The Gerald R. Ford School of Public Policy at the University of MichiganThe Gerald R. Ford School of Public Policy at the University of Michigan

Levy testifies in front of the House Ways and Means Committee on the Affordable Care Act's definition of full time employment

Thursday, January 30, 2014
Levy testifies in front of the House Ways and Means Committee on the Affordable Care Act's definition of full time employment image

At the House of Representatives Ways and Means Committee hearing on " The Impact of the Employer Mandate's Definition of Full-time Employee on Jobs and Opportunities," Helen Levy testified that concerns about the effect of defining full time employment as 30 hours have been overstated. The Affordable Care Act requires large employers to provide health insurance to employees working 30 or more hours per week, or face fines.

Some, including Ways and Means Committee Chairman Dave Camp, have raised concerns that this definition of full-time employment could create an incentive for firms to keep workers' hours below this threshold. In her testimony, Levy explained that there is considerable evidence that the 30-hour rule will not result in a distortion in labor demand (i.e. a cutback in hours).

Levy also addressed the proposal to shift the cutoff to 40 hours instead, arguing that it would actually exacerbate the problem. This proposal is based on the idea that workers at this higher threshold are more likely than those working 30 hours to have health insurance coverage from their employers already. Levy explained that there are actually more uninsured workers who work 40 hours a week than 30 hours and that about three to five times as many employees would be in jeopardy of having their hours reduced by employers looking to avoid providing insurance if the threshold was raised. She stated:

"The bottom line effect of changing the full time threshold to 40 hours would be to place many more workers at risk of having their hours cut. This change would also increase federal spending on Medicaid and premium tax credits."

The hearing and Levy's testimony received coverage in a variety of news outlets, including Inside Higher Ed, The Indianapolis Star, HealthDay, the New York Times small business blog, and the Cleveland Plain Dealer.

Video from the hearing is below (Committee hearing begins at 00:37:00, Levy's testimony starts at 01:08:00).