Obamacare and the Workweek

by Yuval Levin

Looking over what some Republicans had to say over the weekend about the early agenda of the new congress next year, I’m struck by the frequent inclusion of a move to change Obamacare’s definition of full-time work from 30 hours a week to 40. John Boehner and Mitch McConnell, in their Wall Street Journal op-ed last week, also committed the new congress to pursue “a proposal to restore the traditional 40-hour definition of full-time employment, removing an arbitrary and destructive government barrier to more hours and better pay created by the Affordable Care Act of 2010.”

I’ve never really understood the case for this move, or why Republicans shouldn’t just pass a repeal of the employer mandate in Obamacare rather than start playing around with its definition of the workweek. 

Basically, the employer mandate requires all employers with more than 50 workers to provide health coverage to full-time employees or pay a fine. But the law defined a full-time employee as someone working 30 hours or more, rather than the usual 40 hours or more. The idea was in part to encompass more employers and in part to limit the degree to which employers cut worker hours by putting the cut-off well below the number of hours that most workers put in—employers are less likely to reduce a worker’s load by 10 hours than by just 1 or 2 to avoid the mandate. 

As Sherry Glied and Claudia Solis-Roman recently found, nearly 29 million employees of large firms work between 40 and 44 hours a week (and about 27 million of them work exactly 40 hours a week), while only about 3 million work between 30 and 34 hours a week and another roughly 4 million work between 35 and 39 hours a week for such firms. Even if you just look at workers not now offered employer coverage, this difference means that putting the cut-off for the employer mandate at 40 hours would likely put far, far more people at risk of having their hours cut than leaving it at 30 hours. That would make for a worse effect on workers and on the economy. So by setting the definition lower, Obamacare’s architects were trying to mitigate the damaging effects of the employer mandate some, and by setting it higher Republicans would be worsening those effects.

Of course, the effects on workers near the 30-hour cut-off are still unacceptable, just as Boehner and McConnell suggested. But the solution to that is not to punish far more workers but to lift the burden off of all of them by eliminating the employer mandate altogether. For these very reasons, the politics of doing so would also be better than the politics of just fiddling around with the law’s definition of full-time work. The administration has already delayed the mandate and held off from applying it to firms with between 50 and 100 workers, and when the House voted last year to put off the implementation of the mandate, 35 Democrats joined Republicans to support the bill. Such a measure could plausibly get the handful of Senate Democrats it would need to survive a filibuster. It might even get signed by the president. Some Democrats might oppose it because it would expose them to the argument that they were relieving employers but not individuals of an Obamacare mandate, but that’s just more reason for Republicans to support it, since they’d want to repeal the individual mandate too and would benefit from a chance to press the Democrats on it. 

For reasons of both policy and politics, it seems to me that a repeal of the employer mandate makes much more sense than an adjustment of its definition of full-time work. And that adjustment, quite apart from the appeal of other measures, seems likely to be worse than doing nothing. 

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