The new Republican majority in Congress kicks off its first week by taking aim at Obamacare's employer mandate, apparently making good on the party's promise to chip away at pieces of President Obama's health-care program. But their strategy appears to run counter to GOP goals.
The fight is tied to the Affordable Care Act requirement that companies with at least 50 full-time employees provide comprehensive and affordable health insurance to 95 percent of their full-time workers or face penalties. The so-called employer mandate defines full-time employees as those working at least 30 hours or more per week.
The GOP bill, one of the first to get consideration in the new Congress, would redefine "full-time employee" under the ACA as someone who works at least 40 hours a week. It sounds commonsense enough — 40 hours is entrenched in American culture as the standard workweek. But studies indicate that what the GOP is trying to do will actually increase Americans' dependence on government-provided health insurance and raise the deficit.
When the nonpartisan Congressional Budget Office scored an identical bill last year, it found that 1 million people would be dropped from their employer-sponsored insurance, causing between 500,000 and 1 million people to turn to public insurance options, such as Medicaid, the Children's Health Insurance Program and the ACA health insurance exchanges. The CBO also calculates it would increase the deficit by about $53.2 billion over a 10-year period, since fewer companies would pay the employer mandate fine and more people would have government-sponsored coverage.
Critics of the employer mandate say it will incentivize firms to stay below the 50-employee threshold or to cut back on the numbers of hours worked each week. But setting the ACA workweek at 40 hours puts far more employees at risk of having their hours reduced, according to a Commonwealth Fund analysis. Compared to the 30-hour definition, "there are more than twice as many workers at high risk of hours reductions because they are within five hours of the full-time definition at firms that do not offer health insurance coverage," the analysis found. Commonwealth also concludes raising the full-time threshold will increase reliance on public coverage through the ACA.
The National Review's Yuval Levin also took note of the Commonwealth findings, writing in November that adjusting the 40-hour workweek "seems likely to be worse than doing nothing." Instead, the conservative pundit wrote, the GOP should focus on repealing the employer mandate entirely.
Ironically, Republicans might find Democrats are friendlier to that idea. The Obama administration has delayed implementation of the employer mandate twice already, though it took effect this year for the largest firms. Businesses have complained about the administrative burden of complying with the mandate, which a relatively small percentage of firms would likely trigger since the vast majority with 50 or more employees already offer coverage. So far, it seems the ACA isn't prompting employers to drop coverage this year, recent employer surveys showed.
And even high-profile Obamacare supporters over the past year have laid the intellectual groundwork for dumping the provision for good, or significantly reforming it. Democrats have been protective of major Obamacare provisions so far, but if they are willing to trade away parts of Obamacare, you'd have to put the employer mandate near the top of that list.
This post has been updated with the latest CBO analysis.