House Votes to Change ACA Definition of Full-Time Employee

The U.S. House of Representatives has approved a measure that would change the Patient Protection and Affordable Care Act’s (ACA) definition of full-time worker.

The bill would change the definition of full-time employee to those who work 40 hours per week from those who work 30 hours a week. The law requires employers with a certain number of full-time employees to offer health benefits or face a penalty (see “Treasury Modifies Rules for ACA Employer Mandate”).

Various companies announced plans to reduce employees’ hours due to the ACA’s requirement. However, a report from the Employee Benefit Research Institute (EBRI) indicates an increase in the number of employers shifting to part-time workers is more likely to be due to economic reasons than legislative ones.

In a statement, the National Business Group on Health, a non-profit association of 400 large U.S. employers, called the House’s action an important step toward improving the economy and boosting employment.

Brian Marcotte, President and CEO of the National Business Group on Health, commented,” We commend the House’s action today and fully support the legislation. We believe this change will boost employment, increase opportunities for people working part-time to add hours, and help the economy, particularly for smaller employers and those employers in retail, hospitality and other service industries.”

Marcotte noted that 40 hours is a more common definition of full-time employment than 30 hours, especially among large employers, and that the change would give employers and employees more flexibility in scheduling work hours.