1 million may lose coverage under longer workweek News added by Benefits Pro on March 3, 2014

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By Allen Greenberg

A proposed Republican “fix” to Obamacare would cut the amount of penalties collected from employers, reduce the number of people covered by workplace coverage by about 1 million and increase the national deficit by nearly $75 billion.

Those numbers are all contained in yet another report from the nonpartisan Congressional Budget Office in response to a request from the House Ways and Means Committee for an analysis of the proposed legislation.

The Save American Workers Act of 2013, or H.R. 2575, would redefine full-time employment under the Patient Protection and Affordable Care Act from 30 hours per week to 40 hours per week.

If enacted, that change would reduce the number of employers assessed penalties and lower the penalties against employers that fail to offer insurance – or offer insurance that does not meet certain PPACA minimums – and that have at least one full-time employee receiving a subsidy through a health insurance exchange.

The CBO and the staff of the Joint Committee on Taxation estimated that enacting the legislation would increase the number of people obtaining coverage through Medicaid, the Children’s Health Insurance Program or health insurance exchanges by between 500,000 and 1 million people and increase the number of uninsured by another 500,000 people.

The legislation, CBO and JCT estimated, would increase the budget deficit by $25.4 billion between 2015 and 2019 and by $73.7 billion between 2015 and 2024.

Under Obamacare, companies with 50 or more full-time employees must offer health insurance to their workers or pay a penalty if at least one employee purchases a plan through the health care marketplace with a federal subsidy. The Obama administration announced earlier this month that businesses with between 50 and 99 workers would not have to comply with the employer mandate until 2016.

In any case, supporters of the GOP bill say the law’s 30-hour-a-week threshold incentivizes companies to shift full-time workers to part-time status just below the 30-hour threshold to avoid paying for employee health insurance. Some health policy experts, however, argue that changing the full-time status to 40-hour work weeks makes it even easier for companies to circumvent the requirement that medium to large firms provide health coverage to their workers.
“By essentially eliminating any requirement for businesses to contribute to the cost of health coverage, Republicans have just embraced a proposal to put wages and benefits at risk for a million or more hard-working Americans, while substantially increasing the deficit,” House Ways and Means Committee ranking member Sandy Levin, D-Mich., said in a statement.

House Majority Leader Eric Cantor, R-Va., said last week that the House plans to take up the measure in March.

Another CBO report, released in early February, said more than 2 million Americans who would otherwise rely on a job for health insurance could quit work, cut their hours or stop looking for employment because of the health benefits available under the PPACA.

Republicans said that report offered fresh evidence that the law will decimate the American workforce, encouraging people to forgo private employment in favor of taxpayer handouts. The White House and other supporters of the PPACA countered that the report supported their assertions that Obamacare would free people to care for their children, retire early or start their own businesses without worrying about health coverage.

Originally published on BenefitsPro.com
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