeah.
Mr. SNYDER. There is also the implication that there is an
increase in professors who are non-tenured, not exactly
adjuncts, which would be a different pay level.
Mr. NEAL. Okay. Well, fair enough. Fair enough.
Mr. SNYDER. Right.
Mr. NEAL. But I just wanted to see if we could clear some
of that up.
Dr. Levy, productivity. The whole notion of productivity
and what's happened over the last few years even as the economy
has been mired in this slump, productivity has actually gone
up, hasn't it?
Ms. LEVY. It has, yes.
Mr. NEAL. Substantially?
Ms. LEVY. Yes, I would say so.
Mr. NEAL. So could you link that notion of productivity
gains perhaps to healthcare benefits and the security of one
having health care?
Ms. LEVY. Well, there's very good evidence that having
health insurance improves financial security and health
outcomes for the people who have it. So it's certainly the case
that some of the economic benefits that the coverage expansions
of the Affordable Care Act would include improvements in health
and productivity, yes.
Mr. NEAL. Mr. Chairman, I think one of the arguments that
would be worth having here at some point--or discussions, I
should say--would be having some folks come in to talk about
the whole notion of productivity gains across the American
economy during the last few years. They've been really
substantial. The problem is, as we discuss this whole notion of
income disparity, one of the interesting parts of it is, while
productivity has really been gained, real wages and salary
haven't.
And, Dr. Levy, would you comment on that?
Ms. LEVY. Yes, that's right. I mean, to the extent that
we're concerned about inequality, as Dr. Chen highlighted in
his testimony, of course we do always need to be worried about
the well-being of low-income families, of, in particular, the
workers who are less likely to have health insurance. And I
think that's exactly why the idea of changing the hours
threshold is so problematic because you put many more of those
workers at risk of having their hours reduced by changing the
threshold for full-time.
Chairman CAMP. All right. Thank you.
Ms. LEVY. I'll stop.
Chairman CAMP. Thank you.
I'm going to go two to one now. So Mr. Reichert is
recognized.
Mr. REICHERT. Thank you, Mr. Chairman.
Dr. Chen, how does the 30-hour rule impact school bus
drivers?
Mr. CHEN. Congressman, I think the reality is that many of
these individuals are going to face the same kinds of
difficulties as other workers we've talked about. You might
see, for example, that if they were to have their hours cut
from 39 hours down to 29 hours a week, that they would be
looking at a pay cut of roughly 25 percent or more. If they're
cut from 39 hours to 35 hours, you're looking at a pay cut of
about 20 percent, so obviously the impact is significant. And
school districts--the data is pretty clear with respect to
school districts, that they are feeling the pinch of the 30-
hour rule. In fact, over a hundred school districts have
reported making changes to hours for people like school bus
drivers, temporary and other workers, or just outsourcing that
work entirely.
Mr. REICHERT. Thank you. Mr. Chairman and Dr. Chen, of
course, we know this is not a make-believe problem. It's not a
theoretical concern. It's not a political or ideological
disagreement. This is really happening to workers out there
across the country. It's happening now. School bus drivers are
having their hours cut because of ObamaCare's 30-hour rule.
Mr. Chairman, I'd like to submit this article for the
record from the Huffington Post that reports how school
districts have cut back hours because of this rule.
Chairman CAMP. Without objection, so ordered.
Mr. REICHERT. I'd also like to enter into the record, Mr.
Chairman, a letter to you, Mr. Chairman, and the Ranking Member
from the Employers for Flexibility in Health Care Coalition.
Chairman CAMP. Without objection, so ordered.
Mr. REICHERT. Thank you.
Dr. Chen, I would like to follow up on a line of
questioning that Mr. Johnson began as to what happens when
people lose hours and earnings as a result of the 30-hour rule.
We know that businesses are reducing employer's hours or
reducing the size of their workforce in response to the 30-hour
rule. So what happens to individuals' unemployment benefits if
they're laid off? Don't checks for the unemployed go down if
people work less while they're employed?
Mr. CHEN. Yes, sir, that would be an impact.
Mr. REICHERT. How about the 401(k) contributions based on
earnings? Won't those go down as well?
Mr. CHEN. Yes, sir, that would also be affected.
Mr. REICHERT. So wouldn't that cause retirement income to
decline and poverty to increase down the line?
Mr. CHEN. There is no question that retirement security
would be one of the side effects--or less retirement security
would be a side effect, yes, sir.
Mr. REICHERT. Are there any other examples of unintended
consequences for the safety net from this misguided 30-hour
rule that you can think of?
Mr. CHEN. You know, the biggest one simply is the loss of
wages. The other thing I would say is that the more global
concern about cost increases created by the ACA also makes it
less likely that employers would offer health insurance to
part-time workers. We have seen recent examples of this,
Target, Home Depot, and other companies. Major companies have
made the decision to migrate away from an offer of health
insurance to part-time employees as well.
Mr. REICHERT. And, Dr. Chen, from the data in the back of
your testimony we find that the persons who are most vulnerable
to ObamaCare's 30-hour rule are young females with a high
school education or less. Fifty-nine percent of the vulnerable
population are under age 35. Sixty-three percent are female.
Fifty-three percent have a high school diploma or less. Is that
true?
Mr. CHEN. Yes, sir, that is true.
Mr. REICHERT. These are the groups who are most likely to
lose hours and earnings as a result of ObamaCare's 30-hour
rule. Do you think the Administration intended for these groups
to lose hours and earnings?
Mr. CHEN. I would hope not, sir.
Mr. REICHERT. Won't many of them be single moms who are
already struggling to raise children on a limited income?
Mr. CHEN. Unfortunately, yes, that may be the case.
Mr. REICHERT. And why do you think it makes sense to
reduce--or does it make sense to reduce their hours and wages
as the 30-hour rule will do?
Mr. CHEN. You know, I think the reality is that this is
another example of not thinking through the incentives clearly.
And, obviously, what's happening here is that many of these
individuals are going to feel the impact of the 30-hour rule,
although that may not have been intended at the time but
certainly will be the outcome.
Mr. REICHERT. Mr. Chairman, I yield back.
Chairman CAMP. Thank you.
Dr. Boustany is recognized.
Mr. BOUSTANY. Thank you, Mr. Chairman. Leonard Frank is a
constituent of mine in Lafayette, Louisiana. When he was in
college some years ago, he started working at a Pizza Hut. And
he started probably at minimum wage and worked and saved. Today
he's a proud owner of America's Pizza Company, which is
headquartered in Lafayette, Louisiana. They have 148 Pizza Hut
locations in five States and 4,000 employees, a real
entrepreneur, a great American story.
I spoke to Leonard, and he told me, because of this 30-hour
rule, every employee--every employee--in his organization will
be moving to a less than 30-hour workweek. The company--he made
an economic decision. The company was going to be penalized $3
to $4 million per year under ACA if he didn't make this
decision.
Furthermore, this decision will primarily affect college
kids, first-time employees, and single working mothers. And in
his business he starts them off above minimum wage. He pays
market rates. This provision is now forcing employees to leave
the company to seek out minimum wage jobs to make up lost
hours. Dr. Chen, is this the new normal for America's working
families?
Mr. CHEN. We've certainly seen some troubling trends over
these last several years, Congressman. As I mentioned earlier,
7.8 million Americans currently are in part-time work but
desire full-time work. They're unable to find it due to a
variety of different economic reasons. And beyond that,
certainly a number of individuals will face--as we argue,
almost 3 million individuals will face potentially their hours
being cut because of the dynamics created by the 30-hour rule.
Mr. BOUSTANY. Mr. Trautwein, you represent the retailers.
Is this the new normal?
Mr. TRAUTWEIN. I fear it could be. There is a 1-year delay
in the employer-mandated penalties. So I think that has
softened the path. There is also a prohibition in the ACA
against making insurance-based employment decisions. That may
be deferring that. But if I were out there running a store, I'd
have to think twice about the next hire I make and where I
would place that individual in my company. So it's certainly
not good.
You know, from a standpoint of a part-time employee, some
want to work more. They want to work their way into full-time.
And retail and chain restaurants have rewarded the best-
performing employees that way. Others wrap their work around
school, around other obligations, and they want to stay part-
time. So, again, it's a question of how many dollars are in
their pockets. Are they working under 30 hours or up toward 40
hours. And, certainly, from that standpoint, they're better off
at that higher rate of compensation.
Mr. BOUSTANY. Thank you.
Mr. Chairman, I have a letter from the NFIB that was
addressed to you and to Ranking Member Levin. And I would like
for it to be made part of the record.
Chairman CAMP. Without objection, so ordered.
Mr. BOUSTANY. Mr. Anastos, it's been almost 4 years since
the law passed, and the employer mandate has been put on hold.
It would have gone into effect this month. What--I mean, you're
still having to prepare for this because there's a temporary
reprieve in this. Do you have the information you need to make
decisions?
Mr. ANASTOS. It's funny you should ask. I mean, well, not
funny you should ask, but it is so--I have met with more
people, the head of the insurance commission in Maine, every
insurance person I can think of. And the problem is it's hard--
it's almost like that old saying, ``Nailing Jello to a wall,''
to figure out really how much it's going to hurt us or not hurt
us. So do I feel I have all the information? I have all I can
possibly get. But then, of course, the law changes all the
time. I don't know.
Mr. BOUSTANY. So you're faced with tremendous uncertainty
as you try to plan how to grow your business and create jobs?
Mr. ANASTOS. That's the understatement of the year here
really, truly, truly.
Mr. BOUSTANY. Thank you. I yield back.
Chairman CAMP. All right. Mr. Doggett.
Mr. DOGGETT. Thank you, Mr. Chairman, and thanks to our
witnesses. There are those who believe that we are better off
in America if many of the people who serve our meals, make up
the bed at our hotel room, or educate our youth cannot access
health insurance. I don't share that view. I would rather like
the people who are serving my meal to have gone to the doctor
if they have the flu or maybe gotten a flu shot and have access
to health care.
I think the underlying reasoning of those who would repeal
the Affordable Health Care Act is not unlike those who say they
are helping minimum wage workers by keeping the minimum wage at
a minimum and not raising it to a livable wage, as the
President is seeking to do through an executive order for those
who are Federal contractors and which the Congress should
extend to all minimum wage workers.
It is true that the Affordable Care Act has been blamed for
just about everything but the polar vortex. And I read this--
heard this story about the bus drivers in Indiana. I mean, that
was something that was reported last June about an event that
won't even occur until 2016. You have to wonder whether it
really had anything to do with the Affordable Care Act.
We had a little of that with at least one community college
system in Texas blaming the Affordable Care Act for what it
would do with adjunct faculty. And they ended up having to
retreat from that position because, in fact, in Texas, since
2003, adjunct faculty at our community colleges have been
eligible for health coverage of the same type that is offered
to full-time faculty and employees. Indeed, 3 years after the
Affordable Care Act, last year Governor Rick Perry signed a law
that made even more adjunct faculty eligible for that health
coverage. You have to think that if a State can't meet the low
level Governor Perry sets, that it really has problems much
bigger than adjunct faculty.
At Austin Community College at the Alamo Colleges, we have
many adjunct faculty members that are working fewer hours than
30. They are eligible to get coverage. The question is who pays
for it. And at the adjunct faculty level, if you have a lawyer
who is part-time teaching business law, they probably have
coverage through their employer already unless the insurance is
unaffordable; it exceeds 10 percent--9\1/2\ percent, I guess--
of their income, there is not an obligation to provide
coverage.
There are many reasons why community colleges use adjunct
faculty. Some of them are citizens in the community who are
doing very well and enjoy teaching on a part-time basis. There
are many others in some communities, as the Democratic staff of
the Education and Workforce Committee reported in January, who
are treated very poorly and paid very poorly and very much need
the very kind of health insurance coverage that the Affordable
Care Act offers.
There are also many people in the private sector who are
benefiting from the Affordable Health Care Act. I think of Gabe
Farias, who is the Executive Director of the West Chamber of
Commerce in San Antonio, Texas, a group of small businesses
that are really encouraging job growth in that community. Mr.
Farias was telling me that both he and his wife were able to
get significantly better coverage at less cost because of the
exchanges and the Affordable Health Care Act.
I think of Ron Romero, who is in the technology industry,
who talked about the advantages of avoiding job lock that were
offered through the Affordable Care Act that encouraged the
expansion and innovation in small business. And it's to be
remembered that this 30-hour rule did not come to us like manna
from heaven. Like most of the problems with the Affordable Care
Act, and there are many, it was the result of compromise in the
legislative process.
There were some who said, well, we really should not ask
employers to cover half-time workers. Let's go with 30 hours as
a reasonable compromise. If we had gone with 25, we would be
here today hearing about the 24-hour rule. If we had gone with
35, we would be here today hearing about the 34-hour rule.
I think, Dr. Levy, you pointed out that if we had used the
40-hour standard, what would we have, about three times as many
people affected?
Ms. LEVY. Yes. That is right. We would have three to five
times as many workers potentially at risk of having their hours
cut.
Mr. DOGGETT. So I think what we achieved is a reasonable
balance. We need to be working to see that all Americans have
access to a family doctor, to affordable health care. That is
the direction in which we have moved.
We have done so imperfectly. We have done so with a
considerable amount of bungling in the rollout of the
Affordable Care Act. But its objectives are genuine, and the
potential is great. We need to be working to achieve it instead
of undermining it.
I yield back.
Mr. BOUSTANY [presiding]. I thank the gentleman.
Mr. Smith, you are recognized.
Mr. SMITH. Thank you, Mr. Chairman, and thank you to our
panel, all of you, for sharing your insight and perspective. I
think it is very valuable and important.
I was looking at a report of various entry-level jobs, and
it was intriguing to know the average wage of many of these
jobs. For example, dishwashers earn $8.82 an hour, just under
$9 an hour. I do not think anyone would say that that provides
a great deal of financial comfort. But if they go from 39 hours
a week, earning $344, to 29 hours a week, they would lose about
$53 per week, or the equivalent of a 17 percent pay cut.
And it is very compelling, looking at all of this
information, and certainly as I hear from folks, across rural
Nebraska in this case, there are realities out there that are
very difficult for employees, employers, virtually everyone to
contend with.
So I would ask, Dr. Levy, can you point to perhaps some
component of the healthcare law that reflects the differences
between rural and urban areas of the country?
Ms. LEVY. I am not sure exactly, when you are saying urban
and rural--in terms of the labor markets, do you mean?
Mr. SMITH. Well, as it relates to this issue. We know that
unemployment rates vary drastically from one State to another,
not to mention regions of one State to another.
Ms. LEVY. Okay. Sure. I guess I tend to think of the
impacts of the law being more related to where people are in
the income distribution rather than their geographic location.
So the affordability issue, as you know, is much more of a
problem for lower income families.
Mr. SMITH. Right. And on the affordability topic, have you
studied how the affordability of health insurance would impact
the frequency of its purchase?
Ms. LEVY. Oh, yes. We do know that people are more likely
to buy things when the price is lower. Yes.
Mr. SMITH. But in terms of its practical application, has
that been a part of recent reviews or studies?
Ms. LEVY. We expect that the combination of the individual
mandate in the Affordable Care Act combined with the subsidies
through the premium tax credits will have a large effect on the
takeup of health insurance, yes. So we would expect many more
people to get insurance both through the exchanges, ultimately,
and through the Medicaid expansion. And we expect that to
improve.
The evidence we have suggests that that will have positive
effects on health and financial security so that the overall
plan of the Affordable Care Act, in making health insurance
more affordable to people, provides better economic security.
Mr. SMITH. Now, you indicated in your testimony that
because of the ACA, such workers will be able to choose the
schedules they prefer. Prior to that, in context, you
highlighted how people are in different situations. Are there
some specific examples of people really being able to have more
flexibility or more choice of their hours in the last few
months?
Ms. LEVY. I have not heard any individual examples of
someone saying, thank goodness I can now go to part-time, or
now I can start my own business. But I do expect that, over
time, we will be hearing those stories.
Mr. SMITH. Because for a long time, some folks, depending
on their personal situation, have preferred to work part-time.
Would you agree with that?
Ms. LEVY. The majority of part-time employment is what is
called voluntary part-time employment, yes, people who work
part-time because they are also taking care of family members
or going to school or something like that.
So, as Dr. Chen has said, 7.8 million workers are currently
in voluntary part-time, what we call part-time for economic
reasons, but that is higher than usual at the moment because we
are recovering from a recession still. And even now, it is less
than half of the part-time workforce. So the majority of part-
time workers want to work part-time.
Mr. SMITH. And, Dr. Chen, have you ever affixed a dollar
figure, perhaps, an hourly dollar figure, on the value of
health insurance?
Mr. CHEN. I do not have a single figure, Congressman. What
I would say is that certainly it is the case that under the
ACA, for employees who are working in that 30- to 36-hour slot,
it is more expensive for the employer to provide that employee
with health insurance than someone working closer to 40 hours,
let's say, because of the 9.5 percent affordability requirement
contained in the ACA.
So I am not sure if that gets at the exact question you are
asking, but I think the point is simply that it is more
expensive for the employer to furnish insurance to someone
working 30 to 36 hours versus someone working 40 or more hours.
Mr. SMITH. Thank you, Mr. Chairman.
Chairman CAMP [presiding]. Thank you.
Mr. Paulsen is recognized.
Mr. PAULSEN. Thank you, Mr. Chairman.
This testimony really strikes home with me. It is very
similar to what I am hearing from a lot of folks in Minnesota,
employers, particularly in the restaurant and retail industry,
and also fire departments.
There is no doubt that I have heard from several fire
chiefs that have told me the bottom line is that if the
language is not changed, the law is not changed in the
Affordable Care Act, a lot of city fire departments are going
to have to either lay off or reduce hours for volunteer
firefighters--volunteer firefighters--or they are going to have
to drastically increase taxes to expand the budgets for these
fire departments.
And companies are no doubt having to scale back hours with
more part-time jobs and less full-time jobs. So there is a
direct consequence that employees that have had good full-time
jobs now have part-time jobs.
I know this one restauranteur that I spoke with in
Minnesota. He owns seven restaurants. He has 535 employees. And
many in this industry, you think they only employ part-time
folks. Right? He actually has 41 percent of his workers working
full-time.
But now, because of the new law, he is being forced to move
all of those folks, nearly all of them, into part-time status
of 29 hours, and that is just wrong. That is the consequence
again.
Mr. Chen, let me just ask a question on retail sales
workers. How does the 30-hour rule impact retail sales workers?
Mr. CHEN. The research that we have done suggests that they
are clearly at risk because of the 30-hour rule. And, in fact,
if I recall correctly, I think they are most at risk because of
the nature of their work schedules and the way in which the 30-
hour rule sets up the incentives for them potentially to have
their hours cut. So I would say that workers in the retail
industry are at significant risk.
Mr. PAULSEN. And, Mr. Trautwein, this just follows up with
your area of expertise. What is different about the retail
business that makes the 30-hour rule such a top priority for
your industry as opposed to, say, an insurance company or a big
Wall Street firm?
Mr. TRAUTWEIN. It is really the nature of the retail
industry. Frequently we are open 7 days a week, not quite 24
hours a day, but occasionally that, too. But because of the
close margins the retail industry has, certainly if we increase
the cost of labor, we can afford to have fewer employees in.
And it is less expensive to have part-time employees than have
full-time employees.
But from our standpoint, this is not something that we are
either for or against insurance coverage. Retailers were one of
the first industries to come up with health insurance coverage.
So it is a question of how much additional cost for providing
coverage, how much additional compliance cost, how do you keep
people in that sweet spot there, and what effect that has on
how people operate their businesses.
There are very, very expensive ways, technological ways, to
manage workforce within that look-back period. But I worry a
lot about the small independent stores who maybe are up above
that 50-employee applicable level. It is a lot harder for them
to manage that cost. So a lot of what we retailers and chain
restaurants worry about is the compliance costs of managing
this.
Mr. PAULSEN. Thank you, Mr. Chairman. I yield back.
Chairman CAMP. Thank you.
Mr. Kind is recognized.
Mr. KIND. Thank you, Mr. Chairman. And I want to thank our
witnesses for your testimony here today.
When I had supported the Affordable Care Act a few years
ago, I was one who did not believe it was a perfect bill, that
it was going to be a bill that required constant updating and
changes and reform as we learn what is working and what is not.
So getting feedback is going to be important as we move
forward so that we try to obtain the goal of more affordable,
more quality healthcare coverage for all Americans. And
hopefully it is a goal that is shared. But the constant
drumbeat of criticism about what is taking place I do not think
is very helpful or constructive in trying to come up with some
workable solutions.
Recently, I think there has been some misconceptions about
Target's recent announcement that they released. Earlier this
week, Target, on a blog, clarified a few of the points that
have been, I think, misinterpreted.
First of all, they made clear that they are not reducing
hours for their workers. They do not support raising the 30-
hour rule to a 40-hour full-time rule. And they also feel that
less than 10 percent of the workers that are now going into the
exchange are better served in the exchange because there is
more affordable coverage in it.
So, Mr. Chairman, with your permission, with unanimous
consent, I would like to introduce the Target blog for the
record for the sake of clarification at this time.
Chairman CAMP. Without objection, so ordered.
Mr. KIND. Dr. Levy, let me ask you just a couple of
questions with my time remaining. Anecdotally, I have been
struck by the number of people in Wisconsin who have come up to
me talking about the job lock issue, that now, for the first
time, they are able to branch off and start a business that
they were reluctant to before for fear of them or a family
member with a preexisting condition then losing healthcare
coverage.
What are you seeing in the labor market in regards to job
lock and whether or not this might spur some more entrepreneurs
that have the ability now to finally strike out on their own if
they do have a good idea or if they have wanted to start a
business for some time?
Ms. LEVY. There is good research that supports the idea
that currently people are inhibited from starting businesses by
the fact that employment and health insurance are so closely
tied to each other. So the best research we have looks at, for
example, people who already have employer-sponsored health
insurance coverage through their spouse. Those people are
significantly more likely to go start a business than people
who do not have that option of coverage.
Also, you can see at age 65, for men who are working full-
time, there is a jump up in the probability of starting a
business at age 65 when men become eligible for Medicare that
is presumably related to the fact that now they no longer have
to keep working for the health insurance.
So all of the evidence from what we have seen so far
suggests that the fact that the Affordable Care Act provides an
alternative to employer-sponsored coverage should increase
mobility across types of employment and increase the rate at
which people start businesses.
Mr. KIND. Now, I have a lot of small business owners,
obviously, in Western Wisconsin. Many of them have been able to
take advantage of the tax credit. When the ACA was first
passed, the data and the information we had showed that with
employers of 50 or more workers, roughly 95 percent of them
were already providing healthcare coverage.
Of course, those small businesses up to 50 workers were not
required under the law to provide healthcare coverage. But
there were incentives to help small business owners be in a
better position to extend coverage for their workers.
What are you seeing with small business owners, small
businesses generally in the labor market, their ability to
start providing healthcare coverage for their workers?
Ms. LEVY. As you say, the Affordable Care Act has included
and still includes a premium tax credit to help offset the
costs for small businesses that are providing health insurance.
It is also true that it is built into the Tax Code that there
is assistance for employers providing insurance because health
insurance is not taxed as income to the worker.
So there is a significant advantage to employers who
provide health insurance compared to providing that
compensation in the form of wages. That is one important reason
why so many small firms, in addition to almost every large
firm, already provide health insurance for their workers, even
in the absence of any kind of requirement to do so.
Mr. KIND. We are hoping with the creation of the small
business health insurance marketplace, too, that there will be
a better choice for them with affordable rates that they will
be able to extend to their employees.
Oftentimes, this conversation is focused on some of the
anomalies that are working their way through the system, about
the 30-hour week or 40-hour week, and not enough focus about,
all right, if it is not working, then what is the alternative
of making sure that those workers have access to affordable
healthcare coverage?
We just saw one announced on the Senate side by some
Republican Senators, and it is one big cost-shift proposal, is
what they are offering in their plan. And it is taking away the
tax exclusion within the Code, making it harder then for
businesses to be able to offer healthcare coverage, and then
shifting.
And this has been a trend, I think, with a lot of large
businesses. We are getting away from defined benefit plans to a
now-defined contribution. Pensions are going away. And the
concern I think a lot of workers are feeling is that employer-
based healthcare coverage, too, is going to either continue to
be shifted on their backs through higher deductibles and copays
or it will just go away entirely.
What trends are you seeing in that regard, Dr. Levy?
Ms. LEVY. Well, there is very little evidence that there
will be large-scale dropping of employer-sponsored coverage by
large firms. They have almost all always offered it, even in
the absence of a requirement to do so.
The business case for doing so remains strong, and in fact,
it is even stronger as a result of the individual mandate
because now even more workers--and we have heard that from Mr.
Anastos--even more workers want to get health insurance. So
large firms have very strong incentives, as they always have,
to continue to offer employer health insurance.
Mr. KIND. All right. Thank you.
Chairman CAMP. Mr. Marchant is recognized.
Mr. MARCHANT. Thank you, Mr. Chairman.
I received a letter recently from a Tom Hardeman, who runs
a McDonald's, has a franchise in my district:
``The Affordable Care Act must be repealed. The financial
impact of this law on my business will be devastating if not
changed. I do not think I need to go into details, but there
are businesses across the country that will go broke because of
this unreasonable law.
I will repeat what I said to you in the office. I used to
think of Burger King, Wendy's, and Sonic as my competition and
the greatest risk to my business. But now I believe it is our
government. As I look into the future and assess risk, it is
regulation, taxation, mandated programs, and interference from
the government that has the potential to destroy my business
and small businesses like mine across this great land.''
This is just an example of the many letters that I receive
in my office every day, and many of the comments are about the
lack of flexibility the ACA gives to part-time employees.
Dr. Chen, not only is health care a major consideration for
companies when they consider moving someone from part-time to
full-time, but there are pension obligations that go along with
it. Is it fair to say that if you were to move somebody from,
say, 36 or 39 hours to a 40-hour full-time position, that it
could add 30, 35 percent cost to employ that person readily?
Mr. CHEN. Certainly the addition of the additional hours
plus the additional benefits could add up. Yes, sir.
Mr. MARCHANT. So that same company now is having to make a
decision to keep that person on to bring them back to 29 hours.
Now, some of the unintended consequences of that, I believe,
not in the higher-paid staff but in the restaurant business,
the hospitality business, is that many of those employees are
near minimum wage or just above minimum wage.
And if you take them from, say, 39 hours a week, they are
above some of the thresholds that are very important in the
public assistance world. If you take them from 39 hours to 29
hours, in many instances they will then begin to qualify for
Medicaid. They will then begin to qualify for food stamps. They
will then begin to qualify for almost a 100 percent supplement
to their Affordable Health Care Act.
So they will pay much less into the Social Security old age
fund. They will pay much less into the Social Security
disability fund. And it will trigger all kinds of other public
assistance.
So, really, does this law enable people to get out of
poverty and to begin to work in the workplace and get
themselves off of all of these assistance programs, or does
this law really push those same people back into a dependence
mode?
We already have a situation where major corporations in
America are being accused of bringing their employees in and
coaching them on how many hours they should take and how few
hours they should work at the amount, and then they begin to
show them if they will work a certain number of hours, then
they can trigger the food stamp threshold. They can trigger the
Social Security threshold. They can trigger the Affordable Care
Act threshold.
To me, if you look at this in a long-term perspective, the
Affordable Health Care Act, the net effect of it, is not going
to be that more of these people are going to have health
insurance and more of these people are going to be more
productive. It is going to create a new normal where people
will not work as much because their access to benefits will be
so much greater because they are working less.
Thank you, Mr. Chairman.
Chairman CAMP. Mr. Reed.
Mr. REED. Thank you, Mr. Chairman. Thank you to the panel.
I am going to echo some comments from Mr. Marchant, and
those comments are to read to you a real letter from a real
person from western New York that is dealing with this
situation.
Last week, I received this letter from Victor Tarona in
Jamestown, New York, a small town in my district, who is the
owner of a local coffee shop, a Tim Hortons, sharing his
frustrations with me as a small business owner who is trying to
keep his restaurant afloat while doing the best thing for his
employees while complying with the maze of regulations coming
out of Washington.
He writes, ``Dear Congressman Reed: As a hardworking
restauranteur, I am writing to urge you to work in a bipartisan
way to address the challenges to me and restaurant operators
like me with the Affordable Care Act--the definitions of full-
time employee, applicable large employer, and the automatic
enrollment provision.
``The healthcare law has a particularly profound impact on
the restaurant and food service industry. Our businesses are
labor-intensive, with low profit margins, with a workforce that
is young and mobile, while employing a significant number of
part-time and seasonal employees. Due to these characteristics,
the law is more difficult for restaurants to comply with than
many other employers.
``It is critically important that the law's definition of
full-time employee be rewritten so that it is more in line with
the current employment practices and reflects my workforce's
needs and my employees' desires for flexible hours. If not
addressed by Congress soon, disruptions to the workforce could
and will occur, and flexible work options for employees will
begin to disappear in my operation.
``The definition of large employer under the law is based
on a complex, 12-month calculation to determine whether an
employer has 50 or more full-time equivalents, a calculation
unique to this law and not easily implemented in large shift
work environments.
``The annual calculation is unnecessarily complicated and
sweeps millions of small businesses into its reach. Those on
the cusp of the threshold must closely track their status,
which increases small businesses' compliance burden. Congress
should act to simplify the determination who is a small or
large business under the law. Thank you for considering these
issues.''
That is a real person. That is not some made-up issue. That
is not some made-up fact or anecdotal case. That is a real
person that is dealing with this law today. And that resonates
with me.
And it is not just the definition of full-time employee;
it's the compliance cost. As a small business creator myself
prior to when I came to Congress, to comply with these
mandates, to comply with these regulations, takes real time. It
takes real money. It takes a lot of stress as an owner of a
small business.
This gentleman employs 120 of my friends, neighbors, family
members, and he is reaching out to me and telling me, you have
to do something. So I get a little frustrated when I hear
colleagues on the other side of the aisle say this is not
really an issue, it is not something that needs to be dealt
with, that we are trying to blame everything under the sun on
the Affordable Care Act. That is not the case.
I care about these people. This is not fair. These are real
people that are business owners that have gone out there,
risked their livelihoods, are employing real people, and those
people that are employed? Just do a calculation.
In New York, we have an $8 an hour minimum wage. So let's
assume he takes his employees and goes from 40 hours a week
down to 30 hours a week, just to comply with this situation he
is dealing with on a day-to-day basis. That is $80 less each
week they are taking home, and about $350 each month.
I don't know about you, but there are a lot of people in my
district that are struggling. And when they get impacted by
losing $350 a month because of some policy out of Washington,
D.C., that is frustrating.
So I guess I will turn to you, Mr. Trautwein. You represent
a lot of people in the retail industry. What Victor is
explaining to me and reaching out to me for help with, is that
real or is he just making this up?
Mr. TRAUTWEIN. Unfortunately, Congressman, it is very, very
real. I spend a lot of time trying to help my members
understand the various requirements of the Affordable Care Act,
when they need to start worrying about them. This issue of the
counting of variable-hour employees in January, I am sure there
are still companies who are not aware of that and then will be
foreclosed from having as much as a 1-year look-back.
But to your point, their stock in trade is not health care.
They want to run their business. They want to run their
restaurant. And their compliance burden with this is
tremendous. If they're lucky, they've got a licensed insurance
agent who can lead them through this. But the complexity of the
different requirements are continuing to pile up, and they are
not happy with that compliance burden.
Mr. REED. Thank you. With that, I yield back, Mr. Chairman.
Chairman CAMP. Mr. Davis is recognized.
Mr. DAVIS. Thank you very much, Mr. Chairman.
Dr. Levy, as I have listened to the discussion this
morning, I am reminded of myself, that I have attended in the
last 2 months at least five openings of new facilities, new
opportunities--community health clinics, school clinics for
teens. And I believe that in each one of these instances, new
individuals are also being hired to take care of the additional
workload that is developing.
My county government has actually signed up more than
100,000 potential clients that they are going to be serving
ultimately through their County Care program due to a Medicaid
waiver that they were able to acquire.
Does the impact of these new services, new individuals, new
clients, individuals who in some instances are in great need of
health care to prevent debilitating experiences that they will
have later on that will take them out of the workforce, that
will prevent them from working at all, what impact does this
have on job creation and our economy as a whole?
Ms. LEVY. I think that is a great point. The best evidence
we have on the overall impact of what the Affordable Care Act
requires of employers comes from Massachusetts and Hawaii. And
I do not mean to dismiss either the economic or the emotional
resonance of the stories from individuals that we are hearing.
But at the same time, I think it is important to look at
the big picture, to take into account the fact that there are
both other investments in hiring people occurring as a result
of the Affordable Care Act; and also the fact that the economy
is a powerful engine of growth, even as we are recovering from
a recession, even in the face of these new requirements that we
are hearing from my fellow panelists, are presenting a
challenge for them.
As I said, the best evidence we have of what the overall
picture is, adding up all of the stories that people tell and
counting them as data, comes from Massachusetts and Hawaii,
where we see no aggregate effect on employment, no negative
effect on employment, and in Massachusetts, no shift toward
part-time work as a result of the employer health insurance
mandate.
So I think the big picture--while it will always be
possible, in an economy with 150 million civilian workers, it
will always be possible to find heart-rending stories of bad
things that are happening to people that their employers may be
attributing to the Affordable Care Act, the aggregate evidence
we have is that the Affordable Care Act will not harm the labor
market.
Mr. DAVIS. I have also listened intently to the gloom and
doom that is being projected, and some of which is being
experienced, as corporations and businesses and everybody
figure out how do they best navigate the compliance.
It seems to me that talking about reducing hours that
people work so that they cannot experience a quality of life
that simply becomes desirable to me is not something that we
should be encouraging businesses to do in our country.
How would you respond to that notion?
Ms. LEVY. I think that is right. You don't want to do
anything that creates an incentive that affects--you want to
minimize any kind of distortion that might be associated with
these kind of regulations. That is why you want to have as few
workers as possible at risk of having their employers cut their
hours, and that is one reason why it is very important to keep
the threshold at 30 hours instead of 40 because you have many
more workers who are at risk if you move the threshold to 40
hours.
Mr. DAVIS. Thank you very much. No further questions, Mr.
Chairman.
Chairman CAMP. Thank you. Mr. Young.
Mr. YOUNG. Thank you, Mr. Chairman. I ask permission to
submit for the record a statement by NFIB about the impact the
30-hour rule is having on small business, and in support of
H.R. 2575, to restore the traditional definition of ``full
time'' within the ACA.
Chairman CAMP. Without objection, so ordered.
Mr. YOUNG. Just last week, I visited with the
superintendent of a school in southern Indiana in my district,
in Salem, Indiana. She was distraught, joined by other members
of her school board. She was distraught that this new
requirement, not only leading to administrative costs, which
are burdening the school whose budget is already constrained,
but she is concerned about the future, the future of her
substitute teachers and the ability to manage personnel.
She is concerned about the ability to schedule said
teachers in the classrooms at the right time. She speculated
that she may have to ask those teachers to come in late while
students are in empty classrooms so they can keep those
teachers below the 30 hour threshold.
Very recently, one of her best employees actually left
citing this specific provision of the Affordable Care Act.
Thirty-nine Indiana school corporations have sued the
Federal Government in reference to this 30 hour provision
because of the undue financial and administrative burdens it
puts on them.
I have talked to representatives from Indiana University
who said they will cut the hours of 1,000 employees over the
coming year to comply with this Act and this provision.
Of course, we have heard the compelling testimony today
from the largest community college system in the country, known
as Ivy Tech out of Indiana. Mr. Snyder is President of Ivy
Tech. We have heard from him today on the impact of this 30
hour provision. It seems clear, at least from your perspective,
that this impact has not been exaggerated, it is not
speculative. It is very real, and it is impacting your
operations here and now.
Has the delay of the employer mandate for 1 year to any
significant degree made it easier to deal with this 30 hour
provision?
Mr. SNYDER. Well, part of the law is the look back
provision, so you actually have to keep the data now. We
started keeping it on October 1. The administrative burden on
this is taking place as we speak.
Mr. YOUNG. What about the changes that were discussed here
today? There were some discussed to solve any problems related
to this 30 hour provision, do you think those proposals that
were put forward--have you heard anything here today that would
entirely solve the challenges you are dealing with?
Mr. SNYDER. No, I think your proposal is probably
directionally the way we have to go. The current law is very
prescriptive and vague at the same time, so that people in our
situation don't really have a full compliance understanding.
I think the other thing which was brought up by your
colleagues about the 40 hour benefit of health care is
something throughout the land, and I think employers--having
spent decades in the auto industry where competitive pressures
are enormous--employers are going to great lengths to preserve
40 hour health care for everybody, and trying to minimize the
reduction in the benefit.
I think this is actually counter-intuitive, and that making
the 30 hour week the threshold is going to force everybody in
that same bucket and add additional cost for us, which is $12
million on a $25 million current spend, and is unachievable.
Mr. YOUNG. Thank you. Mr. Trautwein, you are here obviously
representing the retail industry today. Maybe you can speak to
the retail industry and whether the employer mandate has helped
in an immeasurably significant way addressing the challenges
created by this 30 hour provision.
Mr. TRAUTWEIN. I think it is a huge, huge challenge,
Congressman. We congratulate you on your legislation. We
support it. With the additional tight margins that I mentioned
earlier in the retail industry, it is very hard for us to take
on additional labor costs.
This question of managing people to a new threshold is
something that is very uncomfortable for our stores and
restaurants.
From our standpoint, it is a big problem.
Mr. YOUNG. Thank you. I hope we can move forward, we can
address this in a bipartisan way. I am proud of the bill you
referenced that I introduced with Representative Kelly,
Representative Paulsen, and Representative Walberg. I hope we
support this in a bipartisan fashion moving forward. We need to
restore this traditional definition of ``full time'' under the
Affordable Care Act. I yield back.
Chairman CAMP. Mr. Griffin.
Mr. GRIFFIN. Thank you, Mr. Chairman. I am going to start
out by asking you, Dr. Chen, where did the 30 hour number come
from?
Mr. CHEN. Congressman, I believe there are different
explanations, one is it was a product of legislative
compromise. Some might say it was pulled out of a hat. It
certainly does not seem to make much sense to me from where I
sit, sir.
Mr. GRIFFIN. In Arkansas, we try to apply common sense. I
do not know anywhere where 30 hours is full time. If you just
want to have some kind of requirement, that is one thing, but
to call 30 hours full time--in France, it is not even full
time. In France, it is 35 hours and moving to 40. That is on
its face laughable.
When I look at the folks who have been impacted, let me
tell you the sad part, and this often happens here, good
intentions by people on both sides of the aisle make their way
into legislation which fails.
Let me give you an example. In Arkansas, Arkansas State
University, the alma mater of our Democratic Governor, they had
to cut folks back to a maximum of 28 hours per week.
I assumed those were people, the people that wrote this
law, that wanted to make sure employees had insurance. That is
the goal. What did they get? No insurance and less pay. Genius.
That is a genius Federal program right there.
Let me read you another. This is from the Area Agency on
Aging of Western Arkansas. They did the same thing, went down
to 28 hours per week. These people already had insurance
because prior to the passage of ObamaCare, they had been taking
part in a program offered with the State of Arkansas called
Arkansas Health Networks. These people now lose their health
insurance and get paid less. Just a great deal for them; right?
Asian American Hotel Owners and Operators have complained
to me about this. There have been numerous stories from back
home. Pulaski Technical College has complained. The list goes
on and on.
I do not doubt the intention, the well intentioned actions
of a lot of people, but Washington often gets it wrong. I heard
a lot about Hawaii. I have not been to Hawaii. I have seen
pictures. I do not think Hawaii's economy looks anything like
Arkansas. I would probably dig a little deeper on that.
When I look at who this hurts, they are the people that
folks up here in Washington talk about wanting to help, the
vulnerable. I made a list of the people you talked about, and
you are a sharp guy, Stanford and all that. I look at all these
numbers. I believe what you are telling me.
You talked about lower income folks, vulnerable folks,
seniors, jobs, it hurts jobs. You talked about school
districts, colleges, small businesses.
If I were to adopt the Democrat language, I would probably
say that the 30-hour rule is a weapon on the war on women, the
war on lower income folks, the war on the vulnerable, the war
on seniors, the war on job creation, the war on school
districts, the war on colleges and small businesses. Sounds
ludicrous, does it not?
That is the type of language that is used here. Let me tell
you, the people who say they want to help those folks, they are
hurting them. I have pages and pages and pages of letters,
people talking about the impact of this.
I do not buy your numbers, Dr. Levy. I would like to take a
closer look. Maybe we can sit down. I hear so many voices from
back home, and it is no consolation to them that the jobs they
are losing in the private sector are being replaced by the
county, whatever, expanding government jobs, which are not
sustainable and with borrowed money anyway.
This is ridiculous. That is why I am proud to support my
colleague's bill. I think ultimately we will get there. I think
the President has basically recognized a lot of these problems.
The number one person in terms of appealing ObamaCare has been
President Obama. He does it unilaterally all the time. He does
not like it when we do it. Maybe we can convince him to take a
look at this.
Thank you.
Chairman CAMP. Mr. Pascrell is recognized for 5 minutes.
Mr. PASCRELL. Mr. Chairman, I would hope there would be
growing support now to vote the unemployment insurance back for
those 1.4 million people who lost their long term unemployment
insurance, since you want to help those very people. Do not
hold your breath.
Before I begin, Mr. Chairman, I would like to address one
issue raised earlier in this hearing, if I may. Everyone here
knows I support the ACA and the intentions behind the employer
mandate.
I wrote the IRS a letter raising concerns about the impact
of this provision on volunteer emergency personnel. The Obama
Administration has since indicated they are addressing concerns
that I and others have outlined.
I would like to enter into the record, with your
permission, the response I received from the IRS on this issue,
since many of our Members have discussed this with me, Mr.
Chairman.
Chairman CAMP. Without objection, so ordered.
Mr. PASCRELL. Thank you very much. Mr. Chairman, no one can
deny that the facts are the facts, that healthcare spending
growth has slowed to the lowest levels in 50 years. Medicare
per capita cost growth is historically low.
The fact that is in addition to providing 32 million
Americans with heath insurance, many for the first time, and
giving parents piece of mind knowing they can take their sick
child to the doctor without being suffocated by medical bills
they cannot afford, the ACA is an investment in our citizens
and in our economy.
Dr. Levy, expansion of Medicaid, a major part of the ACA,
some of the Governors have bought in, some of the Governors
have said no, and some of the Governors have been
obstructionists. That expansion is an important component of
the Affordable Care Act. I think it will help millions of
Americans gain coverage. That has already been seen.
However, expanding Medicaid programs also provides
important economic benefits for States, and the Federal
Government will pick up virtually all the costs of the
expansion.
According to Families USA, in my home State of New Jersey,
``The expansion of the Medicaid program will insure nearly
400,000 residents.'' That will result in $1 billion in new
Federal funding and support 14,500 jobs by 2016.
Unfortunately, not expanding the Medicaid programs is just
one way some of the Governors are priding themselves as being
impediments, God knows, we have seen enough here, to the ACA's
success.
In my home State of New Jersey, thankfully, the Governor
got something right, the Governor decided to expand our
Medicaid program. However, he continues to sit on more than $7
million in Federal funding to help educate our residents about
the ACA. If he does not spend it, we should get it back. I am
fighting for this in every State, and let private organizations
educate the public.
Dr. Levy, can you discuss some potential positive economic
effects just on that portion of the ACA, Medicaid expansion?
Ms. LEVY. Absolutely. I think that is a very important
piece of this story. I am also fortunate enough to live in a
State where we have enlightened Republican leadership that has
taken up the Medicaid expansion, and in Michigan, we expect
this to provide coverage to 400,000 new Medicaid enrollee's who
previously would not have had insurance, with significant
health and financial benefits, in terms of providing financial
security.
In Michigan, over the first 10 years of the expansion of
Medicaid, because of the significant Federal role in paying for
the expansion, it actually reduces spending by the State. That
has been shown in an analysis that we did at the University of
Michigan, the State House and Senate fiscal agencies also
released an analysis showing that.
By reducing what the State has to pay--the State currently
pays a lot for mental health and community health care for
people who will become folded into Medicaid, and as a result,
it lifts some of the pressing burden on the State who can then
spend more money on education, highways, or many other things
that Michigan would like to spend money on.
Chairman CAMP. All right. Mr. Renacci.
Mr. PASCRELL. Mr. Chairman, may I ask one question?
Chairman CAMP. Just quickly.
Mr. PASCRELL. Thank you, Mr. Chairman. What was the
situation with mental patients before, when they were not
covered by Medicaid?
Ms. LEVY. The State spends a considerable amount of money
on community mental health spending, so mental health care that
is provided through public clinics. Those patients would now
have access through Medicaid to other providers and the State's
commitment through the community mental health system is
reduced.
Chairman CAMP. Mr. Renacci is recognized.
Mr. RENACCI. Thank you, Mr. Chairman. I want to thank the
witnesses today also. As a business owner for approximately
three decades, I often wondered why some of this legislation
would come out of Washington, and then I realized many times
when legislation comes out of Washington, it is by people who
never have to live with it.
As a small business owner for almost three decades, I had
to, and I understand the struggle that small business owners
are going through on a day-to-day basis, especially with the
ACA and with the hour requirements, and I also realize that
every day they have to make decisions on whether they lay
people off, whether they can add people, what are they going to
do next?
Coming from Ohio, the Cleveland/Akron/Canton area, I get
the opportunity to go back on a weekly basis, so I am talking
to these people. It is shocking when I hear many of my
colleagues on the other side say this is not affecting some of
these people.
Let me give you some examples in my district and in the
Cleveland/Akron/Canton area of what is going on with the hours
and the Affordable Care Act.
The Cleveland Clinic, which is ranked among the top four
hospitals, has announced layoff's of employees as a direct
result of the Affordable Care Act. Summa Health Systems has
laid off 58 workers since September, another 25 in December.
Akron General Health System, Summit County's second largest
employer, laid off 132 workers in February and another 30 in
September.
The City of Akron and the City of Medina, the City of
Fairlawn, the City of Tallmadge, and the City of Westlake, are
limiting part timer's to fewer than 30 hours per week. Cuyahoga
County Community College capped hours for 1,559 part timer's at
20 hours per week. Kent State University limited course loads
of adjunct faculty. Medina City Schools cut weekly hours for
cafeteria workers and teacher's aides from 30 to 28 hours per
week. Stark State College cut hours of adjunct faculty at 29
hours per week. University of Akron cut course loads for part
time faculty.
A local tavern in Canton, Ohio, saw a 32 percent increase
in its projected premiums after the employer mandate was
delayed. If premiums increase again, they will have to look at
a reduction in workforce or stop providing health insurance to
their employees.
Claudia, from Cleveland, wrote, concerned over losing her
employer-sponsored health coverage after previously having been
laid off from a full time job. She accepted a part time job at
J.C. Penney that offered her affordable health care. However,
her employer has now stopped offering insurance for part time
employees due to the ACA.
John, from Wadsworth, a small business owner, wrote to tell
me that he will not be able to offer insurance in the future
due to increased costs as a direct result of the ACA.
Most recently, a woman working at a counter at a local
restaurant in my home town said to me, Congressman, I have been
here for 22 years, I have worked 32 to 35 hours per week, I
love my job. I enjoy my job. Now, because of the ACA and the
skyrocketing costs, we have been told that all of our staff
will be reduced to approximately 28 hours per week. That is
approximately a 15 to 17 percent pay cut plus she is going to
lose her health insurance. Now, she said to me, I have to go on
the Affordable Care Act. She looked at me and said, I am
scared. She said, can you help me, can you overturn this law?
These are the kinds of things you hear when you go back to
the district, but when I am in Washington and I hear some of my
colleagues, I never hear that. This is what you actually hear
when you are dealing with these people when you are back there
listening to them.
It is amazing. I worked in the healthcare industry most of
my career. I had nursing homes. I saw your statistics on how
they are going to be affected. I think of those over 1,000
employees that I employed, and look at those nursing
assistants, many of them single mom's, 35 hours per week, that
earned approximately $411.
If the nursing assistant hours are cut back to 29 hours, he
or she will lose $71 per week, or the equivalent of a 17
percent pay cut. That is unheard of when we are thinking of
these single mothers and fathers that are trying to provide for
their families.
I go back to certainty and predictability, and I would ask
this general question. As a business owner, you need certainty
and predictability. I would ask all the panel members, do you
believe the ACA and this hour situation brings certainty and
predictability to the small business owner?
Mr. CHEN. Absolutely not, Congressman.
Mr. ANASTOS. No, not at all.
Mr. TRAUTWEIN. No, sir.
Mr. SNYDER. No, sir.
Ms. LEVY. But you are large business owners. For small
business owners, now their workers can get health insurance
from another source if they have to.
Mr. ANASTOS. Can I just say one thing?
Mr. RENACCI. Yes.
Mr. ANASTOS. We are large business owners. There are large
business owners like general corporations, Wall Street and
such, and then there are small business owners like us. That is
a big difference.
May I just add, the hardest thing to understand here is
this idea of the changing of the rule, the 40 hours is going to
cost more, certainly there are more people closer to 40 hours,
but as someone who has worked many years on the floor by the
hour, I would much rather lose 1 hour of pay, 40 to 39, than 40
to 29. Thank you.
Chairman CAMP. Mr. Kelly.
Mr. KELLY. Thank you, Mr. Chairman. Again, panel, thank you
for being here. I know sometimes we talk about oh, these are
just anecdotal, but I also, like Mr. Renacci, Mr. Young and Mr.
Griffin, have people back home. Barbara Wilson works for the
Arc of Mercer County, Pennsylvania. This is a phenomenal
organization that assists people with developmental
disabilities.
Barbara is a part time employee who used to work 30 to 35
hours a week. She was recently informed that her co-workers,
all part time employees, would be having their hours cut to
around 20 hours a week because of the Affordable Care Act.
Barbara told me she was shocked when she heard this news,
and because of her hours being cut, she said she could no
longer afford the cost of living.
There is also a lot of private companies I have talked to.
I think the chilling effect of this current run is these people
say you can use our story but not my name, because I am afraid
of some type of retribution.
Mr. Anastos, thanks for being here. I know it is tough and
I have people back home who tell me--I have a guy who had 92 of
his 93 employees that worked more than 30 hours a week. Now all
92 have had their hours cut to less than 30 hours a week. On
top of that, more than 30 employees have had access to their
health insurance plans ended.
It is not only affecting the private sector, it is also
affecting the public sector. In our school district where I
come from, they had to implement procedures to keep all the
part time employees working less than 30 hours. The entire
Orange County government has had to reduce all of its part time
employees to just 28 hours.
The purpose of this meeting today was to examine the impact
of going from 40 hours to 30 hours, and I think it is
absolutely ridiculous for anybody to say there is no impact.
Small business owners, we spend about $400,000 a year on
health care.
Mr. Anastos, if you could just relate--I do not think
people get the picture--your total cost of labor and what this
adds to your total cost of labor, and how that affects your
final product that you have to put in the market and compete
against every single person that does what you do?
When you talk about it, also talk about Social Security
contributions, wage taxes, Medicaid contributions. It is a lot
more than people think.
In our place, someone says we need to hire this person. I
say fine, do you know what it is going to cost? They say this
is what we will be paying them per hour. I said that is not my
total cost, you can add about 40 percent to that with wage
taxes and benefits.
Would you talk about it a little bit? You do it every day.
You have to cut checks that you sign the front of, not the back
of.
Mr. ANASTOS. Thank you, Representative. It does add about
40 percent. Well, it adds quite a bit. I would have to look at
it and see exactly what it costs. There are different levels
for different amounts.
Of course, the thing about health insurance is if you have
people you are paying $12 an hour, it is a much bigger
percentage, and it adds to it all the time.
Like I said, we are small businesses in America. We may be
large when considered over 50, but at the same time, two and a
half times our healthcare costs and say we are large businesses
and do we not want to cover everybody? Of course, you do. At
the same time, the survivability of your business is first and
foremost.
Mr. KELLY. Dr. Chen, this idea of the 40 hours to 30, I
have no idea where this came from. I also wonder how it will
impact overtime pay. What are we going to use now as a
definition when we go to overtime? Forty to 30, we have no idea
how this came about. Why did it come about? How did we change
from 40 to 30? Does anybody know?
Mr. CHEN. It certainly does not match precedent that we
have in the Fair Labor Standards Act, which sets 40 hours as
the threshold for the payment of non-exempt employees for
overtime pay.
This is inconsistent with that and one of the reasons why
it raises employer costs.
Mr. KELLY. Here is my question. Since we have cut the
workweek from 40 hours a week to 30 hours a week, that is about
a 25 percent reduction in the number of hours. Using the
President's terminology, it is just arithmetic. If I cut your
hours by 25 percent, then I am going to have to raise your wage
by 25 percent. I see this pivot to the minimum wage now. It is
kind of funny how it kind of matches, the 25 percent less
hours, matched by a 25 percent increase in the minimum wage
that the government wants to establish.
I think that is a Judas goat, okay, we are going to raise
your wage. I do not believe that is the way to approach this.
Mr. Chairman, I thank you so much for holding this hearing.
This is not a Republican issue or a Democrat issue. This is an
American worker issue.
When Mr. Hoffa jumps on this and says you are destroying
the backbone of the American middle class, then there is a
concern.
This effect, it is a very chilling effect, and I really am
concerned about the gap now that is widening between what the
people have faith and trust in and what we are coming out with
in policies.
Mr. Anastos, thanks for being here. Mr. Snyder, thank you.
Mr. Trautwein, Dr. Levy and Dr. Chen, thank you for being here.
I think the greater concern today better be how we are
destroying the American people's confidence in the government
that continues to come out with policies that destroy our
middle class, and then somehow say no, no, that is not the
problem, the problem is we are just not paying enough at the
minimum level. It should never be a minimum wage that we try to
get to. It should be a market wage where we allow all workers
with their skills and their abilities to make as much as they
can.
Thank you all for being here. Mr. Chairman, thank you. I
yield back.
Chairman CAMP. Thank you. Ms. Jenkins is recognized.
Ms. JENKINS. Thank you, Mr. Chairman. I, too, thank the
panel. You have had a long day.
During my short time on this Committee, there have been
countless hearings on the President's healthcare law. Just last
spring, the Committee had the opportunity to question Secretary
Sebelius about the progress of the law. She informed us
everything was proceeding according to schedule.
In July, of course, the President decided to delay
enforcement of the employer mandate until 2015. This was a
surprising but welcome retreat. I think the witnesses here
today have demonstrated this.
This delay, unfortunately, is only a temporary relief for
employees and employers. This fall, employers will have to make
a very difficult decision regarding healthcare coverage and
full time status of their employees. These decisions will
ultimately hurt employees, not employers.
I have a letter here from a Kansan, Jon Rolph, who operates
64 restaurants across the Midwest, and several in my
congressional district. I would request, Mr. Chairman, that
this letter be entered into the record.
Chairman CAMP. Without objection, so ordered.
Ms. JENKINS. Mr. Rolph, whose restaurants employ hundreds
of people, has made a good faith effort in the past to provide
all employees with a modest health insurance plan and will
continue this effort by complying with the employer mandate in
2015.
Additionally, he has made the decision not to cut his
employees' hours below 30 in order to avoid the mandate. This
means that he will continue to offer healthcare coverage for
those folks even though it will be more expensive than his old
plans that were canceled.
This is nothing short of admirable, and is representative
of the strong relationships that many employers and employees
share all over the Nation.
However, Mr. Rolph worries the 30 hour definition for full
time employees could have adverse consequences for companies in
this situation, because his employees tend to work more than 30
hours a week and are offered a health plan, and their option
will be to either take this more expensive health plan or
search for a plan on Healthcare.gov where they will no longer
be eligible for a subsidy.
Mr. Rolph worries that many of these employees will
actually request to work fewer than 30 hours a week so they
will not be offered health insurance by the company and can
obtain subsidies over the exchange.
I doubt these are the outcomes the President envisioned
when he put pen to paper on this law, but the sad reality is
his healthcare law will encourage many Americans to be only
part time employees, which will make it increasingly difficult
for many of them to achieve the American dream.
Mr. Anastos, I feel that your testimony really reflected
the comments of Mr. Rolph and others. As somebody in the
hospitality industry, do you have comments regarding how true
this letter is?
Mr. ANASTOS. Yes, Congresswoman, that letter is right on
the money. I think Congressman Reed had similar comments that I
think were right on the money.
To me, and I have to look at it from the employer's side,
but like I said, I have worked on factory floors and that sort
of thing for many years, and I truly think it hurts the worker
more than us, because they are the ones who are going to have
their hours knocked down by a significant amount, and secondly,
the whole idea about the relationship between us small
employers or even large employers and our employees, it just
creates this wedge and division that is totally unnecessary.
Certainly, I would reemphasize everything that gentleman
said.
Ms. JENKINS. Mr. Chen, would you care to comment on if you
agree this provision will disproportionately hurt the employee?
Mr. CHEN. There is no question the biggest loser from this
is the employee, particularly the vulnerable population we have
talked about today that we look at in our research and others
have looked at as well.
You are talking about millions of Americans who will be
adversely impacted because the incentives created by the law
frankly are perverse.
Ms. JENKINS. Thank you. I yield back, Mr. Chairman.
Chairman CAMP. Thank you very much. I want to thank our
witnesses for their testimony today. I would appreciate your
continued assistance in getting answers to the questions that
were asked by the Committee.
As a reminder, any Member wishing to submit a question for
the record will have 14 days to do so. If any Member submits
questions after this hearing, I would ask the witnesses to
respond in a timely manner.
Thank you very much, and with that, this hearing is
adjourned.
[Whereupon, at 12:39 p.m., the Committee was adjourned.]
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