Impact of the Employer Mandate’s Definition of Full-time Employee on Jobs and Opportunities

Comments for the Record

U.S. House of Representatives

Committee on Ways and Means

Hearing on the Impact of the Employer Mandate’s Definition of

Full-time Employee on Jobs and Opportunities

1100 Longworth House Office Building

January 28, 10:00 AM

by Michael G. Bindner

The Center for Fiscal Equity

Chairman Camp and Ranking Member Levin, thank you for the opportunity to submit my comments on this topic.  

I am not submitting comments based on the impact to the Center for Fiscal Equity, as the Center has only one staff member(me) and, barring an avalanche of contributions resulting from our many comments over the last few years, that I am neither paid or receive insurance.  This does not mean, however, that there is nothing I can add on this issue.

My first real job (not counting one in the school Cafeteria) did not offer health insurance to most of its staff – although I suspect that line cooks and managers might have been provided with something.  This did not bother me much at the time, as I was insured as a minor child under my father’s policy at Rockwell (thanks to the government for funding that insurance in its entirety through either the benefit or his payroll.  I was continually covered all through college (and work study jobs were also uninsured) and graduate school (fellowships provided no insurance and all undergraduate and graduate students were required to provide proof of insurance or purchase it through the university).

My first federal job provided access to the FEHBP, which I used.  All of my beltway bandit jobs since them provided insurance, as well as my job with the DC Government, although with an employee contribution required.  That won’t change for either type of employer because such jobs require a level of education and skill AND because the insurance is backed by the full faith and credit of the United States.

Between good government and quasi-government jobs are assignments with a staffing company.  At first, if I were paying for insurance through COBRA, the staffing firm would provide a partial reimbursement - $50 if memory serves.  It later began providing insurance, which I took in two instances.  In the first, it paid for my pharmacy costs (with co-pays in a reasonable.  It also provided proof of insurance to avoid pre-existing condition requirements the first time I went on my wife’s policy when she became employed. 

The second time the insurance did not go very far because I had more than one .ER visit.  It covered the first one but because of caps it did not cover two additional visits and an admit for a cardio workup. Rather than paying for something I was not getting any additional use of, I dropped the coverage.  This should be a caution to all insurance firms – and to the Congress when it attempts to amend the Affordable Care Act.  On marginal insurance policies, caps within a year only lead people to stop making payments.  I suspect that a policy this bad is no longer offered and that this is a good thing.

My wife and daughter currently have coverage but adding me was too expense, even without a pre-existing condition clause.  Sadly, when she gets a raise later this year, there is no trigger to allow her to adjust her insurance until the next open season – which leaves me to either the Exchanges (which is uncertain due to a subsidy calculation that includes her income) or remaining uninsured.

I am now employed; however it is in a marginal film crew job at a well known cinema.  In this job the managers and supervisors get insurance while the film crew does not.  There are already plans in place (according to the H.R. manager) to cut crew hours to under 30 to avoid the mandate, so this is no myth.

This is a problem which must be solved, although this issue should not be used to hold a vote to repeal the ACA.  We have already had 40 stupid and useless gestures (to quote Brother Bluto of Delta House).  Another one is not required.  Everyone knows that the impetus to repeal is to void the taxation of non-wage income which funds much of the Act.  That is a non-starter.  Changing everything BUT that is possible because it would not draw a Budget Act Point of Order.  In this case, changing how marginal employees are treated for insurance purposes is a valid subject for corrective legislation.

The ending of marginal insurance policies should be allowed to go forward, however people should be able to negotiate prices as individuals for classes of service that are not needed.  Young people don’t need an annual colonoscopy, for example (unless they have a condition that requires it).  Of course, such discounts should be minor and should not lead to a return to the days where being female is both a pre-existing condition and a reason to charge higher premiums.

One needed change is to allow employers to exclude employees who are covered (not potentially covered, but actually covered) under the policy of a parent or spouse when determining whether mandates have been met.

While employers should also be able to exclude occasional workers who work less than the customary schedule for that position, anyone else who does work a customary schedule who is not otherwise insured as a dependent or spouse must be granted insurance under an employer mandate.   The hour threshold needs to be removed.

The penalty per employee should also be dropped.  Instead, the law should be amended to prohibit the tax subsidy for ANY employee if all are not insured.  One cannot beg poverty and insure managers, higher skilled employers and their families while leaving others to fend for themselves in subsidized Exchanges or Medicaid – both of which have significant taxpayer funding – as the Committee well knows.

Any other solution defies the basic fairness the Affordable Care Act was meant to provide.  Firms who cannot afford to insure their uninsured marginal employees should not be able to claim the ability to insure managers and franchise owners.  Indeed, in a perfect world franchisees would be considered part of the larger chain for the purposes of this act, so if individual stores cannot insure employees, headquarters and owners should also be excluded under the Employer Exclusion of health insurance.

I suspect I lost my audience among the House Majority at that one.  Business may or may not like it either.  Ethical firms who wish to ensure their employees will.  Those who consider it a burden will not.

I suspect the business community liked the original formulation – probably because it gave them a way to avoid paying insurance for marginal employees.  Such guile should not be rewarded.  Please amend the ACA to remove both the penalties and the threshold and simply ban firms who don’t insure anyone not otherwise insured from insuring ANYONE.  I suspect the threat of such a reform would likely cause most employers to suck it up and pay insurance to their marginal staff (in effect, pulling an Emily Latella by saying “Never mind.”).  As I don’t trust them to do the right thing, even under threat, I urge passage of the suggested amending legislation.

Thank you for the opportunity to address the committee and share what many of my generation regard as very real concerns, both as our parents age and we approach that stage of life where such decisions may apply to us.  I am, of course, available for direct testimony or to answer questions by members and staff.