Senator Elizabeth Warren (D-Mass.) scolded the Senate on Thursday over a bill that will redefine a full-time work week under the Affordable Care Act as 40 hours instead of the current 30 hours, saying, “This bill is corporate welfare.”
Under the proposed legislation, companies would no longer be responsible for providing health insurance to employees who work 30 hours a week, which, under the current legislation, they are required to do. Instead, Republicans and a handful of Democrats say that the current 30-hour standard gives employers an incentive to cut hours in order to get around Obamacare requirements, saying that full-time employees must be offered insurance.
Under the legislation, which has already passed the House, businesses would be obligated to provide health care only to employees who work 40 hours a week or more, rather than 30.
Despite the claims of the supporters of the new legislation, though, broader economic indicators show that very few businesses have shifted workers to part-time in order to avoid providing insurance, and those who have are seen as the exception rather than the rule. In fact, according to the Bureau of Labor Statistics, part-time work has actually fallen since the law was passed.
In an ironic contrast, though, a Congressional Budget Office report released earlier this month says that if the standard of full-time is shifted from 30 hours a week to 40, many workers will be at risk of having their hours cut, which is exactly what supporters of this legislation say they are working against. This will occur because a much larger percentage of the workforce — about half — works 40 hours a week, whereas fewer than one in 10 employees work around 30 hours a week.
The CBO states that the proposed legislation would increase the incentive to cut workers’ hours from 40 a week to just below and, as a result, up to one million workers could lose their employer-backed insurance. Many of those workers would need to then purchase tax-subsidized policies through the Affordable Care Act exchange, which would add an estimated $53.8 billion to the deficit.
Senator Warren made a clear case that the proposed bill effectively shifts the responsibility of providing workers health insurance away from companies and onto taxpayers during a hearing held by the Senate Committee on Health, Education, Labor & Pensions.
“This bill is corporate welfare. Big corporations would get to cut health benefits for millions of workers, and push people out of their employer insurance plans. Some of those people will lose their health insurance all together. Others would be pushed onto federal programs, expanding the reach of Obamacare, and taxpayers would get stuck with the tab.
“I’m against adding $53 billion to the deficit so that corporations can push their costs and responsibilities onto the government.”
Economist Doug Holtz-Eakin, who once led the CBO, testified at Thursday’s hearing in favor of the Republicans, saying that although his former agency’s numbers were crafted “in good faith,” he disagreed with the findings, suggesting that companies already providing health insurance would not have incentive to cut hours from 40 to 39.
“We’ve come down on different places, I think it’s open to question,” Holtz-Eakin said.
But Sen. Al Franken (D-Minn.) was quick to point out the fact that Holtz-Eakin is now the president of the American Action Forum, which is part of a coalition of groups dedicated to repealing Obamacare.
“I’m not sure that when you’re aligned with a group that has a banner that says ‘Help us stop Obamacare,’ that your estimates are necessarily in good faith,” Franken said.
Tell us what you think — is Senator Warren right? Is redefining full-time work under the Affordable Care Act another example of corporate welfare? Or will businesses keep their employees at 40 hours week, even if the legislation passes?
For more on Elizabeth Warren, click here to watch her call out her colleagues over the Keystone Pipeline, asking them, “Who do you work for?”
[Image via ABC News]