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THE EMPLOYER MANDATE: EXAMINING THE 

DELAY AND ITS EFFECT ON WORKPLACES 

JOINT HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH, EMPLOYMENT, 

LABOR, AND PENSIONS 

AND THE

SUBCOMMITTEE WORKFORCE PROTECTIONS 

OF THE

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD IN WASHINGTON, DC, JULY 23, 2013 

Serial No. 113–28 

Printed for the use of the Committee on Education and the Workforce 

( 

Available via the World Wide Web: www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=education 

or 

Committee address: http://edworkforce.house.gov 

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(II) 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

JOHN KLINE, Minnesota, Chairman 

Thomas E. Petri, Wisconsin 

Howard P. ‘‘Buck’’ McKeon, California 

Joe Wilson, South Carolina 

Virginia Foxx, North Carolina 

Tom Price, Georgia 

Kenny Marchant, Texas 

Duncan Hunter, California 

David P. Roe, Tennessee 

Glenn Thompson, Pennsylvania 

Tim Walberg, Michigan 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Scott DesJarlais, Tennessee 

Todd Rokita, Indiana 

Larry Bucshon, Indiana 

Trey Gowdy, South Carolina 

Lou Barletta, Pennsylvania 

Martha Roby, Alabama 

Joseph J. Heck, Nevada 

Susan W. Brooks, Indiana 

Richard Hudson, North Carolina 

Luke Messer, Indiana 

George Miller, California, 

Senior Democratic Member 

Robert E. Andrews, New Jersey 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Rube ́n Hinojosa, Texas 

Carolyn McCarthy, New York 

John F. Tierney, Massachusetts 

Rush Holt, New Jersey 

Susan A. Davis, California 

Rau ́l M. Grijalva, Arizona 

Timothy H. Bishop, New York 

David Loebsack, Iowa 

Joe Courtney, Connecticut 

Marcia L. Fudge, Ohio 

Jared Polis, Colorado 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

John A. Yarmuth, Kentucky 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Juliane Sullivan, Staff Director 

Jody Calemine, Minority Staff Director 

SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS 

DAVID P. ROE, Tennessee, Chairman 

Joe Wilson, South Carolina 

Tom Price, Georgia 

Kenny Marchant, Texas 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Scott DesJarlais, Tennessee 

Larry Bucshon, Indiana 

Trey Gowdy, South Carolina 

Lou Barletta, Pennsylvania 

Martha Roby, Alabama 

Joseph J. Heck, Nevada 

Susan W. Brooks, Indiana 

Luke Messer, Indiana 

Robert E. Andrews, New Jersey, 

Ranking Member 

Rush Holt, New Jersey 

David Loebsack, Iowa 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Rube ́n Hinojosa, Texas 

John F. Tierney, Massachusetts 

Rau ́l M. Grijalva, Arizona 

Joe Courtney, Connecticut 

Jared Polis, Colorado 

John A. Yarmuth, Kentucky 

Frederica S. Wilson, Florida 

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(III) 

SUBCOMMITTEE ON WORKFORCE PROTECTIONS 

TIM WALBERG, Michigan, Chairman 

John Kline, Minnesota 

Tom Price, Georgia 

Duncan Hunter, California 

Scott DesJarlais, Tennessee 

Todd Rokita, Indiana 

Larry Bucshon, Indiana 

Richard Hudson, North Carolina 

Joe Courtney, Connecticut, 

Ranking Member 

Robert E. Andrews, New Jersey 

Timothy H. Bishop, New York 

Marcia L. Fudge, Ohio 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Suzanne Bonamici, Oregon 

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(V) 

C O N T E N T S 

Page 

Hearing held on July 23, 2013 ............................................................................... 1 

Statement of Members: 

Andrews, Hon. Robert R., Ranking Member, Subcommittee on Health, 

Employment, Labor, and Pensions .............................................................. 16 

Courtney, Hon. Joe, Ranking Member, Subcommittee on Workforce Protections ........................................................................................................... 17 

Roe, Hon. Phil, Chairman, Subcommittee on Health, Employment, Labor, 

and Pensions ................................................................................................. 2 

Prepared statement of ............................................................................... 3 

Walberg, Hon. Tim, Chairman, Subcommittee on Workforce Protections ... 4 

Prepared statement of ............................................................................... 15 

Statement of Witnesses: 

Holtz–Eakin,Douglas President, American Action Forum ............................ 65 

Prepared statement of ............................................................................... 67 

Pollack, Ron Executive Director, Families USA, ........................................... 58 

Prepared statement of ............................................................................... 60 

Richardson, Jamie T., Vice President, White Castle System, Inc. ............... 43 

Prepared statement of ............................................................................... 45 

Turner, Grace–Marie, President, Galen Institute ......................................... 31 

Prepared statement of ............................................................................... 34 

Additional Submissions: 

Mr. Courtney: 

Bureau of Labor Statistics, U.S. Department of Labor, News Release 101 

Letter dated July 16, 2013, from the Congressional Research Service 19 

Letter dated July 22, 2013, from DeVivo, John, Willimantic Waste 

Paper Co., Inc., ....................................................................................... 29 

Sturdevant, Matthew, The Harford Courant .......................................... 26 

The New York Times, Health Plan Cost for New Yorkers Set to 

Fall 50% .................................................................................................. 24 

Fudge, Hon. Marcia L., statement for the record 143 

Fudge, Hon. Marcia L., a Representative in Congress from the State 

of Ohio, questions submitted for the record to: 

Mr. Pollack ................................................................................................. 146 

Mr. Richardson .......................................................................................... 148 

Response to questions submitted: 

Mr. Pollack ................................................................................................. 150 

Mr. Richardson .......................................................................................... 153 

Chairman Walberg: 

Letter dated April 24, 2013, from the United Union of Roofers, 

Waterproofers and Allied Workers ....................................................... 9 

Seven House-Passed Bills President Obama Signed that Repeal or 

Defund Parts of His Health Care Law ................................................. 74 

Letter dated July 11, 2013, from International Brotherhood of Teamsters ........................................................................................................ 11 

The Wall Street Journal, Mort Zuckerman: A Jobless Recovery Is 

a Phony Recovery ................................................................................... 5 

Letter dated July 18, 2013,from the National Electrical Contractors 

Association .............................................................................................. 14 

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(1) 

THE EMPLOYER MANDATE: EXAMINING THE 

DELAY 

AND ITS EFFECT ON WORKPLACES 

Tuesday, July 23, 2013 

House of Representatives, 

Subcommittee on Health, Employment, Labor, 

and Pensions, 

joint with 

Subcommittee on Workforce Protections 

Committee on Education and the Workforce, 

Washington, D.C. 

The subcommittees met, pursuant to call, at 10:02 a.m., in Room 

2175, Rayburn House Office Building, Hon. David P. Roe [chairman 

of the Health, Employment, Labor, and Pensions subcommittee] 

presiding. 

Present from Health, Employment, Labor, and Pensions subcommittee: Representatives Roe, Wilson, Price, Salmon, Guthrie, 

DesJarlais, Roby, Heck, Brooks, Messer, Andrews, Courtney, and 

Polis. 

Present from Workforce Protections subcommittee: Representatives Walberg, Kline, Price, DesJarlais, Rokita, Hudson, Courtney, 

Andrews, Bonamici. 

Also present: Miller 

Staff present: Andrew Banducci, Professional Staff Member; 

Katherine Bathgate, Deputy Press Secretary; Owen Caine, Legislative Assistant; Molly Conway, Professional Staff Member; Ed 

Gilroy, Director of Workforce Policy; Benjamin Hoog, Senior Legislative Assistant; Nancy Locke, Chief Clerk; Brian Newell, Deputy 

Communications Director; Krisann Pearce, General Counsel; Molly 

McLaughlin Salmi, Deputy Director of Workforce Policy; Todd 

Spangler, Senior Health Policy Advisor; Alissa Strawcutter, Deputy 

Clerk; Joseph Wheeler, Professional Staff Member; Aaron Albright, 

Minority Communications Director for Labor; Tylease Alli, Minority Clerk/Intern and Fellow Coordinator; Daniel Foster, Minority 

Fellow, Labor; Eunice Ikene, Minority Staff Assistant; Brian Levin, 

Minority Deputy Press Secretary/New Media Coordinator; Leticia 

Mederos, Minority Senior Policy Advisor; Michele Varnhagen, Minority Chief Policy Advisor/Labor Policy Director; Michael Zola, Minority Deputy Staff Director; and Mark Zuckerman, Minority Senior Economic Advisor. 

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2 

Chairman ROE. A quorum being present, the joint hearing of the 

Subcommittee on Health, Employment, Labor, and Pensions and 

the Subcommittee on Workforce Protection will come to order. 

I would like to thank my colleague from Michigan, Tim Walberg, 

the chairman of the Subcommittee on Workforce Protections for 

agreeing to hold this joint hearing on the ‘‘Employer Mandate: Examining the Delay and Its Effect on the Workplace.’’ 

Today we will have opening statements from the chairman and 

ranking members of each subcommittee. With that, I will recognize 

myself for my opening statement. 

Good morning. First, let me welcome our colleagues from the 

Subcommittee on Workforce Protections. I would also like to thank 

our guests for being with us this morning. We have assembled an 

excellent panel of witnesses and look forward to your testimony. 

Three weeks ago the American people were joining friends and 

family to celebrate the Fourth of July holiday and hotdogs and fireworks. Little did they know the Obama administration was about 

to set off some fireworks of its own. 

Through a blog post on the Treasury Department’s Web site, the 

administration announced it would delay for 1 year enforcement of 

a vital piece of the recent health care law; the employer mandate. 

The delay provides workplaces a temporary reprieve from an onerous mandate; however, it does not alter the fact the law is fatally 

flawed. Regardless of when the employer mandate is implemented, 

it will destroy jobs and force Americans to accept part-time work 

when what they desperately need are full-time jobs. 

That is why the House will continue to demand permanent relief 

for all Americans. In the meantime, we will conduct oversight of 

the President’s decision and determine what it means for our nation’s workplace. To that end, there are a number of questions that 

need to be answered. 

For example, does the President have the authority to unilaterally delay enforcement of the law? It is well-recognized a President 

can decide not to enforce a law he believes is unconstitutional. Yet 

there is nothing in the President’s decision to suggest he believes 

the employer mandate is unconstitutional. 

Quite the opposite, President Obama signed the bill into law and 

his Justice Department defended the law before the Supreme 

Court. Can a President disregard the law because it is politically 

inconvenient or the federal bureaucracy is running behind schedule? 

We also have to ask who was involved in this decision and when 

it was ultimately made. In June, Health and Human Services Secretary, Kathleen Sebelius, testified before the full committee that 

implementation of the law was proceeding along just fine. 

The senior Democratic member of the committee responded to 

the secretary’s testimony by saying, ‘‘This is all good news and 

stands in stark contrast to the claims we have been hearing from 

the other side for 3 years. Now is not the time to reverse course.’’ 

Yet weeks later the administration did just that by reversing 

course on a critical piece of the President’s signature health care 

law. Was this a last minute decision with no coordination with 

other federal agencies? 

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3 

Or was this a carefully orchestrated effort developed long before 

the decision was announced? Is the administration planning to reverse course on other aspects of the law? 

We hoped that an administration official would provide answers 

to some of these questions. That is why Chairman Walberg and I 

invited Howard Shelanski, administrator for the Office of Management and Budget’s Office of Information and Regulatory Affairs, to 

testify. 

However, the OMB refused to make Mr. Shelanski available, 

stating his office was not involved in the employer mandate delay. 

It is troubling to learn an office in charge of overseeing federal regulatory policy wasn’t involved in this monumental decision. It simply raises new questions. Congress and the American people deserve answers. 

I look forward to our discussion, and I will recognize my distinguished colleague, Tim Walberg, the chairman of Workforce Protection Subcommittee for his opening remarks. 

Mr. Walberg? 

[The statement of Chairman Roe follows:] 

Prepared Statement of Hon. Phil Roe, Chairman, Subcommittee on Health, 

Employment, Labor, and Pensions 

Good morning. First let me welcome our colleagues from the Subcommittee on 

Workforce Protections. I would also like to thank our guests for being with us this 

morning. We have assembled an excellent panel of witnesses and we look forward 

to their testimony. 

Three weeks ago the American people were joining friends and family to celebrate 

the July Fourth holiday with hotdogs and fireworks. Little did they know the 

Obama administration was about to set off some fireworks of its own. Through a 

blog post on the Treasury Department’s website, the administration announced it 

would delay for one year enforcement of a vital piece of the recent health care law 

– the employer mandate. 

The delay provides workplaces a temporary reprieve from an onerous mandate; 

however, it does not alter the fact the law is fatally flawed. Regardless of when the 

employer mandate is implemented, it will destroy jobs and force Americans to accept 

part-time work when what they desperately need are full-time jobs. That is why the 

House will continue to demand permanent relief for all Americans. In the meantime, we will conduct oversight of the president’s decision and determine what it 

means for our nation’s workplace. Toward that end, there are a number of questions 

that need to be answered. 

For example, does the president have the authority to unilaterally delay enforcement of the law? It is well recognized a president can decide not to enforce a law 

he believes is unconstitutional. Yet there is nothing in the president’s decision to 

suggest he believes the employer mandate is unconstitutional. Quite the opposite, 

President Obama signed the bill into law and his Justice Department defended the 

law before the Supreme Court. Can a president disregard the law because it’s politically inconvenient or the federal bureaucracy is running behind schedule? 

We also have to ask who was involved in this decision and when it was ultimately 

made. In June Health and Human Services Secretary Kathleen Sebelius testified 

before the full committee that implementation of the law was proceeding along just 

fine. The senior Democratic member of the committee responded to the secretary’s 

testimony by saying, ‘‘This is all good news and stands in stark contrast to the 

claims we’ve been hearing from the other side for three years... Now is not the time 

to reverse course.’’ 

Yet weeks later the administration did just that by reversing course on a critical 

piece of the president’s signature health care law. Was this a last minute decision 

with no coordination with other federal agencies? Or was this a carefully orchestrated effort developed long before the decision was announced? Is the administration planning to ‘‘reverse course’’ on other aspects of the law? 

We hoped an administration official would provide answers to some of these questions. That is why Chairman Walberg and I invited Howard Shelanski, administrator for the Office of Management and Budget’s Office of Information and ReguCEWDOCROOM with DISTILLER

4 

latory Affairs, to testify. However, OMB refused to make Mr. Shelanski available, 

stating his office was not involved in the employer mandate delay. It is troubling 

to learn an office in charge of overseeing federal regulatory policy wasn’t involved 

in this monumental decision, and it simply raises new questions. Congress and the 

American people deserve answers. 

With that, I will now recognize my distinguished colleague Representative Andrews, the senior Democratic member of the subcommittee, for his opening remarks. 

Mr. WALBERG. Thank you, Mr. Chairman. 

Good morning. 

I appreciate the chairman for presiding over this joint hearing 

and express my appreciation to our witnesses for sharing their expertise and their time with us today. 

We are well-acquainted with the challenges surrounding the employer mandate, which forces businesses to provide government-approved health insurance or pay higher taxes. 

It seems with each passing day there are new reports of employers facing tough choices thanks to this particular provision in the 

health care law. The mandate applies to businesses with 50 or 

more full-time workers and defines such workers as employees who 

work 30 or more hours. 

Our two subcommittees have broad jurisdiction over policies governing employee and employer relations. I can’t think of another 

federal law that considers full-time work as 30 hours. 

In fact, the Fair Labor Standards Act established the 40-hour 

work week for the purposes of federal overtime requirements, and 

it has been a hallmark of America’s workplace for 75 years. Yet the 

health care law took a different approach, creating a perverse incentive for businesses to cut hours to avoid higher taxes. 

Today roughly 12 million Americans are unemployed; many in 

my district. More than 8 million individuals are working part-time 

hours but need a full-time job. According to Mort Zuckerman, editor in chief of the U.S. News and World Report, the President’s 

health care law shares some of the blame. 

In a recent op-ed in the Wall Street Journal, Zuckerman describes the growing reliance on part-time workers and writes this 

and I quote—‘‘Little wonder that earlier this month the Obama administration announced it is postponing the employer mandate 

until 2015, undoubtedly to see if the delay will encourage more fulltime hiring.’’ 

Mr. Zuckerman goes on to explain again, and I quote—‘‘But thousands of small businesses have been capping employment at 30 

hours and not hiring more than 50 full-timers, and the businesses 

are unlikely to suddenly change that approach just because they 

received a 12-month reprieve.’’ 

I ask unanimous consent to submit for the record the op-ed of 

Mort Zuckerman. 

[The information follows:] 

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8 

Chairman ROE. Without objection, so ordered. 

Mr. WALBERG. Thank you, Chairman Roe. 

The decision to delay enforcement of the employer mandate is 

the confirmation that the law is in fact, and I quote a senator, ‘‘A 

train wreck’’. Republicans have long-cited the failings in the law 

and our concerns have been dismissed as political rhetoric. 

Yet the more we learn about the law, the more problems we encounter and the bigger the opposition grows. Even union leaders, 

once strong supporters of the law, are beginning to realize it is 

hurting workers. 

In a statement released in April, the union, United Union of 

Roofers, Waterproofers, and Allied Workers called for ‘‘repeal or 

complete reform,’’ of President Obama’s health care law. 

According to union President Kinsey Robinson, and I quote—‘‘In 

the rush to achieve its passage, many of the act’s provisions were 

not fully conceived, resulting in unintended consequences that are 

inconsistent with the promise that those who were satisfied with 

their employer-sponsored coverage could keep it.’’ 

Mr. Chairman, I ask unanimous consent this statement be included in the hearing record. 

[The information follows:] 

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10 

Chairman ROE. Without objection. 

Mr. WALBERG. I thank the chairman. 

Just recently officials with the International Brotherhood of 

Teamsters, United Food and Commercial Workers, and the 

UNITE–HERE warned democrat leaders that without changes the 

law and I quote—‘‘Will shatter not only our hard-earned health 

benefits, but destroy the foundation of the 40-hour work week that 

is the backbone of the American middle class.’’ 

The union representatives continued, and I quote—‘‘We can no 

longer stand silent in the face of elements of the Affordable Care 

Act that will destroy the very health and well-being of our members along with millions of other hardworking Americans.’’ 

I ask unanimous consent this letter be inserted in the record. 

[The information follows:] 

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13 

Chairman ROE. Without objection, so ordered. 

Mr. WALBERG. Thank you. 

Finally, earlier this month the International Brotherhood of Electrical Workers and the National Electrical Contractors Association 

wrote to Chairman Kline, and they said this: ‘‘We cannot afford to 

sit on the sidelines as this law imposes increased benefit costs, 

fees, and new taxes on our plans. In addition, the health care law 

exempts all employers with less than 50 employees from offering 

health care coverage. This creates a vast competitive disadvantage 

for the 4,500 National Electrical Contractors Association contractors nationwide that responsibly provide coverage for their employees.’’ 

I again ask unanimous consent that this letter be inserted into 

the record. 

[The information follows:] 

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15 

Chairman ROE. Without objection. 

Mr. WALBERG. Thank you. 

I believe we can do better than misguided policies that destroy 

full-time jobs. As public opposition grows, I am hopeful we can repeal the law and begin developing solutions that will lower health 

care costs and provide new opportunities for America’s workers. 

Thank you again, Mr. Chairman, for holding this hearing, and I 

yield back. 

[The statement of Mr. Walberg follows:] 

Prepared Statement of Hon. Tim Walberg, Chairman, Subcommittee on 

Workforce Protections 

Good morning. I want to thank Chairman Roe for presiding over this joint hearing 

and express my appreciation to our witnesses for sharing their expertise with us 

today. 

We are well acquainted with the challenges surrounding the employer mandate, 

which forces businesses to provide government-approved health insurance or pay 

higher taxes. It seems with each passing day there are new reports of employers 

facing tough choices thanks to this particular provision in the health care law. The 

mandate applies to businesses with 50 or more full-time workers and defines such 

workers as employees who work 30 or more hours per work. 

Our two subcommittees have broad jurisdiction over policies governing employee 

and employer relations. I can’t think of another federal law that considers full-time 

work as 30 hours. In fact, the Fair Labor Standards Act established the 40-hour 

work week for the purposes of federal overtime requirements, and it has been a 

hallmark of America’s workplaces for 75 years. Yet the health care law took a different approach, creating a perverse incentive for businesses to cut hours to avoid 

higher taxes. 

Today roughly 12 million Americans are unemployed; more than 8 million individuals are working part-time hours but need a full-time job. According to Mort 

Zuckerman, editor in chief of U.S. News and World Report, the president’s health 

care law shares some of the blame. In a recent op-ed in the Wall Street Journal, 

Zuckerman describes the growing reliance on part-time workers and writes, ‘‘Little 

wonder that earlier this month the Obama administration announced it is postponing the employer mandate until 2015, undoubtedly to see if the delay will encourage more full-time hiring.’’ 

Mr. Zuckerman goes on to explain, ‘‘But thousands of small businesses have been 

capping employment at 30 hours and not hiring more than 50 full-timers, and the 

businesses are unlikely to suddenly change that approach just because they received 

a 12-month reprieve.’’ 

I ask unanimous consent to submit for the record the op-ed by Mort Zuckerman. 

[Chairman Roe: ‘‘Without objection.’’] 

Thank you, Chairman Roe. 

The decision to delay enforcement of the employer mandate is the confirmation 

that the law is in fact a ‘‘train wreck.’’ Republicans have long cited the failings in 

the law and our concerns have been dismissed as political rhetoric. Yet the more 

we learn about the law, the more problems we encounter and the bigger the opposition grows. Even union leaders – once strong supporters of the law – are beginning 

to realize it’s hurting workers. 

In a statement released in April, the United Union of Roofers, Waterproofers and 

Allied Workers called for ‘‘repeal or complete reform’’ of President Obama’s health 

care law. According to union President Kinsey Robinson, ‘‘In the rush to achieve its 

passage, many of the act’s provisions were not fully conceived, resulting in unintended consequences that are inconsistent with the promise that those who were 

satisfied with their employer sponsored coverage could keep it.’’ 

Mr. Chairman, I ask unanimous consent this statement be included in the hearing record. 

[Chairman Roe: ‘‘Without objection.’’] 

Thank you, Mr. Chairman. 

Just recently officials with the International Brotherhood of Teamsters, United 

Food and Commercial Workers, and UNITE–HERE warned Democratic leaders that 

without changes the law ‘‘will shatter not only our hard-earned health benefits, but 

destroy the foundation of the 40 hour work week that is the backbone of the American middle class.’’ The union representatives continued, ‘‘We can no longer stand 

silent in the face of elements of the Affordable Care Act that will destroy the very 

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16 

health and well-being of our members along with millions of other hardworking 

Americans.’’ 

I ask unanimous consent this letter be inserted into the record. 

[Chairman Roe: ‘‘Without objection.’’] 

Thank you, Chairman Roe. 

Finally, earlier this month the International Brotherhood of Electrical Workers 

and the National Electrical Contractors Association wrote to Chairman Kline, ‘‘We 

cannot afford to sit on the sidelines as this law imposes increased benefit costs, fees, 

and new taxes on our plans. In addition, [the health care law] exempts all employers with less than 50 employees from offering health care coverage. This creates a 

vast competitive disadvantage for the 4,500 NECA contractors nationwide that responsibly provide coverage for their employees.’’ 

I ask unanimous consent this letter be inserted into the record. 

[Chairman Roe: ‘‘Without objection.’’] 

Thank you, Mr. Chairman. 

I believe we can do better than misguided policies that destroy full-time jobs. As 

public opposition grows, I am hopeful we can repeal the law and begin developing 

solutions that will lower health care costs and provide new opportunities for America’s workers. Thank you again Mr. Chairman for holding this hearing. 

Chairman ROE. Thank you for yielding. 

I will now recognize Mr. Andrews, the ranking member, for his 

opening statement. 

Mr. ANDREWS. Thank you, Mr. Chairman and Chairman 

Walberg. 

I am pleased to be joined by my friend Joe Courtney who is the 

ranking Democrat on his subcommittee. 

I read the rest of Mr. Zuckerman’s article that just got put into 

the record, and I want to read a part of it. 

He talks about his concerns about the health care law and then 

he says, and I am quoting—‘‘What the country clearly needs are 

policies that will encourage the modernization of America’s capital 

stock where investment in modern production has plunged to the 

lowest level in decades. Policy should also be targeted to nourish 

high tech industries, which in turn will inspire the design and 

manufacture of products in the United States. This means preparing a skilled workforce, especially engineers, suitable to work in 

manufacturing and increasing the number of visas available for foreign graduate students.’’ 

This I assume is the predicate to the 39th attempt to repeal the 

health care law. So far, the majority is 0–38. Now there are some 

other issues confronting the country as Mr. Zuckerman talks about: 

skilled workers to make our economy grow. 

Last week, the majority brought to the House floor an education 

bill that was opposed by the U.S. Chamber of Commerce because 

the Chamber of Commerce said it basically watered down standards and did not encourage the kind of skills American students 

need. 

An immigration bill that is broadly supported by business, law 

enforcement, evangelicals, civil rights communities, many others 

across the country that won 68 votes in the United States Senate 

sits stagnant in this body. 

As of now, there is no plan to move any kind of immigration bill 

to the floor that would in Mr. Zuckerman’s words, ‘‘Increase the 

number of visas available to foreign graduate students.’’ 

So we are back again with half of an effort in which the majority 

criticizes what it does not like in the Affordable Care Act and that 

is what this morning I assume will be devoted to. 

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17 

It ought to be devoted to the second half of the effort though, and 

I am going to read from an article from Associated Press from last 

Friday. 

‘‘Three years after campaigning on a vow to repeal and replace 

President Obama’s health care law, House Republicans have yet to 

advance an alternative for the system they have voted more than 

three dozen times to abolish in whole or in part.’’ 

My friend from Michigan just said he hopes we can, quote— 

‘‘begin working’’ on an alternative. 

Officially the effort is quote—‘‘in progress,’’ and has been since 

January 19, 2011, according to gop.gov, a leadership-run Web site, 

but internal divisions, disagreement about political tactics, and the 

President’s 2012 reelection add up to uncertainty over whether Republicans will vote on a plan of their own before the 2014 elections, 

or if not by then, perhaps before the President leaves office more 

than 6 years after the original promise. 

Now, ladies and gentlemen, I think we have a choice today. We 

can engage in yet another session where people say what they do 

not like about the Affordable Care Act, and that has value, but 

even if you don’t like the Affordable Care Act, that only does half 

the job. 

And I would challenge each of the witnesses, if they in fact are 

opposed to the Affordable Care Act, and my friends on the Committee who are opposed to the act tell us what you would do instead. 

What is your plan? 

What is your plan to reduce health care costs? What is your plan 

to insure tens of millions of uninsured Americans? What is your 

plan to ensure greater consumer protections in the insurance industry? What is your plan to improve the quality of health care delivery in the United States of America? We would love to hear it. 

So I am sure we will—I read the written statements. They are 

all very good. I would certainly consent to them being put in the 

record in their entirety, and I would invite the witnesses—wing it. 

Tell us what you would do instead to make things better. 

I yield back. 

Chairman ROE. I thank the gentleman for yielding. 

I would now like to recognize Mr. Courtney for his opening statement. 

Mr. COURTNEY. Thank you, Chairman Roe. 

And thank you to the witnesses for being here this morning. 

Again, the chairman’s opening comments talked in kind of dark 

foreboding terms about whether or not President Obama overreached constitutionally in terms of the postponement of the employer mandate tax. 

I would encourage all of my colleagues—as well as anyone listening—it would be helpful to just maybe pick up the phone and call 

the Congressional Research Service and ask them whether or not 

the IRS has the authority to postpone statutorily defined programs 

and whether or not they have done it in recent years. 

And the fact of the matter is the answer will be the report which 

I am holding in my hand which shows that four times in just recent years, the last 2 years, the IRS has postponed implementation 

of IRS programs, some under the Bush administration, some under 

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the Obama administration, again, it is well-established law under 

the U.S. Code 7805, that the IRS has that authority. 

In this instance, after soliciting comments from employer groups 

all across the country, they made what I think was a commonsense 

decision which is that the definition of a 30-hour employee, seasonal employees was frankly still elusive and again, using well-established authority they delayed and postponed. 

And I would ask unanimous consent to have the CRS report admitted to the record. 

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Chairman ROE. Without objection. 

Mr. COURTNEY. Thank you, Mr. Chairman. 

In the meantime, events continue to chug along. The New York 

exchange announced last week and the headline in the New York 

Times is ‘‘Health plan costs for New Yorkers set to fall by 50 percent.’’ 

Somebody who was a small employer just a very short time ago, 

that would be news that we would greet with great celebration, and 

again, without a mandate, people can shop now with a coherent, 

understandable marketplace and make those decisions for themselves and their employees. 

In the Hartford Current, where I come from in the state of Connecticut, federal health officials’ rates on public exchanges are 

lower than expected, which again is the filings that we have in the 

state of Connecticut, again I would ask that these two articles also 

be admitted to the record with unanimous consent. 

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Chairman ROE. Without objection. 

Mr. COURTNEY. So the fact of the matter is, is that very shortly 

we are going to see rate filings which are below the Congressional 

Budget Office projections from 2010 in terms of the average cost of 

premiums. 

That should be our focus right now in terms of implementing and 

making sure that people are going to have the benefit of subsidies, 

small business tax credits, and a structured marketplace where private insurers—and by the way, we have a few of them in the state 

of Connecticut—are going to be able to sell their products in a 

much more user-friendly, small business-friendly fashion rather 

than the hieroglyphics that the existing marketplace presently calls 

for. 

And again, lastly, I have a letter from an employer in my district, Willimantic Waste with about 230 employees, which he submitted last night, actually applauding the President’s decision saying that, yes, they did listen. We are excited and looking forward 

to the opportunity to let the exchange unfold and make its prices 

available for both their part-time employees and people in the community of Windham, which is a distressed area of the state of Connecticut. 

And I would ask that Mr. DeVivo’s comments from the 

Willimantic Waste Paper Company, again, just supporting the 

President’s decision, also be entered into the record. 

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Chairman ROE. Without objection. 

Mr. COURTNEY. That is my last one. 

Lastly, I would just say, you know, we are now holding a hearing 

on measures that we voted on last week. We were promised by the 

new majority regular order when they took control of this Congress. Not only is this bill rushed to the Floor without hearing, we 

are now holding a hearing after the fact. There is not a high school 

student council that would follow this type of process. 

Again, I appreciate the witnesses for being here today, but the 

fact of the matter is Mr. Andrews said, we have the poison of sequester seeping through the U.S. economy. We have infrastructure 

needs that need to be addressed. We have a CR looming. We have 

a debt ceiling looming. Seventeen days left until October 1st of legislative days, and we are now holding a hearing on a bill that already passed. 

I mean, give me a break. 

Again, thank you for being here. I look forward to the exchange. 

We can do this until the cows come home, but the fact of the matter is the real issues that face and the real challenges that face the 

U.S. economy are not being addressed here today in this committee 

room or any other committee room in the House of Representatives, 

and frankly, the public deserves better. 

I yield back the balance of my time. 

Chairman ROE. I thank the gentleman for yielding. 

Pursuant to committee Rule 7(c), all members of both subcommittees will be permitted to submit written statements to be 

included in the permanent hearing record. 

And without objection, the hearing record will remain open for 

14 days to allow statements, questions for the record, and other extraneous material referenced during the hearing to be submitted in 

the official hearing record. 

It is now my privilege to introduce our witnesses. 

Our first is Ms. Grace Marie Turner, the president of the Galen 

Institute, a health care policy research organization located in Alexandria, Virginia. 

Welcome. 

Mr. Jamie Richardson is vice president of government and shareholder relations for the White Castle Systems, Inc. in Columbus, 

Ohio. 

Welcome. 

Mr. Ron Pollack is executive director of Families USA in Washington, D.C. 

Welcome, Mr. Pollack. 

And Dr. Douglas Holtz-Eakin is the president of the American 

Action Forum in Washington, D.C. 

Welcome. 

Before I recognize each of you to provide your testimony, let me 

briefly explain our lighting system. 

Y’all have been here many times. You will have 5 minutes to 

present your testimony. When you begin, the light in front of you 

will turn green. At 1 minute left, it will turn amber, and then when 

your time has expired, the light will turn red. At that point, I will 

ask you to wrap up your remarks as best as possible. 

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After everyone has testified, members will each have 5 minutes 

to answer questions and because this is a combined hearing, I am 

going to stick pretty closely to the 5 minutes. 

So first, I would like to thank you for being here, and I will start 

with Ms. Turner. 

STATEMENT OF MS. GRACE–MARIE TURNER, PRESIDENT, 

GALEN INSTITUTE, ALEXANDRIA, VA 

Ms. TURNER. Thank you, Chairman Roe. 

Thank you, Chairman Walberg. 

Thank you to Ranking Member Andrews, Ranking Member 

Courtney, and to Chairman Kline, and members of the committee 

for the opportunity to testify today. 

I am Grace-Marie Turner, president of the Galen Institute. We 

are a nonprofit research organization focusing on free-market ideas 

for health reform and have been working for 20 years on marketbased solutions, including a book called ‘‘Empowering Healthcare 

Consumers Through Tax Reform.’’ 

I would welcome the opportunity to talk with you about some of 

our ideas. 

Businesses large and small across America have been making 

painful decisions to lay off employees, cut workers’ hours, and 

make do with fewer workers than they really need. This is not 

what you would expect in a recovering economy. 

The clear distorting fact is the Affordable Care Act, especially the 

employer mandate. The decision by the administration to delay the 

reporting requirements for the mandate were certainly welcomed 

by business, but they also add to the questions and the concerns 

that both employees and employers have about the law. 

The statute does say that the mandate is to begin in 2014, not 

2014—2015, as the administration is now directed. Because of the 

House vote last Wednesday the house did pass legislation to give 

the administration legal authority to postpone the mandate; however the administration said in a puzzling statement of administration policy that the President would veto the legislation to delay 

the mandate should it reach his desk even though he had delayed 

the mandate administratively. No wonder businesses are confused. 

CMS administrator, Marilyn Tavenner—I do think it is still relevant to discuss this because businesses are impacted, plans had 

been made in preparation for the 2014 trigger date, and CMS administrator, Marilyn Tavenner was asked—testified last week—if 

she was consulted, and she said she was not. 

You did invite Howard Shelanski from the Office of Management 

and Budget who said their office is not involved, and therefore, 

wouldn’t testify. 

And the commerce committee of Michael Burgess questioned the 

treasury official last week to ask him about the timeline of the decision. The official was not able to provide the date of the decision, 

who made it, and whether that person was in the Treasury Department or the White House. 

Certainly a decision with this significance and this much impact 

on both the law and other aspects of the law as well as businesses 

needs to have been reviewed and vetted thoroughly. 

Employers are more confused than ever. 

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A recent survey by the U.S. Chamber of Commerce found that 

71 percent of the small businesses say the health law will make it 

harder for them to grow. An earlier Gallup poll found that 41 percent of the small businesses had frozen hiring because of the law. 

One in five said that they had already reduced the number of hours 

for their employees ‘‘as a specific result of the Affordable Care Act.’’ 

While most employers want to provide health insurance, not all 

can and still keep their prices competitive. For companies with 

very tight profit margins, the mandate can send their bottom lines 

from black to read. 

Some critics have argued that if all businesses were forced to 

provide health insurances and raise prices, they would not lose customers because everybody would be operating on the same ground 

rules, but customers are smarter than that. They will postpone or 

delay purchases. They will substitute and that business would simply vanish. 

A 1-year delay in the reporting requirements for the employer 

mandate is largely irrelevant some say, but offering insurance isn’t 

the same as people accepting insurance. 

Our proponents of the mandate and the law say that because 97 

percent of business, large companies that are subject to the mandate, already provide health insurance that it really doesn’t matter 

because it is not going to change their behavior. 

But a study by Duke University professor Chris Conover has 

found that 46 percent of the uninsured actually work for these 

large firms, the great majority of which are due to provide health 

insurance. So this delay and the mandate really do have a significant effect. 

And while the law tried to lock in employer coverage, it may very 

well have the opposite effect of incentivizing employers to drop it 

instead. They just have another year to make their plans. 

Further, the health law is redefining a full-time work week as 30 

hours, rather than 40, and we heard as Chairman Walberg said 

even our organized labor is very upset about this redefinition. 

Many small businesses are already cutting workers’ hours back 

to 25 hours because they know with some slack in shifts, that they 

could get to the 30 hours. If you were to—there are some proponents of changing the definition, amending the law to say it is 

a 40-hour work week. 

I recommend that you not do this because employers will then 

say, well let’s just have this; they will say well, we have to cut 

hours to 35 hours. You are going to continue to chase this. The only 

solution is repealing this law and repealing particularly the mandate. 

The risk complexities and delays and confusion surrounding Affordable Care Act strongly indicate that the only responsible path 

is to delay implementation of the exchanges and related subsidies 

especially until taxpayers can be assured that this money is being 

spent wisely. 

And one final thought; Congress could authorize funds to help 

states develop or strengthen high risk pools so people with pre-existing conditions who are waiting for the exchange coverage to 

begin on January 1 could get coverage immediately. 

Thank you, Mr. Chairman, for the opportunity to testify. 

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Chairman ROE. Thank you, Ms. Turner. 

Mr. Richardson? 

STATEMENT OF MR. JAMIE T. RICHARDSON, VICE PRESIDENT, 

WHITE CASTLE SYSTEM, INC., COLUMBUS, OH 

Mr. RICHARDSON. Thank you, Chairman Roe and Walberg, Ranking Members Andrews and Courtney, and members of the Subcommittees on Health, Education, Labor, and Pensions and Workforce Protections of the House Education and Workforce Committee. Thank you for the chance to testify regarding employer 

mandate and the impact a recent announcement of transition relief 

on employers and employees 

My name is Jamie Richardson. I serve as vice president of White 

Castle, which means I get to sell hamburgers for a living. It is an 

honor to be here and share our perspective on behalf of our company and the National Restaurant Association. 

White Castle is the taste America craves. We believe good business, great food, and responsible citizenship should all go together. 

At White Castle, we first opened our doors in 1921, and to this day, 

we are a family-owned, privately-held company. 

The majority of our nearly 10,000 team members work in our 406 

restaurants across 12 states. At White Castle, we put people first. 

We have offered a health insurance program and a benefit since 

1924. 

Our benefits package is one of the main reasons so many of our 

colleagues remain with the company for so long; 27 percent of our 

team members has been with us 10 years or more. More than one 

in four have been with us 10 years or more. 

We are proud of that fact, but we are humbled by their loyalty, 

and we are committed to continuing to make White Castle a rewarding place to be. 

As restaurants throughout the country implement new requirements of the health care law, we face unprecedented challenges 

that must be addressed. We are committed to addressing those 

challenges, and to do that effectively, we need Congress’ help. 

Allow me to be frank. 

First, the definition of full-time employee in this law does not reflect our workforce needs or our employees’ desire for flexible work 

schedules. 

Second, the calculation to determine whether a business is a 

large or small employer is unnecessarily complicated and especially 

burdensome for small businesses. 

Third, automatic enrollment must be eliminated to avoid confusion and potential financial hardship for employees and an increased burden for employers. 

I would like to tell you today that White Castle’s growth has continued uninterrupted. I would like to tell you we have continued to 

open more restaurants in more neighborhoods providing more jobs 

and serving more customers. 

I would like to tell you that, but I can’t. In fact, White Castle’s 

growth has halted. 

Last year when I testified before the House Oversight and Government Reform Committee, we had 408 White Castle restaurants. 

Today, we have 406. 

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In the 5 years prior to the health care law, we were opening an 

average of eight new White Castle restaurants each year. In 2013, 

we plan to open just two. 

While other factors have slowed our growth, it is the mounting 

uncertainty surrounding the health care law that has brought us 

to a standstill. 

In addition to the employer-shared responsibility section of the 

law, the employer reporting requirements are key for employers. 

The two requirements make up a large part of what employers 

must do to comply with the law. 

The administration’s July 2 announcement and July 9 IRS notice 

2013–45 provides transition relief and voluntary compliance in 

2014 for the employer reporting requirements under Tax Code Section 6055 and 6056, and hence the employer shared responsibility 

requirements employer mandate under Tax Code Section 4980H. 

As early as October 2011, the National Restaurant Association, 

as part of the Employer for Flexibility and Healthcare Coalition 

submitted comments requesting transition relief. 

Proposed rules on the employer mandate were published in the 

Federal Register on January 2, 2013, but employers have been 

waiting for rules or guidance on employer reporting. 

We welcome this transition relief to understand and comply with 

the rules on reporting and how it interacts with the mandate and 

employer mandate rules. 

Employers need rules with enough lead time to set up systems 

that will track data on each full-time employee and their dependents and then report this data to the IRS annually. 

We are eager to see the proposed rule that the administration’s 

stated it plans to issue later this summer. 

Of particular concern are the flow of information and the timing 

of reporting and communication employers must make to multiple 

levels and layers of government. Streamlining employer reporting 

will help simplify the process. 

Restaurants and other employers have advocated for a common 

sense, single, annual reporting process by employers to the Treasury Department each January 31. 

That would provide perspective general plan information and 

wage information to the affordability Safe Harbors as well as retrospective reporting as required by Tax Code Section 6056 on individual full-time employees and their dependents. 

To conclude, while we appreciate the transition relief, restaurants across America still face challenges only Congress can address; the definition of a full-time employee, the determination of 

who is an applicable large employer under the law, and the elimination of the automatic enrollment provision. 

We are both proud and grateful for the responsibility of serving 

America’s communities, creating jobs, boosting the economy, and 

serving our customers. We are committed to working with Congress 

to find solutions that foster growth and truly benefit the communities we serve. 

Thank you. 

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Chairman ROE. Thank you, Mr. Richardson. 

Mr. Pollack? 

STATEMENT OF MR. RON POLLACK, EXECUTIVE DIRECTOR, 

FAMILIES USA, WASHINGTON, DC 

Mr. POLLACK. Chairman Roe, Walberg, Ranking Members Andrews and Courtney, Chairman Kline, Ranking Member Miller, in 

my written testimony I covered three topics. 

One, the numerous ways the Affordable Care Act is already providing significant benefits and protections for many millions of 

Americans. 

Two, the additional and even more significant ways that the Affordable Care Act will provide meaningful help for an increasing 

number of Americans. 

And number three, how the 1-year delay of the employer mandate is much ado about very little. 

I will be happy to respond during the Q&A session about the sky 

is falling rhetoric about how the Affordable Care Act impacts on 

jobs. 

With respect for the committee’s time, I will not repeat the written testimony that was submitted to the committee in advance and 

suffice, it will be in the record. 

Instead, I hope it will be helpful to offer a frank perspective 

about the current context of the continuing debate about the Affordable Care Act. 

A number of months ago, after the November elections, Speaker 

Boehner appropriately said that the Affordable Care Act is the law 

of the land. However, both before and since that time, opponents 

of the Affordable Care Act have demonstrated an obsession about 

obstructing the law of the land. 

This obsession with obstruction has taken at least eight forms 

and they are often absurd, in some instances ironic, and all are 

contrary to the best interests of families across America. 

The first and most farcical manifestation of this obsession is the 

repetitive, perhaps unprecedented and certainly futile series of repeal votes here in the House. By most counts, it is now 39 such 

votes. 

Second, people across America have been subjected to an incessant barrage of false charges about Obamacare. Most obvious and 

pernicious has been the claim that the legislation creates death 

panels. Other examples abound. 

Third, opponents of the Affordable Care Act have pushed states 

to refuse to set up new health insurance marketplaces. Most ironically, it has been these efforts that have caused the federal government to set up the marketplaces instead, something that one might 

think is anathema to conservative thinking. 

Fourth, some Obamacare opponents have filed two federal lawsuits to prevent middle class and moderate income families in 

states with federal marketplaces from receiving tax credit premium 

subsidies. Here again, irony is rampant. 

Even though they are unlikely to succeed, if they did succeed, it 

would be taxpayers in the most conservative states that would be 

harmfully affected. 

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Fifth, Obamacare opponents are attempting to prevent states 

from implementing the Medicaid expansion. Tragically, in the 

states that have not yet committed to the expansion, many millions 

of those in greatest need in America will continue to be uninsured. 

Thankfully, nine conservative Republican governors have said 

this is helpful for their states. 

Sixth, the Senate’s Republican leaders sent letters to the commissioners of national sports leagues, the NFL, NBA, Major League 

Baseball, urging them to refrain from informing their fans about 

new opportunities under the Affordable Care Act. 

Seventh, state legislative opponents of Obamacare have promoted and in a number of instances adopted legislation designed 

to impeded church and social service agencies from helping Americans learn about the benefits of the Affordable Care Act. 

These new laws are absurdly designed to force such public spirited groups to secure licenses before they can go about their public 

education efforts. 

And eighth, the conservative group, FreedomWorks, is campaigning to get young adults to opt out of coverage with online 

video training and educational manuals to spread the word on college campuses. The campaign is called ‘‘Burn Your Obamacare 

Draft Card.’’ 

These efforts demonstrate a clear and perhaps unprecedented obsession with obstructing the law of the land, and they may reflect 

desperation because the clock is ticking. 

Americans will soon receive significant new benefits and protections and will understand how the Affordable Care Act can improve 

their lives as the first coverage enrollment periods begin in October 

and benefits become available in January. 

This obsession with obstruction is unworthy of America’s families 

across the nation. Hopefully, in the not-too-distant future, this obsession with obstruction will end. 

Moving forward, since no legislation, including the Affordable 

Care Act, is perfect, it will be far more productive if the law’s many 

proponents and opponents work together and constructively to improve the law and help to strengthen America’s health care system. 

We look forward to participating in that process. 

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Chairman ROE. Thank you, Mr. Pollack. 

Dr. Holtz-Eakin? 

STATEMENT OF MR. DOUGLAS HOLTZ–EAKIN, PRESIDENT, 

AMERICAN ACTION FORUM, WASHINGTON, DC 

Mr. HOLTZ-EAKIN. Thank you Chairman Roe and Walberg, Ranking Members Andrews and Courtney, and Chairman Kline, Ranking Member Miller, for the chance to be here today. It is a great 

privilege. 

Clearly, the employer mandate is going to have strong incentive 

effects on growth and employment, the mix of full and part-time, 

and the kind of compensation workers will receive. 

It has been well-recognized that for example, in large firms, 

those above 50, the best outcome one can get is zero, and that 

would be a firm that is already offering coverage to everyone and 

it satisfies the requirements of the law, and the law has no impact; 

it is redundant. 

Past that and as Grace-Marie Turner pointed out, about 46 percent of the uninsured in these large firms, there will be impacts on 

them. They will have to cover health insurance costs. Those resources will compete with the chance to hire or otherwise expand 

payrolls. In small firms, there is a sharp cliff at 50 employees 

where you would expect growth to be impacted. 

Below that, the very tax credit that is meant to ameliorate the 

impact of the mandate in fact has quite perverse growth incentives, 

penalizing those firms that grow above 25 employees, penalizing 

those firms that pay higher average wages. All of this is a strong 

anti-growth impact from the mandate itself. This takes place in the context of the other taxes, roughly $1 trillion over the next 10 years and regulations embodied in the Affordable Care Act, it is hard to describe this as a pro-job growth piece 

of legislation. 

We have heard a lot of testimony and the incentives are quite 

clear under the mandate to move to part-time employees and the 

data are quite clear that we are seeing an increasing trend toward 

part-time employment in the United States. All that remains is for 

scientific studies to link the two closer together. It is conjecture at 

this point, but it is quite strongly persuasive. 

The third impact is on the kinds of compensation that employees 

will get. Obviously, a requirement to provide health insurance 

moves the mix toward insurance and away from cash wages at a 

time when we have seen a stagnation in the cash wages of American workers. Median family incomes have declined during this recovery for example and this will impede the growth even further. 

This has the strongest impact on low-wage workers. Imagine a 

minimum-wage worker whose employer is required to cover health 

insurance. You can’t lower the cash wages of that individual. Instead, there is an incentive to no longer employ them or move them 

to part-time employment. It is bad news for the worker. 

Or, and this is one of the most striking impacts, the arithmetic 

is quite compelling that for workers up to about 300 percent of the 

poverty line, it is in the combined interest of the employee and the 

employer to arrange for that individual to get their insurance in 

the exchanges and pick up the federal subsidies. 

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As result, one would expect that to the extent firms and workers 

pursue this, we would see churn not only in their insurance coverage, but in the provider networks underneath that; nothing that 

anyone describes as a desirable outcome from a health policy point 

of view. 

These incentive effects have been in the law from the first drafts 

and have been quite broadly discussed. We are now starting to see 

evidence of these impacts. The most strong evidence that we have 

to date are the polls, some of which are included in my written testimony, where employers are reporting that they have in fact 

pulled back on their hiring, moved to part-time workers, are worried about the costs of the health care law, and that this is impeding their business operations. 

The decision to waive enforcement for a year doesn’t change any 

of those basic long run incentives, and I think it is the strong reading of the economics literature that permanent incentives have 

much stronger impacts than temporary ones. 

We have been through this debate in the context of stimulus 

where one-time policies often don’t have much bang for the economic buck and we will see that again in this context. 

To the extent that there will be an impact, the one thing it does 

do is for those employers who have decided to get out of the business of providing health insurance, they have a 1-year firesale on 

the chance to do that. There is no penalty. They can accelerate 

their movement of employees into the exchanges. 

This would raise the taxpayer cost clearly more quickly than it 

would otherwise, and given the sort of knock-on effects of this lack 

of enforcement on the ability to collect information about the eligibility for subsidies, on the size of subsidies, when we expect the 

taxpayer costs to be larger than it need be, and there is also some 

concern that it would impact the ability to enforce the individual 

mandate. The lack of complete reporting will be difficult in 2014. 

So this is a—the mandate has been a contentious issue from the 

beginning. The waiver is again, just bad news. There is no good 

news here from the point of view of employees and employers trying to grow and provide the compensation packages that they want. 

Thank you. 

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Chairman ROE. Thank you, Dr. Holtz-Eakin. 

Mr. Walberg? 

Mr. WALBERG. Thank you, Mr. Chairman. 

If I might, the distinguished ranking member mentioned the efforts in the House to repeal Obamacare and also to address some 

of the concerns especially the closing concerns of Mr. Pollack. 

I would like unanimous consent to insert into the record a list 

of seven House-passed bills President Obama signed into law that 

repeal or defund parts of Obamacare. 

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Chairman ROE. Without objection. 

Mr. WALBERG. Dr. Holtz-Eakin, 75 years ago, the Fair Labor 

Standards Act was established and it established a 40-hour work 

week for purposes of federal overtime requirements. The President’s health care law is the first and only federal law that considers a full-time employee is one that works 30 hours a week or 

more. 

I would like, if you could, to expand your thoughts as to how this 

provision as well as the rest of the employer mandate act as a disincentive for hiring employees in positions over 30 hours a week. 

Mr. HOLTZ-EAKIN. Well, the arithmetic is quite clear. You will 

have to incur substantial health care costs if you have full-time employees. 

I promise you that employers think about this. It is absolutely 

in their fiduciary obligations to look at both the continuation of coverage and the continuation of full-time employment. 

I did it as an employer at a think tank. You have to look at this. 

So I think there is a concern. 

It also makes it more complicated. You are now complying with 

two sets of regulatory standards, one at 40, one at 30. It makes life 

harder for small businesses, many whom are not expert in compliance with federal regulations. 

So I think, you know, the notion that this is going to be a good 

news story either for the total number of employees or the number 

of full-time employees is it just hard to make. 

Mr. WALBERG. Mr. Richardson, if your employees like their 

health care coverage, will they be able to keep it? You have had 

coverage since 1924. 

Mr. RICHARDSON. We have had coverage since 1924, and our fulltime team members are eligible and 80 percent of those team members take the coverage. 

The biggest challenge for us right now is this new definition of 

full-time. You know, we chose to use 35 hours as a full-time definition. 

When we look at what this will translate to, our highest hope is 

to allow everyone who has benefited from that insurance to be able 

to hold onto it, but when we look to the future, we can’t foresee 

a future where we are able to hire new hires as full-time employees. 

We think transparency equals trust and so our focus is going to 

be on for those who have the insurance, doing everything we can 

within our power to make sure we are still providing that, but that 

for new hires, we tell them coming in, we are not going to be able 

to provide that because we are hiring you as part-time, which we 

would schedule it around 25 hours a week. 

Mr. WALBERG. Okay. 

Transparency, you mean trust, I must chastise you for wearing 

that tie that is causing a craving for sliders in me right now with 

hundreds of White Castle sliders on that tie, but I will forgive you. 

Mr. RICHARDSON. We were aiming for subtle, but I am glad you 

picked up on it. 

Mr. WALBERG. I picked up on it. 

Mr. Richardson, for many months now the top concern that employers and employees throughout Michigan tell me about is that 

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employer mandates, 30 hours equivalency for full-time employment 

is leading to less opportunity, less take-home pay, and losses of 

health insurance. 

Last month I had the opportunity to question the Secretary of 

Health and Human Services, Secretary Sebelius, as to the devastating economic effect of this new requirement. 

She told me and this committee that since the benefits didn’t 

start until January 1 of 2014, she was, and I quote—‘‘Not at all 

confident that some of the speculation of what may or may not happen will actually happen.’’ 

And so, Mr. Richardson, are the loss of hours and health benefits 

caused by this law just speculation in the restaurant industry? 

Mr. RICHARDSON. In restaurants across America, we are concerned. We were thankful for some temporary relief, but it is beyond concern. It is extreme anxiety because we know the costs that 

are coming are real. 

Just the change in the definition of full-time for White Castle 

alone, and we literally sat in meetings the last week in June talking about this before the July 2 announcement, but when we look 

at the band of team members we have between 30 and 35 hours 

and calculate the added cost, we are looking at a 35 percent increase in our cost for health insurance to be able to provide a greater number— 

Mr. WALBERG. So this has a huge effect on your planning, as 

well, in moving forward? 

Mr. RICHARDSON. Yes. We invest $30 million a year in our health insurance program and it would be north of $8 million or $9 million more per year. 

Mr. WALBERG. And you have already said it is cutting back on 

the number of new stores that you plan to put in place. 

Mr. RICHARDSON. It stopped us in our tracks when it comes to 

growth and expansion. 

Mr. WALBERG. I thank each of the witnesses and I see my time 

is ending, so I will yield back. 

Chairman ROE. Thank the gentleman. 

Yield to Mr. Andrews? 

Mr. ANDREWS. Thank you. 

I thank the witnesses. I want to talk about a family where you have two working adults and they make $45,000 a year. And one 

of the adults works for a business with 100 employees; she is one 

of 100 employees at her business. 

The family doesn’t have health insurance—they have a couple of 

children—because neither of the employers offer health insurance 

that the two adults work for. Does everyone on the panel agree it 

should be a goal of our national policy to get that family health insurance? Anybody disagree with that? 

Okay. 

Ms. Galen—Ms. Turner, excuse me, how do you think we should 

do that? How should we get that family covered? 

Ms. TURNER. The most important thing is to make that insurance affordable for families. As I said in my testimony, the chances 

that one or the other of those parents, those working adults, may 

have health insurance offered to them in the workplace; it is considerable. 

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Mr. ANDREWS. Let’s talk—in my state, that family would pay at 

least $15,000 for a decent policy. So they have an income of 

$45,000 gross. How do we get them the policy? What do you think 

we should do? 

Ms. TURNER. I think that we need to reform the tax treatment 

of health insurance significantly to provide a greater incentive for 

people to purchase— 

Mr. ANDREWS. What does that mean? You wrote an article in 

2009 that talked about I guess a credit for that family of $5,700. 

Do I have that right? 

Ms. TURNER. That was one of the proposals at the time. I think 

if you were to provide a refundable— 

Mr. ANDREWS. Okay. You did that. Let’s go with that proposal. 

Let’s go with that for a second. 

That would cover $5,700 of the cost, but what about the other 

$10,000 or so? Where should that come from? 

Ms. TURNER. I believe, first of all that health insurance will become much more affordable if people were purchasing the policies 

themselves, if the policy were portable, if they were able to buy a 

longer-term contract with that health insurance, and the family 

was able to make decisions about what they wanted as far as 

deductibles, expansion of networks, et cetera. 

Mr. ANDREWS. Of course, the reality is that 95 percent of Americans live in a health insurance market today where the top two 

companies have at least 85 percent or 90 percent of the market 

share, so the kind of competition that would drive that down 

doesn’t really exist. 

How would you induce the competition among insurers to drive 

that cost down? 

Ms. TURNER. If people were not confined to the health insurance 

policies in their states, they would have a broader range of coverage if they were able to purchase coverage across state lines— 

Mr. ANDREWS. Of course, under the Affordable Care Act, the exchanges permit any insurer who wants to come into a state exchange and compete to do so. So doesn’t the Affordable Care Act 

solve that problem? 

Ms. TURNER. Only with the limited band of bronze, silver, gold, 

platinum policies. People need a much broader range of policies to 

find policies that are affordable to them— 

Mr. ANDREWS. Go back to your $5,700 proposal. Where would the 

money come from to pay for that? I also read that you have a 

$5,000 debit card for low income people, whatever that means. 

Where would the money come from to pay for this tax credit for 

people? 

Ms. TURNER. We currently spend—current tax subsidy for health 

insurance for people that get health insurance at the workplace is 

about 250 billion a year and it is very regressive. It goes disproportionately to people with higher incomes and with better paying 

jobs— 

Mr. ANDREWS. So you would reallocate that. 

Ms. TURNER. I would reallocate that so that more of that money 

would go to people— 

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Mr. ANDREWS.—Mr. Richardson’s company deducts the health insurance costs for himself and his fellow employees, you would do 

away with that deduction? 

Ms. TURNER. I would not change the employer deduction for 

health insurance. If they want to continue to offer it, it is a form 

of compensation for employees. The employee exclusion however 

could be portable— 

Mr. ANDREWS. So you would keep the employer deduction, so he 

gets to continue to do that, but the employee exclusion would be 

done away with. 

Ms. TURNER. Yes. Would be replaced. 

Mr. ANDREWS. So if Mr. Richardson’s employer still provided him 

with health care, you would tax him on the value of that payment 

that they made? 

Ms. TURNER. We would readjust the tax system— 

Mr. ANDREWS. You would raise his taxes, basically. 

Ms. TURNER. He gets his $5,700 tax credit rather than a deduction which this family of making $45,000 a year would get a very 

small portion— 

Mr. ANDREWS. Do you think this could be paid for all within the 

realm of the—you said $300 billion not $250 billion in your article—all within the realm of the $300 billion expenditure a day? 

You wouldn’t have to go beyond that? 

Ms. TURNER. Absolutely. I don’t think the people who are making 

$250,000 a year, half a million dollars a year need to get the most 

generous tax benefits for health insurance or the exclusion. 

Mr. ANDREWS. So you would raise their taxes to pay for them. 

Ms. TURNER. They will do just fine for themselves. This family 

making $45,000 a year needs help and they need more help than 

they are getting now and will get from the Affordable Care Act. 

Mr. ANDREWS. It is kind of interesting that your proposal is to 

provide tax subsidies to people paid for by a tax on higher income 

people which is of course what the Affordable Care Act did. 

I yield back the balance of my time. 

Chairman ROE. I think the gentleman for yielding. 

Dr. DesJarlais? 

Mr. DESJARLAIS. Thank you, Mr. Chairman. 

Ms. Turner, we will continue with you. What do you believe is 

the biggest burden for employers in Obamacare? 

Ms. TURNER. Oh my goodness, that is a big list. Obviously, the 

one at the table is this employer mandate because it is so distorting. You know, really causing employers it have to redesign 

their workforces. 

I was looking at some Labor Department numbers, Dr. 

DesJarlais, that showed that last year there were six full-time 

workers hired for every one part-time employee. 

This year, there is a one full-time employee for every four parttime employees. It has absolutely flipped. Employers already are 

being forced to make decisions. It is hugely distorting, but I would 

say that they would tell us what they told us all along. The biggest 

issue is cost. 

Mr. DESJARLAIS. What would you suggest that we as members 

of Congress can do to help alleviate this? 

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Ms. TURNER. The first thing is to not only convince the Senate 

to delay the employer mandate to buy us time and the individual 

mandate, I believe they are tied together, to buy us time to really 

rethink and get to a system that would provide health insurance 

for this family making $45,000 a year in a way that allows them 

to choose the kind of policy they want, allow that policy to be portable, not have them be tied to the workplace to get that job, to get 

that policy. 

Mr. DESJARLAIS. Your testimony addressed the recent comments 

made by union leaders stating that Obamacare will destroy the 40- 

hour work week and harm the middle class. 

Can you please explain why the unions are concerned about the 

law and the effects of Obamacare has on their members? 

Ms. TURNER. You know, the unions seem to have believed that 

the main benefit of the law would have been to not only provide 

health insurance, universal coverage, I believe that is really an important goal, but to also allow people to have health insurance that 

as I said, don’t have it now. 

But they are—they didn’t focus on the issue of how this is going 

to affect multiple employee welfare associations where they provide 

health insurance for clusters of smaller companies and they are not 

going to get the—they have no eligibility for subsidies as others do 

who go to the exchanges directly. 

They believe that this will make their employees less competitive 

than employers who are not unionized who can go to these exchanges for their coverage. 

So they have seen and they have also seen the huge cost of these 

mandates and this coverage and they are saying, wait a minute, 

nobody told us about this. 

Mr. DESJARLAIS. Thank you. 

Mr. Holtz-Eakin, has anything changed for employees or rather 

employers in light of the administration’s recent decision to delay 

the employer mandate for 1 year? 

Mr. HOLTZ-EAKIN. Nothing fundamental. They face the same 

long run incentives that they had prior to the waiver. As I mentioned in my opening remarks, the only thing that has really happened is there is an incentive to move more quickly if you are 

choosing to get out of the business of providing employer-sponsored 

insurance and that, I think, is a real concern. 

Mr. DESJARLAIS. Thank you. 

Mr. Richardson, as vice president for government and shareholder relations for a multistate business, can you speak to anything in the new law that will offset cost and reduce coverage expenses for your company? 

Mr. RICHARDSON. For us, as we have looked at the law, we see 

and predict big cost increases and that is where our anxiety has 

been. I think in some ways if this were a rock opera, some might 

think it is ‘‘Stairway to Heaven.’’ For a lot of us in the employer 

community, it feels more like ‘‘Highway to Hades.’’ 

But maybe now it is time to take a sad song and make it better 

because we think this time is giving us a chance to fix the parts 

of the law that really are unworkable and are really going to make 

it difficult for us to continue to employ people and create jobs. So 

that is where we are hopeful. 

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Mr. DESJARLAIS. All right. From Led Zeppelin to AC/DC and we 

have the Beatles. Very good. 

What would you say is the biggest impediment to providing lowcost health coverage for your employees? 

Mr. RICHARDSON. For us, the biggest impediment is the impending law and just trying to understand what it means. As a company that fights each day for 10,000 employees, we have invested 

in health care since 1924. So it is a commitment we have made and 

make and we have allowed that to be a big focus for us because 

we enjoy the flexibility it provides us in terms of having that dialogue with our team members. So being the mandate part is difficult. 

Mr. DESJARLAIS. Okay, thank you. 

My time is about to expire. 

Thank you all for your comments. 

I yield back. 

Chairman ROE. Thank the gentleman for yielding. 

Mr. Courtney? 

Mr. COURTNEY. Thank you, Mr. Chairman. 

Mr. Pollack, in your litany of benefits in your written testimony 

regarding the Affordable Care Act, again, you listed, in my opinion, 

an impressive array of benefits for young Americans, 3 million who 

now have coverage because of the age 26 modification, which again 

would have been obliterated in one of the iterations of the Repeal 

Obamacare Act; the seniors who are getting help from the donuthole, which again is this gaping, 100 percent deductible created in 

the Medicare act a number of years ago; the medical-loss ratio 

measure. 

Again, my hometown of Vernon, Connecticut received $170,000 

refund for its health plan, for its town employees that actually 

helped fill a budget hole in their Board of Education account. 

So again, there are many, many benefits which have already occurred since 2010, but I would like to again, go back to Ms. Turner’s comment that in terms of employers, the biggest issue is obviously cost of health care. 

And since 2010, I mean, isn’t it a fact that we are actually seeing 

an historic lower rate of growth in terms of the health care system 

as a whole, but in particular in terms of the Medicare system? 

Mr. POLLACK. Mr. Courtney, I was sitting somewhat bemused by 

some of the comments about, in effect, the sky is falling with respect to employment opportunities as a result of the Affordable 

Care Act. 

The data says something very differently. If you look at the Bureau of Labor Statistics, since March 2010, when the Affordable 

Care Act passed, over 90 percent of the gains in employment are 

due to additional full-time positions, not part-time positions. 

Over the past 12 months, ending June of 2013, 116,000 additional workers per month were in full-time jobs while just 16,000 

additional workers per month in part-time jobs. And the average 

work week actually since June of 2009 has increased by 0.7 hours, 

it is now approximately the same as it was prior to the recession. 

But what is actually interesting is we have had experiences with 

legislation like the Affordable Care Act in Massachusetts and in 

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setts and Hawaii. According to the Urban Institute, in Massachusetts there has been no evidence of significant shifts toward parttime work compared to the rest of the nation. 

Now in Hawaii, they don’t have a 40-hour requirement or a 30- 

hour requirement. They have a 20-hour requirement in Hawaii 

which requires all employers to provide coverage for those workers 

with employment of 20 hours a week. 

There has been only a 1.4 percent increase of employees working 

less than 20 hours a week and we have now seen studies from the 

University of California’s Labor Center that workers at greatest 

risk of work hour reduction represents at most, 1.8 percent of the 

U.S. workforce. So the sky is not falling. 

Mr. COURTNEY. And again, just to go back to my—just the cost 

growth though, I mean, is also a very encouraging trend that is out 

there in terms of just overall health care costs and the Medicare 

system in particular. 

Mr. POLLACK. Yes, there is no question that what we have seen 

with respect to cost, Medicare is a perfect example, there has been 

a moderation of increase in cost. 

Now I can’t say to you that is due completely to the Affordable 

Care Act. I think that would be a clear exaggeration. Certainly, 

some of this has to do with what happened in the recession and 

some people seeking less health care. 

But certainly, the Affordable Care Act has had a salutary impact 

with respect to it. Again, I am not saying it is the full reason, but 

it certainly is a part of the reason. 

Mr. COURTNEY. And that is exactly what Mr. Holtz-Eakin’s successor reported recently, which is that again, some of the moderation in the Medicare cost growth was ACA-related, particularly in 

terms of the moderation of payments to the managed care plans. 

So there, you are right. You can’t ascribe all of it to that, but 

clearly it hasn’t aggravated the situation and things like hospital 

readmission policies, which is again, costing more efficiencies in the 

health care system with again, smarter reimbursement to providers 

of managed care services. 

CBO has definitely concluded that has had a beneficial effect in 

terms of moderating cost growth, which is what I think everybody 

wants. 

Mr. POLLACK. And it certainly is a wholesome thing for us to be 

paying more for quality of care than quantity of services and that 

is a direction we are taking incrementally and I think that is going 

to be very helpful. 

Thank you. 

Chairman ROE. I thank the gentleman for yielding. 

Dr. Heck? 

Mr. HECK. Thank you, Mr. Chairman. 

Thank you all for being here today and providing your testimony. 

Like Mr. Richardson, I have a friend who owns a restaurant 

chain where I live in Nevada; certainly nothing to the scale of 

White Castle, but had five outlets, was in the process of building 

his sixth and in the five outlets that he had, he had about 250 employees, provides some insurance, but his insurance does not meet 

the new essential benefit requirements. 

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So I was asking him, ‘‘What are you going to do? What are you 

going to do to meet the requirements of the law?’’ He said well, he 

could change his plan to meet the essential benefits requirements 

which would then increase the cost. 

He could adjust the hours; you know, he has got a big concern 

about the 30-hour work week especially in a restaurant business 

where it is a second job for some, or there are college students and 

they like the flexibility of being able to work 18 hours this week, 

32 hours the next week. 

So that was going to cause him an increased cost for bookkeeping 

as well as all of the other costs associated with the regulatory compliances or he would pay $420,000 a year in his penalty, and he 

had to decide which one would actually be more cost-effective for 

him because his concern was he didn’t want to stop providing the 

insurance. 

He wanted to do what was right for his employees and continue 

to provide his insurance that his employees had that they enjoyed; 

didn’t necessarily meet the requirements, but that was his option. 

Increase the cost by changing the policy and all of the regulatory burdens or just getting out of it and paying a $420,000 fine. 

As I mentioned, he was doing this—we had this discussion while 

he was building his sixth outlet and I asked him, ‘‘If you knew all 

this was going to happen before you broke ground on your sixth 

outlet, would you have added it?’’ He said, ‘‘Absolutely not,’’ and 

that would have been another 50 to 60 people that wouldn’t have 

had a chance for a job in my district. 

Dr. Holtz-Eakin, do you see other options for employers other 

than this pay the penalty or change your work hours or meet the 

plan requirements if you offer something less than that? Are there 

other ways that employers are going to be able to meet the intent 

of the law and provide insurance to their employees? 

Mr. HOLTZ-EAKIN. They have very limited options. When you run 

down the menu, you either pay penalties or you move the part-time 

people or you provide the insurance and meet the costs of hitting 

the essential benefits. 

Mr. HECK. What impact is there on the self-insured Taft-Hartley 

type plans? Is it the same as it is in on somebody, an employer who 

is buying insurance from a broker insurance company versus those 

that are self-insured Taft-Hartley plans? 

Mr. HOLTZ-EAKIN. They are not identical, but I am not 100 percent sure of the difference. We can get back to you on that. 

Mr. HECK. Okay. If you could, please. And one thing I just want 

to say, there has been a lot of—I think everybody agrees we want 

people to have increased access to quality health care at a lower 

cost and I agree with Mr. Pollack. 

We want to reward quality not quantity and I think some of the 

discussions that we have been having in other committees on reforming the sustainable growth rate formula is looking at doing 

just those kinds of things for Medicare, but increasing access to 

health insurance doesn’t necessarily mean you are increasing access to health care. 

I am an emergency medicine doctor by trade and I can tell you 

that a large portion of people we see in the emergency department 

are the uninsured. Certainly, because it is the only place they can 

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go. The only place where you can take care of somebody any time 

of day regardless of chief complaint, regardless of ability to pay. 

So now we are going to have roughly 30 million more people if 

the numbers hold out through the fact that they will have insurance and they are going to call for an appointment and they are 

going to be told, well, we can see you in about 3 months because 

we don’t have the infrastructure to take care of those people. 

So what are they going to do? They are still going to come to the 

emergency department because they are not going to wait for 3 

months. And as we all know, the emergency department is the 

most expensive place in our health care industry to try to receive 

care. 

So I think the jury is still out and like you say, there is a lot 

of speculation. You know, it was mentioned, New York is going to 

see a 50 percent decrease in premiums, but New York has one of 

the most restrictive state regulatory environments for health insurance to begin with, so they probably have no place to go but down. 

My state, Nevada, it is estimated that we are going to see a 30 

percent increase in premiums in the individual and small group 

markets. 

So still a lot of unanswered questions, but I appreciate you being 

here and presenting your viewpoints. 

And I yield back the balance of my time. 

Chairman ROE. Thank you, Dr. Heck. 

Ms. Bonamici? 

Ms. BONAMICI. Thank you very much, Mr. Chairman. 

And thank you to all of the witnesses for being here. 

We just heard from a colleague on the other side of the aisle that 

we all agree that we need to make health care more accessible and 

more affordable, and I think you would all agree with that premise 

and I certainly believe that is what the Affordable Care Act is intended to do. 

I am a little concerned about the discussion about confusion out 

there and Mr. Pollack raised that issue. I want to point out that 

just yesterday I read an article in Forbes, with all due respect to 

my colleague from Indiana, this is about Indiana and how they announced that premiums were going to significantly increase 

through the exchange. 

But what they did instead of doing what other states were doing 

and basing their projections on the silver and bronze plans which 

most people will buy, they used the gold and silver—excuse me, the 

gold and platinum as well and here is what the article said that 

resulted in. 

‘‘That is like saying the average cost of a car in an Indiana dealership is $100,000 because it sells $20,000 Fords, $60,000 BMWs, 

and $220,000 Lamborghinis. Technically true, but highly misleading.’’ 

So I am a little concerned about how a lot of this information is 

out there in the public in a way that is causing people to panic and 

to not understand what is really going on, and the article goes on 

to say that it becomes difficult to understand how anyone could 

avoid acknowledging that the disingenuous behavior of the antiObamacare forces truly knows no bounds. 

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And, you know, with all due respect, I understand that we have 

some very qualified witnesses here and I appreciate that, but what 

we need to be doing is being out there talking with people about 

what really is going to happen when for example the marketplace 

insurance exchanges go up. 

My home state of Oregon for example, the Affordable Care Act 

already has had a positive impact. In my district alone, one-fifth 

of the state of Oregon, 106,000 seniors are now eligible for free preventive care, 90,000 women can access preventive care without a 

co-pay, up to 45,000 children can no longer be denied coverage 

based on preexisting condition, for the low income and sick, the Affordable Care Act can be life-changing, even lifesaving. 

Oregon is certainly leading the way with an early insurance exchange, which I am proud to say was established in a bipartisan 

way. I was in the state legislature when—bipartisan legislature— 

did enabling legislation for that exchange. 

The marketplace called Cover Oregon has done a great job, is on 

track to be up and running on time. 

Certainly, Ms. Turner, you talked about market-based solutions. 

That is what the insurance exchanges are. It is working the way 

it is supposed to. When our preliminary costs were made public, 

two insurers actually contacted the insurance division and asked if 

they could lower their rates, exactly what the marketplace is intending to do. 

Mr. Pollack, you did a great job of explaining the benefits of the 

Affordable Care Act. So can you talk a little bit about the increased 

accountability for insurers and how that is affecting the affordability of health care? 

I know that in the first district already more than 230,000 individuals have saved money due to the provisions that prevent insurance companies from spending more than 20 percent of their premiums on profits and administrative overhead and have received 

millions of dollars in rebates already. 

So can you talk a little bit about that increased affordability and 

how that is affecting health care? 

Mr. POLLACK. Sure. As one of the key accountability measures is 

how much of the premium dollar is now spent actually on health 

care as opposed to other purposes; marketing, advertising, agents’ 

fees, administration, profits, and that makes the product a whole 

lot more cost-effective when you say at least $0.80 out of the dollar 

and, in some instances, $0.85 out of the dollar must be spent on 

actually providing care. 

Certainly, there is greater accountability for insurers in terms of 

they cannot deny coverage to people due to preexising conditions. 

They can’t charge a discriminatory premium based on health status. They can’t charge higher premiums based on gender. I think 

all those things are very wholesome matters. 

I would say one thing about your earliest comments and that is 

there is confusion among the American public about what is in the 

Affordable Care—no question that is true, and that is because we 

have had a very contentious political dialogue so far in the country, 

and I think we are going to see a transformation of that in the 

months and weeks ahead. 

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And that is we are going to have a personal conversation, not a 

political conversation, and by a personal conversation I mean: how 

does it affect an individual, how does it affect his or her family, 

how does it affect neighbors and friends? 

And I think the more we have that conversation, and that is 

going to increase in the weeks ahead, I think people will have a 

far greater appreciation of how the Affordable Care Act will benefit 

them. 

Ms. BONAMICI. Thank you. 

I see my time has expired. I yield back. Thank you, Mr. Chairman. 

Chairman ROE. I thank you for yielding. 

Mr. Rokita? 

Mr. ROKITA. I think both chairmen. 

Ms. Turner, do you think insurance exchanges are free market? 

Ms. TURNER. The exchanges are when you have Washington setting the rules for what the health insurance has to be, 60 percent, 

70 percent, 80 percent, 90 percent actuarial value with so many 

rules and regulations with consumers having a choice of only four 

plans that are basically cookie-cutter, no, I don’t believe so. 

I believe that consumers on their own would find and the market 

would provide many more choices. 

Mr. ROKITA. Right. In fact, do you think we have those choices 

now or not? 

Ms. TURNER. No, we don’t have those choices now, and I think 

that is really was the challenge that we should have been addressing is what can we do— 

Mr. ROKITA. Because we really don’t have a free fluid market. 

Ms. TURNER. That is right. 

Mr. ROKITA. And why not? 

Ms. TURNER. We don’t have a free fluid market because consumers aren’t able to be consumers. The tax treatment of health 

insurance so incentivizes in the past. 

People get their health insurance through their workplace where 

they are told this is the choice that we can offer. They may or may 

not like it, but that is all they get. 

If we had a free open market where people were able to shop for 

their own insurance, their health care is a different thing, shop for 

their own insurance, then they would be able to force the market 

to provide much more affordable and diverse options. 

Mr. ROKITA. Thank you. 

And following along on that same line of questioning to Dr. 

Holtz-Eakin, how much of the insurance market or even the health 

care market is run by the government through programs or regulations? 

Mr. HOLTZ-EAKIN. All of it at some level. This is a highly regulated— 

Mr. ROKITA. All of it? 

Mr. HOLTZ-EAKIN. Yes. We have standards for providers, licensing. We have standards in the state insurance markets. We have 

enormous public payer programs in Medicare and Medicare and 

now the Affordable Care Act. It is hard to describe any of this as 

market driven. 

CEWDOCROOM with DISTILLER

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Mr. ROKITA. Okay. So Mr. Pollack testifies that he would rather 

keep going in this direction. What would that lead to? 

Mr. HOLTZ-EAKIN. I am deeply concerned about the future under 

the Affordable Care Act. 

Mr. ROKITA. How would the members of Mr. Pollack’s organization fare into the future if we keep going down this road? 

Mr. HOLTZ-EAKIN. Number one, in the end, it is the quality of 

the economic growth that determines the incomes you have to 

spend on everything including health care, and this is bad economic policy from the word go. 

Number two, it left unreformed to a great extent programs, 

Medicare and Medicaid, that are intended to serve our seniors and 

poor but do so in quite a substandard fashion. We have not gotten 

rid of fee-for-service medicine. We haven’t solved the problems in 

Medicaid. Those problems are going to remain and indeed expand 

if we go down this path. 

We have set up on the care side an enormous incentive for consolidation and monopoly power. That is not going to lower anyone’s 

costs. It is going to raise costs. 

And, you know, on the insurance side, we have essentially turned 

this into a large, nationally regulated utility, and I don’t think we 

are going to get good performance out of it. 

Mr. ROKITA. Thank you very much. 

Mr. Richardson, switching it up a little bit, how do you and your 

company handle employees who have pre-existing conditions? 

Mr. RICHARDSON. They are included on the insurance so we take 

care of that, you know, that way. 

Mr. ROKITA. Do you have any idea how much your increase in 

cost is? Have you ever done that kind of analysis? 

Mr. RICHARDSON. I don’t have a specific number on that. We can 

put the study to it and get back with you a specific number. 

Mr. ROKITA. The point is, the private sector is handling pre-existing conditions? Yes or no? What is your opinion? 

Mr. RICHARDSON. Yes, and I think what we started to do another 

way, and I welcome Congressman Andrews’ comment on thoughts 

and ideas, is one of the things that helped us a lot at White Castle 

is a real focus on wellness. 

So we started paying for preventative visits covering 100 percent 

of the co-pay and we have seen that have a real positive impact, 

just in terms of general, common-sense solutions that help our people. 

Mr. ROKITA. And why did you start doing that? What was your 

motivation? 

Mr. RICHARDSON. Costs were increasing and we were looking for 

ways to—first and foremost, we care about our 10,000 people, but 

we also recognized that it could provide us the chance to have 

lower health care costs. 

Mr. ROKITA. And do you find that they—you probably have a 

wide disparity of income salaries and hourly wages across your organization. What differences do you find across those wages and 

salaries and incomes in terms of how people react or care for themselves or their families in terms of their health? 

Mr. RICHARDSON. Well, first and foremost, our founder believed 

in providing freedom from anxiety and recognizing the dignity of 

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each team member. So if we are lucky enough and we do our job, 

we are able to have someone stick around and be part of our team 

for the long haul. 

And what we know is more of what is in common that if we provide good education and good access and awareness of what the 

benefit is, it is going to be there for people when they need it the 

most. 

So I don’t know if I could call out specific disparities, but I know 

that we are in a lot of urban areas, we are in rural areas, suburban 

areas, but we try to focus on what is in common which is that freedom from anxiety that our plan provides. 

Mr. ROKITA. Thank you. 

I see my time has expired. 

Chairman ROE. Thank the gentleman for yielding. 

Mr. Polis? 

Mr. POLIS. I thank the Chair. 

First, I wanted to engage Ms. Turner. In your remarks, you mentioned, quote—‘‘No wonder businesses are confused.’’ It would seem 

to me that it is confusing for businesses that after the President 

administratively delayed the employer mandate, Congress is taking 

up legislation that authorizes the President to do what he already 

did. 

To your knowledge, is anyone suing the President to stop him 

from this administrative delay? 

Ms. TURNER. I am not aware of that, Congressman. 

Mr. POLIS. Nor am I, so it would seem like the only confusion 

that is being caused is by this Congress. I think the actions of the 

President were clear, to delay the employer mandate to 2015 from 

2014. If there is any confusion, it is because Congress is running 

a bill—ran a bill, and now has a hearing to do what the President 

already did. 

I also was wondering if the gentlelady is aware of some recent 

polling information that 42 percent of the American public are unaware that Obamacare is in force. 

Has Ms. Turner seen that, perhaps when it came out a few 

weeks ago? 

Ms. TURNER. I have, yes. 

Mr. POLIS. And, do you have any idea why nearly half the American public might be so misinformed as to believe that Obamacare 

is not in fact the law of the land? Any hypotheses or suggestions? 

Ms. TURNER. This has been such a huge political battle because 

so many of us feel that this really is an affront to freedom and it 

is a bigger battle than just health care— 

Mr. POLIS. Well, reclaiming my time, the question was not do you 

support or oppose the Affordable Care Act or Obamacare. The question was do you think it is in force because you know, I know Ms. 

Turner was concerned about the ‘‘confusion’’ that she cited in her 

comments. 

It would seem to me that it is reasonable to believe that 42 percent of the American public believe Obamacare is not in force. That 

could very well be because in fact this body, this House, continues 

to vote time after time after time after time to repeal Obamacare. 

And of course for those who aren’t part of that, as engaged in the 

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ply symbolic votes. So if Ms. Turner is concerned about—Ms. Turner, if you are concerned about the ‘‘confusion,’’ that businesses and 

individuals have about Obamacare, don’t you feel that this Republican strategy of repeatedly repealing all our parts of Obamacare 

in the House actually contributes to that very confusion that you 

were concerned about? 

Ms. TURNER. Well, but as the chairman was saying, seven, I 

think Mr. Walberg was saying, seven of those nearly 40 votes have 

actually resulted in legislation being signed into law to amend or 

repeal parts of this law. So it is not futile— 

Mr. POLIS. Well, reclaiming my time, again, Obamacare has not 

been repealed. The Affordable Care Act has not been repealed. 

Ms. TURNER. Provisions have. 

Mr. POLIS. Do you agree with that statement or has Obamacare 

been repealed? 

Ms. TURNER. Provisions of it have. 

Mr. POLIS. So would you say as a whole Obamacare has been repealed? 

Ms. TURNER. No. I said seven— 

Mr. POLIS. Has Obamacare substantially been repealed? 

Ms. TURNER. Not substantially. 

Mr. POLIS. Okay. 

Ms. TURNER. But key elements— 

Mr. POLIS. Reclaiming my time, I want to go to Mr. Richardson. 

Our time is limited. 

I thank Ms. Turner. 

Are you supportive of the President’s action in administratively 

delaying the employer mandate to 2015? 

Mr. RICHARDSON. Congressman, if we were going to bring out a 

hot and tasty new sandwich but something wasn’t right and we 

needed to look at what to do much better— 

Mr. POLIS. Reclaiming my time. I am not talking—I don’t want 

to know about sandwiches. I know that you serve them perhaps, 

but my question is are you personally supportive of the President 

administratively delaying the employer mandate to 2015 instead of 

2014? 

Mr. RICHARDSON. White Castle is grateful that we have got the 

chance for maybe some common sense dialogue about how we can 

address other issues like 40 hours per week, a better definition of 

full time— 

Mr. POLIS. Well, again, are you supportive—yes or no—of the 

President’s actions to delay the employer mandate or do you only 

talk about— 

Mr. RICHARDSON. We were relieved when we heard the news that 

the employer mandate was going to be delayed in hopes that it 

gives us the chance to address— 

Mr. POLIS. Reclaiming my time. Reclaiming my time. You were 

relieved. And are you personally or is your company confused at all 

about whether the employer mandate is enforced in the year 2014? 

Mr. RICHARDSON. I think a lot of times people like to think of 

this as tic-tac-toe. This is a 64-box Rubik’s cube and everything we 

do has— 

Mr. POLIS. Reclaiming my time. The employer mandate is not in 

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tioned, as far as we know the President has not been sued to stop, 

that it is not enforced, there is no 64-box Rubik’s cube. There is no 

employer mandate in 2014 thanks to the President’s actions, which 

you are relieved he took— 

Mr. RICHARDSON. We are relieved, but we know it is coming 

soon. 

Mr. POLIS. Again, to be clear, are you confused about whether 

the employer mandate goes into effect in 2014 and if so, why? 

Mr. RICHARDSON. Our confusion is more around how we are 

going to be able to comply with the laws. We continue to wait for 

guidance and regulations. 

You know, as a good corporate citizen, we are going to comply 

with the law, but what is confusing to us is trying to understand 

where do we go from here. 

Mr. POLIS. But are you clear on the fact that the employer mandate does not impact your business in 2014 thanks to President 

Obama’s administrative action? 

Mr. RICHARDSON. We are thankful that appears to be the case. 

Chairman ROE. I thank the gentleman for yielding. 

Mr. Salmon? 

Mr. SALMON. Thank you. 

Mr. Richardson, the way I see it for employers they have four 

choices. You can add to or take away if you so desire. 

Number one would be maintain coverage and absorb the cost increases. Two, maintain coverage and pass on the costs to workers 

and consumers. Three, decrease employee work hours to avoid fulltime requirements; or four, drop coverage altogether and pay a 

penalty. 

Do you see any other alternatives? 

Mr. RICHARDSON. No, Congressman, I think the difficulty for us 

is in restaurants, we are focused on hospitality and that is a very 

people intense and big investment that we are making in our people and our profit per employee as an industry is a $750 compared 

to a typical industry where that is about $10,000. So it hits us 

harder. 

Mr. SALMON. I met with folks from the American Restaurant Association. I don’t know if you guys remember, but I talked to several of the convenience store CEOs—not convenient stores but fast 

food CEOs and they said that most of their employees truly believed with the passage of Obamacare that they were going to get 

free health care. 

They then said that when they learned that they were going to have to pay something on their premiums even as low as $100, 

most of them would opt to not take it. And then to add insult to 

injury, once they decide to not take it, they will be facing a tax. 

Do you see that as a slippery slope for some of your employees as 

well? Do a lot of them believe that President Obama was giving 

them free health care? 

Mr. RICHARDSON. The bigger challenge for us will be with team 

members who have insurance now—we have offered it since 1924— 

is waiting to see what we are able to provide, and our biggest concern is it won’t be able to be as rich a benefit of what we are providing now and we won’t have the opportunity to allow that to be 

available to as many people. 

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Mr. SALMON. I am going to ask for your speculation. I am going 

to ask Ms. Turner as well. Do you believe that the President took 

this executive action to postpone the employer mandate because he 

wants to make sure that it is easier on employers or do you think 

he did it out of political concerns? 

Ms. TURNER. It is very difficult to assess anybody else’s motivations, but if they believe that this was going to change employers’ 

behavior in hiring full-time workers for 1 year, I think that was 

really misguided. 

The fact that so few of the other agencies within the government 

understood or were even consulted; CMS, OMB, or treasury about 

this decision suggests that it was made in the White House. 

Mr. SALMON. Well, let me ask this question then. It has been 

over 3 years since the bill was passed and signed into law. Is it reasonable to assume that one more year will allow for the government, businesses, individuals, and insurers to understand the law 

much less comply with it? 

Ms. TURNER. I think it is going to add to their confusion and I 

think that the confusion also is the reporting requirements have 

been delayed but some employers are very concerned whether or 

not that means that whether or not they are still required to actually comply with the mandate. 

Perhaps an employee would sue them saying they have been 

harmed even though they weren’t making the reporting requirements they weren’t providing the health insurance that was still on 

the books as they mandate it. So that is a very different situation. 

I don’t think it is going to change their behavior. The June jobs 

report showed that the number of part-time employees that was 

hired were 360,000 that month and that 240 full-time jobs were 

lost. So employers are now making decisions about how to restructure the workforce. They are not going to change that after a year. 

Mr. SALMON. And I think the next question I was going to ask 

has already been answered. Isn’t it reasonable to assume that one 

more year will ensure it will be a workable system? I think you are 

saying you don’t believe it will. 

Do you believe it can, Mr. Richardson? 

Mr. RICHARDSON. Yes. 

Mr. SALMON. Do you agree with her? 

Mr. RICHARDSON. Yes. 

Mr. SALMON. That a year really doesn’t do much to change this? 

Mr. RICHARDSON. No. The train is coming around the bend. It 

gives us more opportunity for common sense dialogue about what 

we can do to really address the core issues that are going to raise 

employer costs and make it harder to create jobs and bring prosperity to people who are aching for it. 

Mr. SALMON. And I am about to run out of time, but I would like 

to say that even though one member of this panel says that 

Obamacare is going swimmingly and that it is actually increasing 

the number of full-time jobs in our economy, recently my community college district announced that they were going to take 1300 

employees and change them from full-time status to part-time status because they can’t envision having to come into compliance 

with the costs and the trouble associated with Obamacare. 

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And lastly, I might point out that in the recent letter from the 

Teamsters where they said that the 40-hour work week as we know 

it will be dead and gone—there are a lot of folks out there—I don’t 

know that you would call it the sky is falling, but they are recognizing this thing for what it is. 

It is a job killer and a year doesn’t buy us anything other than 

postponing the killing of those jobs— 

Chairman ROE. The gentleman’s time is expired. 

Mr. SALMON. It is killing me with a thousand cuts. 

Chairman ROE. Thank the gentleman for yielding. 

Ranking Member Miller? 

Mr. MILLER. Thank you very much. 

I want to thank the panel. 

One of the hallmarks for the critics of the administration—I 

know this has always been—that there is a great deal of uncertainty and we passed through sort of a great period of uncertainty 

2 years ago. 

It looks to me like much of the uncertainty now much of which 

is real in the economy is also certainly around this bill is manufactured for the sake of uncertainty so that people question it. 

I think we see a difference in Ms. Bonamici’s state and in my 

state where people rolled up their sleeves and said how do we 

make this work across our state, across our economy, and there 

seems to be much less uncertainty when I talked to my employment community from the largest like Chevron to small businesses 

across the cities and towns that I represent. 

And interestingly enough, most of them say that if they have the 

business, this is of minor concern, but their concern is about economic growth and the economy and it is interesting also that you 

sort of see more and more economists from the right and from the 

left, however you want to characterize economists, suggesting that 

the big enemy at this particular point in terms of certainty is a 

question of the continued sequestration that is dampening growth 

across the country and then the question of the debt limit; will the 

Congress of the United States, the United States as a country meet 

its obligations and honor its debt. 

But when I talked to small business people, as they say, I have 

got the book of business, this health care law is neither here nor 

there. If I don’t have a book of business, I have got problems and 

I have got health care problems. 

Today, one of your—I don’t know, the rival, but in your business—Sonic was asked this very pointed question; are you changing your work hours, are you changing your workforce because of 

health care? And he said we are growing. 

We have a great rollout of a new product. No. We are adding 

stores, adding people because we are growing. Then they compared 

them to McDonald’s apparently which has had a little bit of dip 

here or something. 

And that is what I hear on the street. Now some of it is anecdotal, some of this they don’t know, but it really isn’t this. It is 

about whether or not this economy can develop a wage base so that 

people have money to spend on Main Street. 

That is what I hear from small businesses. And so I think politically in this town we are going to agitate this health care bill until 

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we have got people absolutely confused. And yes, we can chew up 

that year, Mr. Richardson, you keep saying we can figure out how 

to do this but I don’t know that there is goodwill here because this 

is all—this hearing is manufactured. 

We already know what the President did. We could have a hearing on how do we handle this; what changes are necessary. But 

that is not happening. I think as Mr. Pollack has pointed out, we 

have been going through this now for months and months and 

months and I just go back to the real question—the real question 

is whether or not, you know, we had people like FedEx tell us the 

greatest drop in business in the history of the company was when 

Congress was playing with the debt limit in July; worldwide, the 

business just stopped. 

I had small business people who had international book of business tell me exactly the same thing. Orders stopped. Because for 

the first time in history it was suggested that maybe we weren’t 

going to honor our debt. This would really teach the federal government a lesson. 

No, it would teach the business community a lesson. And so I 

just—Mr. Eakin’s and Mr. Pollack, I would just like to know where 

you sort of see this question of growth being determined here. 

Obviously, if you have a declining book of business or you have 

a stagnant book of business, this gets magnified rather dramatically as opposed to if you have a book that seems to be growing. 

And everybody says, well, we are growing. We are growing, you 

know, anemically, but we are growing. The third and fourth quarter will be better somehow. 

Mr. POLLACK. You know, Mr. Miller, many of us I think often say 

that really growth in the economy comes from small businesses and 

small businesses actually come out very well with respect to the Affordable Care Act. 

Take the smallest businesses, those with fewer than 25 workers, 

they are now eligible for tax credit, premium subsidies, not everyone to be sure, but those tax credit premium subsidies now go up 

to 35 percent of the cost of providing health care for their workers. 

Come January 1, it will be 50 percent. 

So with respect to growth of the economy and more jobs, I think 

you have to look at small businesses that are not affected by the 

employer mandate and who are now eligible for tax credit premium 

subsidies. 

Mr. MILLER. Mr. Holtz-Eakin, I don’t know how much time you 

have before that turns red, but— 

Mr. HOLTZ-EAKIN. I am sorry? 

Mr. MILLER. If you wanted to comment on the question. 

Mr. HOLTZ-EAKIN. No, I think that small business tax credits are 

a red herring, it is temporary at best. It doesn’t change the fundamental characteristics of the law— 

Mr. MILLER. I am asking about the question of growth— 

Mr. HOLTZ-EAKIN. I think growth is the top priority for this 

country right now and if you look at the Affordable Care Act from 

the perspective of growth policy, it is not good policy. 

You don’t levy $1 trillion in taxes, impose a big regulatory burden, and create a large new entitlement program when we have 

CEWDOCROOM with DISTILLER

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many that are already broken and bleeding red ink. That is not a 

path for growth. 

Chairman ROE. Thank the gentleman for yielding. 

Mr. Messer? 

Mr. MESSER. Thank you, Mr. Chairman. I appreciate the opportunity to speak about this important topic today. 

I certainly thank the panelists as well. 

I have to tell you, I am from Indiana’s Sixth Congressional District. It is a rural district, 19 counties in east, central, and southeastern Indiana. It certainly has its high number of White Castles 

and we have had public forums in my district in both Dearborn 

County and Hancock County and the number one concern raised by 

small business owners in our district is they look at the challenges 

they face in the next several years is the implementation of this 

act. They see it as the highest cost in front of them. They see it 

as the greatest amount of uncertainty, and they are doing their 

best to respond. 

In my opinion, and I want to direct this question to Mr. HoltzEakin, it is my opinion that they, the congressional budget office 

dramatically underestimates the amount of employers that will be 

forced to drop or reduce employees to part-time status due to 

Obamacare. 

As a former CBO director, what do you think will be the impact 

on the federal budget if more employers drop coverage or reduce 

hours of than the CBO has originally estimated? 

Mr. HOLTZ-EAKIN. We certainly know that if employers drop coverage, individuals go to the exchanges. These are very rich subsidies in the exchanges. That is a big burden on the taxpayer. 

I have done the arithmetic as I mentioned. This is in the financial interests of both the firm’s and the employees for employees 

getting compensation after about 300 percent of the poverty line. 

The CBO relies heavily on the notion that high wage workers 

benefit from a different federal subsidy which is the tax exclusion 

and that they will want to hold onto the federal subsidy and that 

nondiscrimination rules will at best require those firms to offer 

every employee the insurance. 

I am less sanguine about that thin firewall holding and I am 

afraid the taxpayer is about to pick up a big bill. 

Mr. MESSER. Yes. And I have to tell you, listening to the folks 

in my district, from the school systems in my district, to the small 

business employers in my district, I am convinced whether the consequences are intended or not that placing the Obamacare requirement on employees that have 30 hours or more has become the biggest attack on the 40-hour work week in decades. 

Employers are responding. I know that anecdotally. Mr. Richardson, if you could expand just a little bit about—has that been a 

consideration within your business? 

Mr. RICHARDSON. It has been a huge consideration for us, and I 

think what we are seeing is I know a lot of times people talk about 

bifurcation of income. We are going to see bifurcation of scheduling. 

As we look ahead to implementation, we are looking at a $9 million 

increase in our health care costs if we don’t make adjustments. 

So we have consciously said and we want to be transparent with 

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time, you are going to stay full-time, but if you are part-time, we 

are going to be scheduling part-time at 25 hours a week or less. 

That is not what we would do under normal circumstances. That 

is not what we have done for 92 years. 

Mr. MESSER. It is not good for your business, and it is not good 

for your employees either, right? Both suffered. 

Ms. Turner, if you could expand just a little bit—you alluded in 

earlier questioning to the fact that you are seeing, in the economy, 

the rise of part-time jobs by I believe in response to the Affordable 

Care Act. If you could comment on that. 

Ms. TURNER. Yes, Mr. Chair—Congressman, because there is a 

look back period. So those businesses have to start restructuring 

their businesses now when they believe the employer mandate was 

going into effect in 2014. 

And I think that the thing that we have to pay attention to is 

how this is affecting the most vulnerable people in society; people 

who are trying to get their foot on the ladder of economic opportunity, people who are barely getting by on a 40-hour week, often 

minimum wage. 

They are having their hours cut to 30, 25, some of them losing 

their jobs entirely. People, we find, learn today a new survey that 

a third of doctors are seriously considering leaving the practice of 

medicine. Even those who have health insurance are going to have 

a hard time getting to see a doctor to see them. 

So there are a so many distorting factors throughout the economy and now we have a delay of the employer mandate but not the 

individual mandate. 

So even though the businesses, big businesses are not required 

to provide health insurance, individuals still have to provide that. 

So I think that when we look at who we are trying to help, this 

is hurting them the most. We still have 30 million uninsured even 

if everything goes right. 

Mr. MESSER. Yes. Ms. Turner said it better than I would have 

said it myself, so I yield back the balance of my time. 

Thank you. 

Chairman ROE. Thank the gentleman for yielding. 

I think Mr. Hudson is next. 

Mr. HUDSON. Thank you, Mr. Chairman. 

I think the witnesses for being here today. I know you have busy 

schedules. 

You know, I talked to business people back home. I go home 

every weekend, every chance I get and I travel to my district. I talk 

to business people who are struggling with, you know, projecting 

costs for their business. 

Mr. Richardson, you talked about in your testimony some of the 

effects of the auto enrollment provision. As you may be aware, I 

have introduced a bill to repeal this requirement, H.R. 1254. Could 

you just outline some of the problems that your company would 

face with auto enrollment and can you quantify the impact this 

provision will have on your business? 

Mr. RICHARDSON. We support repeal of the auto enrollment because it hurts our team members and the way we look at it is 43 

percent of White Castle team members are under the age of 26, so 

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rolled in the plan and their check get smaller and it just creates 

an unnecessary burden. It is redundant, and to us it is one of those 

areas where this new window of time before implementation hopefully gives us a chance to address that so employers can do what 

they do best, create more jobs. 

Mr. HUDSON. Absolutely. Could you tell us sort of how you are 

projecting what your costs are going to be with auto enrollment 

and what that impact specifically will be? 

Mr. RICHARDSON. A lot of the costs is in how to design the right 

ISIT systems to be able to monitor and track, but beyond that, we 

know that there is going to be this back-and-forth type of thing 

happening. 

So in terms of quantifying, I don’t have an exact number for you 

other than we can look at the people costs, the labor costs, and the 

time costs and our number one focus is having engaged team members. 

If you are in the hospitality business, you want people to be 

happy being able to focus on guests. We don’t think we will have 

as good an opportunity to do that if were trying to explain to them, 

well, let us work this out and, you know, follow your wishes. 

So it really gets between us and our team members and builds 

a wall that we think need not be there. 

Mr. HUDSON. I appreciate that. I hear that from a lot of employers. The first time an employee is going to see money missing from 

their check, they are going to then come to the employer and say 

why did you do this to me. So I understand that. I appreciate it. 

What other problems do you see with the implementation of this 

requirement affecting companies? 

Mr. RICHARDSON. I think some of the bigger challenges are going 

to be, you know, we are a medium-size restaurant chain, but if you 

start to look at the range and different sizes of restaurants and 

how that is going to impact them and once you get to that threshold where auto enrollment is forced upon you, some chains might 

have a global footprint and it may come easier for them, but it really disproportionately, like many parts of the law, falls harder on 

those of us who employ more people as ambassadors. 

So it is really attacks the fee on our ability to keep our people 

happy and to deliver our service model. 

Mr. HUDSON. I appreciate that. 

And, Mr. Chairman, I yield back. 

Chairman ROE. Thank the gentleman for yielding. 

Dr. Price? 

Mr. PRICE. Thank you, Mr. Chairman, and I apologize for coming 

late but I have reviewed the testimony. 

I appreciate everybody’s comments. 

I want to focus on a couple of things. One, I heard that some 

friends on the other side of the aisle said there weren’t any alternatives and I just want to point out that there are significant alternatives. 

H.R. 2300 is one that is now in its third Congress and it incorporates what we call patient-centered health care, which is patients and families and doctors making medical decisions, not 

Washington, D.C. or insurance companies. So we do have wonderful alternatives, and I would urge my colleagues to read them. 

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I want to ask a couple specific question. Dr. Holtz-Eakin, the regulatory burden that exists in the employer mandate is significant. 

Now, for big businesses, it is significant, but they have got stacks 

of folks that do this stuff all the time. 

And so although it is a burden and I think it cuts into jobs that 

they can create, but I want to focus in on the small businesses. If 

you are the mom and pop grocery store down the corner and you 

have got four or five employees or you are in the franchise business 

and you have got multiple restaurants and you have got employees 

that will come under this burden, what happens to small businesses? Where do they have to get that money? Does it affect their 

business? Does it affect jobs? 

Mr. HOLTZ-EAKIN. All the testimony from every small businessman who has talked about complying with the regulatory burden 

says that it is a big burden. 

This burden comes in the form of time and that is time away 

from focus on the business, which is the core mission of management, or its money. You have to hire outside expertise. It is often 

quite expensive. That money cannot be plowed back into the business. It can’t be used to hire new workers or expand payrolls. 

And most small businesses are very cash flow dependent. So this 

is going to hit them at a time when they are struggling for cash 

flow because is a weak economy. 

We have seen it in the official reports as well. The CBO reported 

that these were unfunded mandates of significant size and the employer community. We have seen it in the administration’s own 

rulemaking where they have to identify economically significant 

rules and—is littered with them. 

So I don’t think that there is any question about the cost side 

of this equation. 

Mr. PRICE. And the cost side to businesses, we sometimes get 

hung up on that and don’t finish that paragraph. What that results 

in, does it not, is actually fewer jobs being available in those small 

businesses? 

Mr. HOLTZ-EAKIN. Yes. I mean, prior to your arrival, you can 

think of the Affordable Act from many dimensions, but if you look 

at it from the dimension of economic growth policy, it is bad economic growth policy. 

Mr. PRICE. Hurts businesses, hurts jobs— 

Mr. HOLTZ-EAKIN. Yes. 

Mr. PRICE.—hurts the economy. 

Ms. Turner, I appreciate all of the work that you do in health 

care. You have been a real champion for what I have mentioned 

as patient-centered health care. 

I am curious as to the comments that you made about the employer mandate and what we are mandating and are we not with 

this in the individual mandate just ceding the definition of health 

care—health coverage to Washington? 

Ms. TURNER. Absolutely. 

Mr. PRICE. Why is that a problem? 

Ms. TURNER. Your legislation, which I think is really such an important model for people to look for when people say the conservatives don’t have free market solutions, we absolutely do. And I 

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thank you for your tremendous work on H.R. 2300 over several 

congresses. 

What we see in the marketplace is a growing movement toward 

policies that make sense for businesses and employees. 

The number of health savings accounts has grown to 15 million 

in less than 10 years. Businesses are looking to find health insurance that is affordable that gives employees protection if they have 

major health costs as well as providing an option so that they can 

have preventive care to make sure that the policy also covers routine doctors’ visits for preventative measures. 

That is the direction people were going because that is more affordable. But the health law says no, Washington knows best. 

We are going to tell you what you have to and it is going to go 

through the roof and we are going to have even more economic and 

health policy dislocations. 

Mr. PRICE. Violating all of those principles, access and cost-effectiveness. 

Dr. Holtz-Eakin, I want to visit very quickly the issue that kind 

of flew under the radar screen with this announcement 2 weeks 

ago on the employer mandate delay and that is that the individual 

attestation saying that they are eligible—individuals are eligible 

for a subsidy. What is that going to do to the cost? Do you have 

any estimates on that you have looked at? 

Mr. HOLTZ-EAKIN. I don’t have a numerical estimate, but I know 

which direction it goes. More people will be eligible for bigger subsidies than would be otherwise and what is already likely to be an 

expensive program. 

Mr. PRICE. Why is that? 

Mr. HOLTZ-EAKIN. You don’t have the ability to do the 

verification, and I would be surprised if people attest to be poorer 

and less qualified than they really are. 

Mr. PRICE. And if they attest for something that actually isn’t 

true in retroactively, retrospectively, does the IRS not have the authority to come in and then tax them for what they claimed? 

Mr. HOLTZ-EAKIN. There are limitations on reclaiming excess 

payments already in law, and I would say that the administration 

has already announced that it won’t enforce the individual mandates in states that don’t do the Medicaid expansion. It has deferred enforcement of the employer mandate. We will see what 

happens with enforcement of recapture provisions. 

Mr. PRICE. Thank you, Mr. Chairman. 

Thank you. 

Chairman ROE. I thank the gentleman for yielding. 

I will now yield myself 5 minutes. 

To start out with, I agree that one of the things that we should 

do and it is a laudable is to expand coverage to people to as many 

people in our country as we can, and we spent twice per capita 

what any other country does. 

There is so much waste and we could not have made a health 

care bill more complicated than this with 22,000 pages, and all the 

money that goes into the infrastructure of this bill doesn’t go to patient care. It doesn’t go to actually me as a doctor, actually seeing 

a patient and performing a procedure or evaluating their problem. 

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Let me just explain to you what happened in Tennessee and this 

is absolutely going to happen here. When Tennessee we started a 

health care reform in 1993 called TENNCare. 

The plan we offered as Dr. Holtz-Eakin said, these subsidies, and 

I will talk about that in a second, was richer than I could afford 

to provide myself and provide my employees. 

So what happened? Fifty percent of the people who got health insurance through TENNCare had private health insurance and 

dropped it. What has happened on the under 26? Sixty percent of 

those young people, they just basically switched to their parents 

plan and when they hit 27, they are going to have a plan that is 

two or three times more expensive than it would have otherwise 

been, and that is a fact. 

The original sin didn’t occur in Genesis. The original sin occurred 

when we had a different tax treatment for individuals and companies as far as health insurance was concerned, so that it has created an imbalance, and this imbalance in cost and what it costs as 

an individual and what it costs with the tax subsidy you get when 

you work for a company. 

I held a hearing in Concorde, North Carolina where—Mr. Hudson’s district—just about 2 months ago. We went through business 

after business. A community college was going to cut the number 

of hours that a community college could teach; a faculty member, 

about half, 40 percent or so of their faculty were adjunct. 

I talked to my own community colleges in my district. Exactly 

the same thing. I have talked to supermarkets. I have talked to 

restaurant chains. 

Mr. Richardson, you brought up something I think that was very 

important. I have never heard of because it wasn’t a business I was 

used to, but how much money you made per employee. And I think 

you talked about $750, and I talked to other companies where they 

make $1200 per employee in that particular business. 

If you have a cost that goes above that, you have nothing; you 

are either going to have to raise your prices high enough that people can’t afford it—and let me just read in this industry—this is 

from Sonny’s Barbecue, which is very good in North Carolina, I 

might add. 

Research shows that since the recession, 70 percent of people 

have changed their eating habits out by reducing or even eliminating dining out according to the National Restaurant Association. 

Increasing menu prices should be the last resort. That is the last 

thing you can do because people just quit coming, and if that happens, you lose jobs. 

Other things that frustrate me with this bill is that in the selfinsured market, we haven’t even talked about that, how that is an 

effect on jobs. Mr. Horn, who is a textile manufacturer in North 

Carolina provided 80 percent. He provided 20 percent in his employees, he covered everything preventative, and put a wellness 

program in, and what did he get for this? 

He got a $63 per employee fee which costs him tens of thousands 

of dollars. My local community, my local city that I was mayor of 

is going to get $177,000 bill and probably will get an exchange fee 

on top of that to indemnify insurance companies. 

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So this thing was made terribly complex, and I have no earthly 

idea why this was ever politicized. Why health care was a Democrat or Republican issue. We should have worked on it together instead of in a partisan way to help solve these problems. 

I came here to do that. I specifically got elected to this Congress 

to help do that and was shut out of the debate. It was very frustrating for me in my job. And I want to talk to you all a little bit 

about—Mr. Pollack, I want to ask you one question. 

Do you think premium support is a good idea for seniors in Medicare? 

Do you think premium support is a good idea in the Medicare 

plan for seniors? 

Would it be a good idea for that plan? 

Mr. POLLACK. The Medicare program works very well today— 

Chairman ROE. No, I am just asking you—switching to that 

plan— 

Mr. POLLACK.—and so I would not want to play with a formula 

that is working very well. 

Chairman ROE.—so it is not working— 

Mr. POLLACK. One of the things that— 

Chairman ROE. I am a senior. Let me just go ahead and reclaim 

my time. 

So it is a bad idea when I turn 65, but it is a good idea if you 

are under 65 if you get one of the—you wholeheartedly support 

that for people now who are low income, correct? In the Affordable 

Care Act? But all of a sudden, I turn 65 and it is a bad idea. 

Mr. POLLACK. I didn’t say it was a bad idea. 

Chairman ROE. You just didn’t support it. 

Mr. POLLACK. I did not say it was a bad idea. I did say that the 

Medicare program is functioning very well. My colleague, Mr. 

Holtz-Eakin was lamenting— 

Chairman ROE. My time is expired. I am sorry, but I am going 

to hold myself to my 5 minutes. 

Mr. POLLACK. All right. 

Chairman ROE. I appreciate very much the witnesses taking 

their time today and you really have been a terrific panel. 

I appreciate all of the folks that showed up. 

And Mr. Andrews is not here, so I will ask Mr. Courtney if he 

has any closing statements he would like to make. 

Mr. COURTNEY. Thank you, Mr. Chairman. Mr. Andrews would 

be very disappointed in me if I didn’t speak up and defend our 5 

minutes here. 

Thank you again for your courteous conduct of the hearing and 

the witnesses for being here today. 

There are a couple bits of housekeeping I would like to point out. 

Dr. Price is absolutely correct. He has introduced H.R. 2300. It has 

been referred to this committee and no action has been taken. 

I wish we had spent the time this morning having a hearing on 

your bill rather than a bill that has already been voted on in the 

House last week. And again, the point that a number of people 

were making here is that again, we have had repeated votes in the 

House rushed to the Floor without committee process, normal committee process, repealing, abolishing, modifying, whatever, and 

H.R. 2300 which again, I respect the gentleman for making a good 

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faith offer to try and reform the system, but how come we don’t 

have that hearing? Instead having a hearing on a bill that has already gone through the process. 

Again, we did not hear one shred of evidence this morning that 

the IRS’s actions taken under well-established law, U.S. Code 7805 

to delay implementation of a program which they have done on a 

repeated basis, again, fully documented by the Congressional Research Service was somehow improper or inappropriate. 

I mean, the fact is they used again authority which they have 

done a number of times. There have been no lawsuits. There have 

been no gotchas in any of those instances, and I would challenge 

any of the witnesses on a later date to present evidence in terms 

of the IRS decisions in the past that have resulted in that outcome. 

The fact is that this issue is off the decks for a full year. We can 

focus on what really matters, which is getting these exchanges up 

and running. In my state, we have four insurers that have filed in 

the individual market, four insurers that have filed in the small 

business market; they are going through the rate review process. 

And again, all indications are they are going to come in well 

below what the Congressional Budget Office projected back in 

2010. 

And again, I come from being a small employer. I understand the 

impact it has and this is, in my opinion, going to be a good day 

for small employers when they have a structured, intelligible marketplace with a benefit plan that they can compare and shop 

around as opposed to the Wild West, which exists in the small 

group market today. 

Again, there are a couple of—you know, we have heard so many 

facts and figures about full-time and part-time. Again, from the Bureau of Labor Statistics, I would just ask, Mr. Chairman, to enter 

into the record a chart which shows that from June of 2012, a year 

ago, to June—excuse me—yes, June of 2013, the U.S. economy has 

added 1,392,000 full-time jobs. 

In exactly the same period of time, according to the Bureau, the 

U.S. economy has added 195,000 part-time jobs. So the notion that 

somehow there are these incentives that we have heard ad 

nauseum about here today is in fact, you know, rebalancing away 

from full-time jobs. 

The numbers don’t lie. That is from the Bureau of Labor Statistics, and again, I would ask that it be made part of the record. 

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Chairman ROE. Without objection. 

Mr. COURTNEY. And lastly, again, Towers Watson which is a 

highly respected health care management firm, again, surveyed 

people back in June, showed 98 percent—they have not and are not 

considering asking current full-time employees to change to parttime status. 

This is before the President’s decision; 95 percent have not and 

are not considering making greater use of contract workers; 89 percent have not or are not considering discontinuing employer-sponsored health coverage for some or all active full-time employees. 

So, you know, look at, folks, this bill is—the horse is out of the 

barn. You know, the House passed the bill. Again, it is a nullity. 

It has no effect legally. Congressional Budget Office says it has no 

budget impact. 

The Senate frankly should focus its time on much better issues 

such as sequestration which again, 690,000 DOD civilian employees lost 20 percent, will lose 20 percent of their paycheck for the 

next 11 weeks. 

In my community of Groton, Connecticut, with 8,000 sailors and 

thousands of—that is what is hurting small business today is having 690,000 federal employees lose 20 percent of their paycheck for 

the next 11 weeks. 

That is hurting people’s ability to go out and buy hamburgers or 

clothing or gas, or rent, not, you know, again, an issue that has 

been taken off the table for a full year. 

That should be the focus of this Congress. I hope in the future 

that this economy—that this Committee is going to focus on real 

issues that are actually inhibiting growth in the economy and not 

talking about, again, a bill that has already passed last week. 

Our process deserves better and the people of this country deserve better. 

And I yield back. 

Chairman ROE. I thank the gentleman for yielding. 

Mr. Walberg? 

Mr. WALBERG. I thank the chairman for holding this hearing, 

and it would have been nice to have had it at a reasonable time 

before action was taken in a blog by the President. 

It is a discussion that we ought to have. This has certainly given 

us the opportunity to have that discussion. It ought to go on. 

Churchill, having Hillsdale College in my district, and a Churchill aficionado as the president of that school, I am reminded of a 

statement that I think applies very well here, Mr. Chairman. 

Churchill said that some people regard private enterprise as a 

predatory tiger that needs to be shot. Others view it as a cow that 

needs to be milked. Too few people see free enterprise as a healthy 

horse pulling a sturdy wagon. 

I want to say thank you to Dr. Holtz-Eakin, Ms. Turner, and Mr. 

Richardson for defending that truth of what private enterprise is 

about; a healthy horse pulling a sturdy wagon that benefits all, 

that provides jobs, that provides opportunity. 

Thank you for giving us real world experience and discussion opportunities that we all should have had a long time ago. 

Mr. Pollack, thank you for giving statistics and the other side of 

the story, but I must admit that the sky is falling argument doesn’t 

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cut it. If it were just that, it would mean nothing to us, but rather 

it is the fact that the foundations of this great country of liberty 

and opportunity with personal responsibility are being bombarded 

and cracked, in certain cases at the point of falling in destruction. 

This is the discussion that should have taken place in 2009. It 

was not allowed. Under the cover of darkness this mandate was 

put through as well as the rest of the health care law and liberties 

were bombarded, and I don’t care what you can say about statistics 

and numbers, it is real live people that we ought to be concerned 

with. 

I mentioned earlier—and why don’t we let them speak again as 

opposed to just a chairman speaking, give them voice. 

When a Democrat Senator, Mr. Chairman, says, ‘‘This is a train 

wreck,’’ when the United Union of Roofers, Waterproofers, and Allied Workers call for repeal or complete reform, when the International Brotherhood of Electrical Workers and National Electrical 

Contractors Association wrote just recently to our chairman, ‘‘We 

cannot afford to sit on the sidelines as this law imposes increased 

benefit cost fees and new taxes on our plans. In addition, the 

health care law exempts all employers with less than 50 employees 

from offering health care coverage. This creates a vast competitive 

disadvantage for the 4500 contractors nationwide that responsibly 

provide coverage for their employees.’’ And then finally, the International Brotherhood of Teamsters, United Food and Commercial 

Workers, and UNITE–HERE say this, ‘‘It will shatter not only our 

hard earned health benefits but destroy the foundation of the 40- 

hour work week that is the backbone of the American middle 

class’’—middle-class—that we are so concerned about, as we ought 

to be. 

And then they said, ‘‘We can no longer stand silent in the face 

of elements of the Affordable Care Act that will destroy the very 

health and well-being of our members along with millions of others 

hard-working Americans.’’ 

Those aren’t statistics, Mr. Chairman. Those are lives. Those are 

people that are being impacted and we ought to have this debate 

before, after, during whatever goes on. 

And isn’t it true that in our civics classes we were told that not 

only laws can be implemented, but they can be repealed, and that 

takes a discussion. 

More importantly, it involves people like a 59-year-old single 

mother who called my office 4 weeks ago in tears and said to my 

staff, ‘‘This morning I was told by my employer, a home health care 

provider in Albion, Michigan that I am being cut from my 38 hours 

to 28 hours because of Obamacare.’’ 

She says that, ‘‘When I have 38 hours as a home health care provider,’’ a tough job, ‘‘I also worked at a restaurant on the weekends 

to make the additional so I could pay my mortgage. I am 59 years 

old. I will probably keep my waitress job for the few hours on the 

weekend, but where am I going to get the rest of the resources to 

pay my mortgage? And then, how am I going to buy my own health 

care?’’ 

That is reality, Mr. Chairman. I applaud you for holding this 

hearing today. I applaud you for putting a panel together that 

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brought reality across the board and why this discussion, why this 

debate needs to continue. 

And I yield back. 

Chairman ROE. I thank the gentleman for yielding. 

And I will close by saying thank you all for being here. It has 

been a great discussion. You know, I have never seen a Republican 

or a Democrat heart attack in my life. I have never operated on a 

Republican or Democrat cancer in my life. It is just people who 

have these problems and we should have gotten together as a people in a bipartisan way. 

And the only thing bipartisan about the Affordable Care Act was 

the vote to not accept it. That was bipartisan. In our state, we had 

half the people who had private health insurance and then dropped 

it to get on the public system. What happened in 10 years was our 

cost tripled. 

And what happened was a democratic governor at that time, cut 

the roles. That was a very painful going through that. I remember 

that very well and also reduced the benefits because we have to 

have a balanced budget. We can’t run a budget that runs with 

these huge deficits. 

And Dr. Holtz-Eakin, I can absolutely assure you what will happen is with these very rich subsidies, employees and employers will 

figure out to drop those, and as Mr. Walberg, I have had a very 

similar experience where a server at home at a restaurant had her 

hours cut from full-time to 29 hours. This is a divorced woman in 

her 50s who had to make her own way. 

Now misses 8 hours; she will miss an entire week’s worth a 

month, and she did have an insurance policy. Now she doesn’t. And 

you are seeing that over and over and over across the country. Go 

out and talk to people. It is real out there, and I know that if you 

don’t believe that—I don’t know what all these hearings I have 

held—I have held three of them around the country—I have heard 

the same thing now for 2 years everywhere I go. 

It does not affect as much the large group and the biggest problem as Ms. Turner pointed out in health insurance in this country 

is the cost of it. If we could bring the cost down then you would 

have a much more—you would have many more people that would 

have health insurance. 

And it is a huge challenge now and one of the reasons the costs 

are so high is the regulatory burden. There is no question about 

that. I looked at the cost that added to my practice that added no 

value to the patients whatsoever, none, just more boxes for me to 

check, and if I didn’t check enough boxes, I didn’t get paid. 

So we do need to simplify this. It is a huge issue, and I agree 

with Mr. Polis, and I applaud the President for delaying this. I 

would applaud him for delaying the mandate for individuals. 

I would applaud him to overturn this entire bill and start over 

again with something that is patient-centered, where doctors and 

patients make those decisions, and get the insurance companies out 

of making those decisions and certainly get the federal government 

out of making those decisions. Put the people in charge of that back 

in charge. 

You know, it is an amazingly complex. I don’t argue with anybody who wanted to increase the coverage. And Mr. Richardson, 

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you have clearly pointed out as you have proudly so that your company has offered health insurance coverage for almost 80 years to 

your employees. 

In our practice, even before I began, over 50 years we have offered coverage. I don’t know how much longer you are going to be 

able to do that and afford to do that. And that is one of the frustrations because we want to do that, and it is the right thing to do, 

to do that to help your employees. 

I thank all of the members for being here, and I certainly thank 

all the witnesses. 

And with no further comments, the meeting is adjourned. 

[The statement of Hon. Fudge follows:} 

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[Questions submitted for the record and their responses follow:] 

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[Whereupon, at 12:08 p.m., the subcommittees were adjourned.] 

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