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National Restaurant Association - House hearing details challenges of health care law compliance

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House hearing details challenges of health care law compliance

The definition of a full-time employee and other challenges business owners are facing as they attempt to implement the 2010 health care law were the topic of discussion at a hearing of the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations.

Representatives on the subcommittee agreed with those who testified that more action needs to be taken to make it easier for businesses to comply with the health care law, including reconsidering the law’s definition of full-time as 30 hours per week.

Michelle Neblett, National Restaurant Association director of labor and workforce policy, testified at the hearing along with representatives from the National Retail Federation, U.S. Chamber of Commerce, Main Street Alliance, as well as executives from several businesses. Video of the hearing can be viewed here.

“Members on this committee may have their own opinions on whether passage of the Affordable Care Act was the right decision, but we cannot disagree on the facts,” subcommittee chair Tim Murphy (R-Pa.) said in his opening statement. “The costs and requirements of this law are forcing many businesses across the country to make difficult decisions, decisions that will impact the strength and growth of their companies, the wages of their workers, and their ability to hire new staff.”

Starting in 2014, large employers—defined by the health care law as those who employ 50 or more full-time-equivalent employees—will face possible penalties if they fail to offer health plans to full-time employees and their dependents. Of all of the law’s requirements, the definition setting a new 30-hour-per-week standard as full-time presents the greatest challenge to the industry, Neblett said during her testimony.

“The definition of full-time employee under the law…does not reflect current workforce practices and could have a detrimental impact on a restaurant operator’s ability to continue to offer flexible schedules for some employees,” Neblett said.

The health care law’s definition of a 30-hour workweek as full-time is not based on any existing laws or business practices, Neblett testified. In the restaurant industry, it can be difficult to identify which staff are full-time from month to month, she said.

“One of the attractive benefits of our industry is the flexibility to change your hours to suit your own personal needs,” Neblett noted. “However, for the first time under this law, the federal government has drawn a bright line as to who is full-time and who is part-time. As a result, employers with variable workforces and flexible scheduling must be deliberate about scheduling hours, because there is now a greater financial impact with potential liability for employer penalties if employees who work full-time hours are not offered coverage.”

The NRA has been working to educate restaurant owners about the requirements on the law and the details of federal guidance and regulations through seminars, webinars, online and written materials, including the online Health Care Knowledge Center, Neblett told the subcommittee.

Rep. Pete Olson (R-Texas) noted during the hearing that a new term—“29er”—has emerged in the business world to describe an employee whose hours are limited to 29 hours a week, just below the threshold for a full-time employee. He said he knows of restaurants in his district where employees are seeing their hours limited to less than 30 hours because of the health care law.

“This 30-hour provision needs to be fixed,” Olson said. “We’re trying to fix it. That’s why we’re having this hearing.”
Rep. Diana DeGette (D-Colo.) agreed that the definition of full-time warrants additional conversation. “All of you are bringing suggestions to the table that I think we need to look at,” she said. “Your 40-hour suggestion…I think we should be sitting down to talk about that.”

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