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THE IMPACT OF THE EMPLOYER MANDATE’S 

DEFINITION OF FULL-TIME EMPLOYEE ON 

JOBS AND OPPORTUNITIES 

HEARING 

BEFORE THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

JANUARY 28, 2014 

Serial No. 113–FC14 

Printed for the use of the Committee on Ways and Means 

( 


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COMMITTEE ON WAYS AND MEANS 

DAVE CAMP, Michigan, Chairman 

SAM JOHNSON, Texas 

KEVIN BRADY, Texas 

PAUL RYAN, Wisconsin 

DEVIN NUNES, California 

PATRICK J. TIBERI, Ohio 

DAVID G. REICHERT, Washington 

CHARLES W. BOUSTANY, JR., Louisiana 

PETER J. ROSKAM, Illinois 

JIM GERLACH, Pennsylvania 

TOM PRICE, Georgia 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

AARON SCHOCK, Illinois 

LYNN JENKINS, Kansas 

ERIK PAULSEN, Minnesota 

KENNY MARCHANT, Texas 

DIANE BLACK, Tennessee 

TOM REED, New York 

TODD YOUNG, Indiana 

MIKE KELLY, Pennsylvania 

TIM GRIFFIN, Arkansas 

JIM RENACCI, Ohio 

SANDER M. LEVIN, Michigan 

CHARLES B. RANGEL, New York 

JIM MCDERMOTT, Washington 

JOHN LEWIS, Georgia 

RICHARD E. NEAL, Massachusetts 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL, JR., New Jersey 

JOSEPH CROWLEY, New York 

ALLYSON SCHWARTZ, Pennsylvania 

DANNY DAVIS, Illinois 

LINDA SA ́ NCHEZ, California 

JENNIFER M. SAFAVIAN, Staff Director and General Counsel 

JANICE MAYS, Minority Chief Counsel 


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C O N T E N T S 

Page 

Advisory of January 28, 2014 announcing the hearing ........................................ 2 

WITNESSES 

Peter Anastos, Owner and Co-Founder, Maine Course Hospitality Group ........ 19 

Lanhee J. Chen, Ph.D., Research Fellow, Hoover Institution, Lecturer in 

Public Policy, and Lecturer in Law, Stanford University ................................. 7 

Helen Levy, Ph.D., Research Associate Professor, University of Michigan Institute for Social Research, School of Public Health, and Gerald R. Ford 

School of Public Policy ......................................................................................... 40 

Thomas J. Snyder, President, Ivy Tech Community College ............................... 36 

E. Neil Trautwein, Vice President and Employee Benefits Policy Counsel, 

National Retail Federation .................................................................................. 28 

SUBMISSIONS FOR THE RECORD 

The Honorable Sander Levin .................................................................................. 82 

The Honorable Lynne Jenkins ................................................................................ 86 

The Honorable Charles Boustany .......................................................................... 88 


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(1) 

THE IMPACT OF THE EMPLOYER MANDATE’S 

DEFINITION OF FULL-TIME EMPLOYEE ON 

JOBS AND OPPORTUNITIES 

TUESDAY, JANUARY 28, 2014 

U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON WAYS AND MEANS, Washington, DC. 

The Committee met, pursuant to notice, at 10:05 a.m., in Room 

1100, Longworth House Office Building, Hon. Dave Camp [Chairman of the Committee] presiding. 

[The advisory announcing the hearing follows:] 


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ADVISORY 

FROM THE COMMITTEE ON WAYS AND MEANS 

FOR IMMEDIATE RELEASE CONTACT: (202) 225–3625 

Tuesday, January 21, 2014 

No. FC–14 

Chairman Camp Announces Hearing on 

the Impact of the Employer Mandate’s 

Definition of Full-time Employee on 

Jobs and Opportunities 

House Committee on Ways and Means Chairman Dave Camp (R–MI) today announced that the Committee will hold a hearing on the impact of the Affordable 

Care Act’s (ACA) employer mandate, which defines full-time employment as 30 

hours per week for the purposes of applying the employer mandate. The Committee 

will hear testimony from a broad cross section of industries affected by the rule. 

The hearing will take place on Tuesday, January 28, 2014, in 1100 Longworth House Office Building, beginning at 10:00 a.m. 

In view of the limited time available to hear from the witnesses, oral testimony 

at this hearing will be from invited witnesses only. However, any individual or organization not scheduled for an appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record. 

BACKGROUND: 

The ACA imposes a requirement that employers with more than 50 full-time employees (FTEs) offer health coverage to their workers or be subject to one of two new 

penalty taxes. First, employers that do not offer qualified health insurance and have 

at least one employee receiving a tax credit for insurance through the Exchange are 

subject to a $2,000 penalty tax for each FTE in excess of the first 30. Second, employers who offer insurance that fails to meet the Federal Government’s standard 

for affordability are required to pay a penalty tax for every employee who receives 

a tax credit to purchase coverage through the Exchange. This penalty tax will equal 

the lesser of (1) $3,000 per employee who receives subsidized coverage in the Exchange or (2) the penalty tax the employer would have to pay if it did not offer 

health insurance (described above). 

Prior to the enactment of the ACA, it was common practice for employers to use 

40 hours as the definition of a full-time employee. However, under Internal Revenue 

Code section 4980H, enacted by the ACA, an FTE is defined as an employee who 

works at least 30 hours per week. Some commentators have expressed concern that 

this rule has created an incentive for employers to limit the number of employees 

whose hours exceed 30 hours per week because the penalty taxes applied are calculated based, in part, on the number of employees who exceed 30 hours. Industries 

that employ lower skill workers, and often provide entry-level opportunities for 

younger workers, are disproportionately affected by the 30-hour rule. For example, 

employers in the restaurant, franchise, home health, movie theater, retail and grocery industries have been reported to have reduced or are planning to reduce hours 

for their part-time workers as a result of the 30-hour rule. Additionally, school districts, community colleges and universities have reduced work hours for students, 

adjunct professors and support staff. 

Today, more than 159 million Americans receive health coverage from their employers, making employer-sponsored insurance (ESI) the largest single source of private health coverage. Yet, not all businesses have the resources to provide coverage 

to their employees, and not all employees seek jobs for the sole purpose of receiving 

ESI. 


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While the Treasury Department has suspended enforcement of the employer mandate for 2014, the mandate and associated penalty taxes come into effect on January 

1, 2015. 

In announcing the hearing, Chairman Camp stated, ‘‘Washington should be removing obstacles to individuals finding full-time work, not creating them. 

Instead, ObamaCare imposes large and disproportionate costs on employers and has created a new class of employees, the ‘ObamaCare 29ers.’ Many 

of these people have either lost or risk losing their full-time status and are 

being held back through no fault of their own but instead by a misguided 

law. As a result, they will see fewer hours and lower wages, and that is the 

opposite of the direction we need to be going to make our economy stronger for families and job creators.’’ 

FOCUS OF THE HEARING: 

The hearing will focus on the employer mandate and the so-called 30-hour rule 

of the Affordable Care Act. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee 

website and complete the informational forms. From the Committee homepage, 

https://waysandmeans.house.gov, select ‘‘Hearings.’’ Select the hearing for which you 

would like to submit, and click on the link entitled, ‘‘Click here to provide a submission for the record.’’ Once you have followed the online instructions, submit all requested information. ATTACH your submission as a Word document, in compliance 

with the formatting requirements listed below, by the close of business on Tuesday, February 11, 2014. Finally, please note that due to the change in House mail 

policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings. For questions, or if you encounter technical problems, please call 

(202) 225–1721 or (202) 225–3625. 

FORMATTING REQUIREMENTS: 

The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. 

The Committee will not alter the content of your submission, but we reserve the right to format 

it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response 

to a request for written comments must conform to the guidelines listed below. Any submission 

or supplementary item not in compliance with these guidelines will not be printed, but will be 

maintained in the Committee files for review and use by the Committee. 

1. All submissions and supplementary materials must be provided in Word format and MUST 

NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised 

that the Committee relies on electronic submissions for printing the official hearing record. 

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. 

Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material 

not meeting these specifications will be maintained in the Committee files for review and use 

by the Committee. 

3. All submissions must include a list of all clients, persons and/or organizations on whose 

behalf the witness appears. A supplemental sheet must accompany each submission listing the 

name, company, address, telephone, and fax numbers of each witness. 

The Committee seeks to make its facilities accessible to persons with disabilities. 

If you are in need of special accommodations, please call 202–225–1721 or 202–226– 

3411 TDD/TTY in advance of the event (four business days notice is requested). 

Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above. 

Note: All Committee advisories and news releases are available on the World 

Wide Web at http://www.waysandmeans.house.gov

f 

/. 


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Chairman CAMP. Good morning. This hearing will come to 

order. 

Less than 7 months ago, the Administration announced that they 

would delay the employer mandate for a year. They acknowledged 

what many had been saying since the law passed, the employer 

mandate is bad for business and, in turn, bad for American workers. 

While the Administration offered a brief reprieve from the employer mandate, the pain ObamaCare is inflicting both on job creators and hardworking Americans is only getting worse. 

As the President prepares to deliver his State of the Union 

speech tonight, he will likely and appropriately discuss pressing 

issues facing millions of Americans such as unemployment, education, and economic opportunity. However, what we will be missing is the admission that the President’s signature policy achievement is forcing Americans to lose their jobs, have their wages cut, 

and taking educators out of the classroom. 

The law is increasing costs for families and individuals already 

struggling in this economy. Specifically, the 30-hour rule in the 

healthcare law, which is the topic of the hearing today, is forcing 

employers to make the tough decision of cutting hours and workers 

and preventing them from growing their businesses. 

The people hit the hardest by the law are not bankers, lawyers, 

and doctors. They are the single mothers working a restaurant job, 

the college students paying for their own education by working at 

the local grocery store, or the firefighters living down the street. 

In fact, a report by the University of California at Berkeley Center for Labor Research and Education concluded, and I quote, 

‘‘Those at highest risk are workers in predominately low-wage industries that are right on the cusp of what is considered full-time 

work under the law.’’ These are Americans living paycheck to paycheck, who are already paying more for food and more for their 

health care, and are now being hurt again by the burdens of the 

President’s healthcare law. 

According to a new Hoover Institution study, the 30-hour rule 

will affect over 2.6 million workers making, on average, under 

$30,000 per year, and almost 90 percent of those impacted do not 

have college degrees. I am sure every Member that sits here today 

has heard stories from families who have had their hours cut and 

are now forced to make tough financial decisions. 

A faculty member at a community college in my district wrote to 

me recently and said, and I am quoting here, ‘‘I hold two part-time 

positions. Today I was informed I cannot continue to do both jobs 

because of ObamaCare laws. Beginning in August, I will no longer 

be advising and will lose approximately a third of my income. Last 

year I bought a house, a house I now fear I will no longer be able 

to afford.’’ 

Another one of the people I represent in Michigan told a story 

of struggling to find a job as a result of the law, writing, and I am 

quoting here, ‘‘I am currently unemployed and seeking work in our 

greater mid-Michigan area. After looking for employment for some 

time now, I have discovered I have a common theme among many 

hiring companies in the area—part-time work positions only available. From what I understand, many employers are now reducing 


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hours, changing full-time positions into multiple part-time staffing, 

as to avoid the ACA.’’ 

I hope today we can move past the denials that this law does not 

have an effect on jobs. When I read story after story of how the 30- 

hour rule is cutting hours for adjunct professors, cutting hours for 

part-time firefighters, for hourly workers, and for low-income 

Americans struggling to make ends meet, it is hard to deny the reality that this law is hurting average Americans. The White House 

does not want to believe it, but we need to understand that the 

problem is real. 

Republicans are working toward solutions so hardworking Americans do not have to worry about their hours and wages being cut 

as a result of ObamaCare. Todd Young’s legislation, the Save 

American Workers Act, would repeal the 30-hour definition of fulltime employment and restore the traditional 40-hour definition so 

we can have more Americans working full-time jobs. 

Getting Americans working again, or at least restoring the number of hours they used to be able to work, should not be a partisan 

issue. Both parties should be able to come together to ensure that 

we remove barriers to job growth and wage increases. The best 

thing we could do is repeal the entire law, but that cannot and 

should not deter us from looking at specific pieces of the law, which 

is what we will do today. 

Before I recognize Ranking Member Levin for the purposes of an 

opening statement, I ask unanimous consent that all Members’ 

written statements be included in the record. And without objection, so ordered. 

I now recognize Ranking Member Levin for his opening statement. 

Mr. LEVIN. Thank you very much, and welcome. If I might, a 

special welcome to Dr. Levy from the University of Michigan. Mr. 

Camp and I have a special hello to you. 

Chairman CAMP. Yes. 

Mr. LEVIN. Today this Committee is holding a hearing on an 

issue that has been rehashed many times. Yet it has failed to have 

a single hearing on an issue also in our jurisdiction that already 

has directly affected the lives of 1.6 million people, their total loss 

of unemployment insurance. 

A small percentage of employers, less than 1 percent, will be affected by the employer responsibility provision in the ACA. But 

more than 1.6 million long-term unemployed are facing right now 

the loss of their benefits, their cars, their homes. 

I met last week at home with 25 long-term unemployed workers 

to hear their stories. One of them, Josie Masano of Saint Clair 

Shores, Michigan, is here today and will be my guest at the State 

of the Union tonight. 

This hearing should be for us listening to her story and the stories of so many others, including that just mentioned by our Chairman. Instead, we are here today so that the majority can continue 

its endless pursuit of undermining a law that is already helping 

millions and is here to stay. 

Today the majority brings us together to discuss the impact of 

ACA on jobs, employers, and the economy. Here is what they are 

unlikely to say. 


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First, a very small percentage of employers, less than 1 percent, 

will be affected by the so-called employer mandate provision within 

the law. Not only does it apply to businesses with 50 or more employees, making 95 percent of businesses exempt, all but 5 percent 

of businesses with more than 50 employees already offer their employees health insurance. 

Providing employee coverage is both economic and a standard of 

business practice for businesses with more than 50 employees. In 

fact, this is why we use 50 employees as the cutoff for an exempt 

small business. It has been that way for years, and few expect that 

to change as a result of ACA. 

Indeed, a recent survey found that 99 percent of employers will 

continue to offer coverage. In a real-world experience, that shows 

that employer-sponsored insurance in Massachusetts has increased 

since the State reforms. 

Second, since the Affordable Care Act was signed into law 4 

years ago, private employers have added more than 8 million jobs. 

More than 90 percent of the rise in employment nationwide has 

been due to workers in full-time jobs. 

In fact, workers in the restaurant industry have seen their average weekly hours increase since the law was signed, contrary to the 

notion that there has been a widespread shift to reduce hours in 

that sector. Those who have threatened to cut hours in response to 

the law have been making such threats more than a year before 

the law was in effect. 

Third, the Affordable Care Act is good for individuals who have 

dreamed of starting their own business or taking the risk to change 

jobs and help grow a small business. These entrepreneurs, like the 

3 million people who have enrolled now, can get private health insurance through the Federal- and State-based marketplaces. 

But, unfortunately, for 1.6 million job-seeking Americans, the 

last time this full Committee met for a hearing on a topic other 

than the Affordable Care Act was on July 18, 6 months and 10 

days ago. Hope springs eternal that this Committee can restore its 

focus to the broad range of issues under our jurisdiction, which 

have the power to create economic growth and opportunity for our 

Nation and all our citizens. Thank you. 

Chairman CAMP. Thank you, Mr. Levin. 

I now want to welcome our panel of witnesses. First, I would like 

to welcome Lanhee J. Chen, a Research Fellow for the Hoover Institution at Stanford University. Second, we will hear from Peter 

Anastos, the owner and co-founder of the Maine Course Hospitality 

Group. 

Third, we will hear from Neil Trautwein, Vice President and Employee Benefits Policy Counsel at the National Retail Federation. 

Fourth, we will hear from Thomas J. Snyder, the President of Ivy 

Tech Community College. And, finally, we will hear from Helen 

Levy, a Research Associate Professor at the University of Michigan. 

Thank you all for being with us today. The Committee has received each of your statements. They will be made part of the formal hearing record. Each of you will be recognized for 5 minutes 

for your oral testimony and, Mr. Chen, we will begin with you. 

You are recognized for 5 minutes. 


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STATEMENT OF LANHEE J. CHEN, PH.D., RESEARCH FELLOW, 

HOOVER INSTITUTION, LECTURER IN PUBLIC POLICY, AND 

LECTURER IN LAW, STANFORD UNIVERSITY 

Mr. CHEN. Thank you, Mr. Chairman. Good morning. 

Mr. Chairman, Ranking Member Levin, and Members of the 

Committee, thank you for the invitation to appear before you today 

to discuss the Affordable Care Act and the impact of its employer 

mandate’s definition of full-time employee on jobs and opportunities. My name is Lanhee Chen. I am a Research Fellow at the Hoover Institution, a Lecturer in Public Policy, and a Lecturer in Law 

at Stanford University. 

The Affordable Care Act, as a whole, creates significant disincentives for businesses to grow and hire workers, and no element of 

the law is more onerous in this regard than its employer mandate. 

And within the mandate, no provision is more controversial or 

more harmful to workers who can least afford it than the law’s definition of a full-time employee as someone who works an average 

of 30 hours per week. 

This seemingly small provision creates large incentives for employers to reduce the hours of employment for some workers. I 

argue that the 30-hour rule is harmful for three reasons, and I will 

briefly discuss each of these arguments. 

First, the 30-hour rule hurts precisely those workers who can 

least afford to be hurt. Second, it creates additional costs and administrative complexities for employers which will prevent them 

from growing their businesses. And, finally, it uniquely hurts educational opportunities by adversely affecting both workers and students in school districts, colleges, and universities. 

First, the ACA’s 30-hour rule adversely affects those who can 

least afford to be hurt. Currently, 7.8 million Americans are working part-time but want full-time work. Indeed, the 30-hour rule 

makes it more unlikely that these Americans can get the jobs they 

want and need. 

Chairman Camp mentioned earlier a study from the University 

of California at Berkeley which found that about 2 million Americans are part of a vulnerable population to have their hours reduced as a result of the ACA’s 30-hour rule. My colleagues and I 

at the Hoover Institution recently updated and refined this study 

to conclude that 2.6 million Americans are in danger because of the 

30-hour rule. 

Our research also found that the 30-hour rule disproportionally 

harms women, those without a college degree, young Americans, 

and the poor. The industries most likely to be harmed are workers 

working in the retail trade, restaurants, accommodation, building 

services, and nursing homes. 

This matches up, indeed, with the anecdotal information we are 

receiving from employers. One media outlet reported in December 

of 2013 that 388 employers have already restricted work hours to 

below 30 hours per week because of the ACA’s 30-hour rule. 

Notable examples include Sea World Entertainment, David’s 

Bridal, several Subway Restaurants franchisees, and Lands’ End. 

Regal Entertainment Group, which operates more than 500 movie 

theaters across 38 States, cut hours for non-salaried workers to 

stay below the 30-hour threshold. 


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And, indeed, this phenomenon is not limited to the private sector. In the public sector, municipalities and States, from my home 

State of California, in Long Beach, to your home State, Mr. Chairman and Ranking Member Levin, of Michigan, the City of Auburn 

Hills, have reduced the number of hours for part-time employees 

in order to deal with the ACA’s 30-hour rule. 

Second, the ACA’s creation of a separate rule governing the definition of a full-time employee creates added administrative complexities and costs for employers. These added costs and complexities may create disincentives for hiring and growth. 

The 30-hour rule creates additional health benefit costs for employers. Indeed, those employers who currently offer health insurance to all of their full-time employees and intend to continue 

doing so will face added costs. And given the individual mandate 

and what we expect to be higher premiums on the exchanges, employers may see many of their employees opting for health insurance, further raising their costs. 

Employers also face significant new recordkeeping and reporting 

requirements in complying with the 30-hour rule. Regulatory guidance issued recently by the Internal Revenue Service mandates 

complicated calculations and recordkeeping regarding an employee’s hours of service. 

The rules differ by whether employees are new or ongoing, and 

in the case of new employees, whether they are expected to work 

full-time or are variable or seasonal employees. Even those employers that provide health coverage to all of their full-time employees 

are now required to track and record those hours of service in a 

way that is potentially onerous and complicated. 

Finally, the 30-hour rule must be addressed because of the negative impact it has on school districts, colleges, and universities. Indeed, about 225,000 workers in the educational industry face having their hours cut because of the ACA’s 30-hour rule, and a recent 

analysis revealed that 100 school districts alone, including dozens 

in Indiana, have either cut worker hours or outsourced jobs to deal 

with the ACA’s employer mandate. 

In sum, Mr. Chairman, the 30-hour rule in the Affordable Care 

Act has impacts that reach far beyond our healthcare system. Its 

negative effect on jobs and economic opportunities are of greatest 

concern to me. 

Mr. Chairman, Ranking Member Levin, and Members of the 

Committee, I look forward to your questions. 

[The prepared statement of Mr. Chen follows:] 


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Chairman CAMP. Thank you very much, Mr. Chen. 

Mr. Anastos, you are recognized for 5 minutes. 

STATEMENT OF PETER ANASTOS, OWNER AND CO-FOUNDER, 

MAINE COURSE HOSPITALITY GROUP 

Mr. ANASTOS. Chairman Camp, Ranking Member Levin, and 

Members of the Committee, thank you for the opportunity to testify 

before you today on the impact of the employer mandate’s definition of full-time employee on jobs and opportunities. My name is 

Peter Anastos, and I am an owner and co-founder of Maine Course 

Hospitality Group, which owns, operates, and manages a dozen hotels in northern New England. 

We currently have three new hotels under construction, two of 

which are owned by others, in Bangor and Portland, Maine, and 

Burlington, Vermont. Our portfolio includes Marriott and Hiltonbranded hotels, which we operate under franchise agreements, as 

well as two independent hotels. Approximately 300 people are currently employed by MCHG, which will expand to over 500 people 

in the next 18 months. I appear here today on behalf of Maine 

Course Hospitality Group and the International Franchise Association. 

As a large employer under the Affordable Care Act, my business 

is already at a disadvantage compared to smaller hotels, which are 

not required to offer health coverage to employees. Before the Affordable Care Act passed, we had a health benefits plan in place 

that offered coverage to any employee working 30 hours or more 

per week, and I plan to continue to offer that same plan with the 

same eligibility requirements. 

You might wonder why I am here today to speak in opposition 

to a mandate that I followed before it was codified into law. The 

answer is that, combined with other harmful aspects of the employer mandate, this definition of full-time employee is what is 

going to more than double, in fact maybe even triple, my costs in 

the next year alone. Businesses such as mine will have far less 

funds available to expand their businesses, which would have created opportunities for employers and employees alike. 

Beginning this year, individuals who do not obtain coverage will 

be subject to a tax penalty under the individual mandate. As the 

tax penalty increases in the coming years, more of my eligible employees will enroll in the company plan. 

We are taking on more costs per insured employee than ever before, and we are insuring more employees than ever before. My employees are now forced to choose between enrolling in an expensive 

employer health plan or enrolling in a plan in the health insurance 

marketplace without the assistance of a premium tax credit. 

Many of my competitors have already made significant workforce 

changes in order to manage costs under the law. Those that are 

large employers are reducing hours of variable-hour employees to 

less than 30 hours per week so as to avoid employer mandate requirements. As a result, my competitors will be able to offer lower 

prices to customers and guests. 

I realize that if the threshold were raised to 40 hours, some employers may simply lower their employees to 39 hours or fewer. But 

I would submit that losing 1 hour of work and going into an exVerDate Sep 11 2014 06:36 Nov 29, 2016 Jkt 021118 PO 00000 Frm 00023 Fmt 6633 Sfmt 6602 I:\WAYS\WAYSPS\21118\21118.XXX 21118

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change is not nearly as bad as losing 11 hours of work, 271⁄2 percent of your work, and going into an exchange. 

We refuse to do that to our business or our workers, so our only 

option is to work within the law while advocating for commonsense changes that make the law more workable for small business 

owners. 

Keeping these priorities in mind, one option I have is to keep my 

workers who currently work 30 hours per week or more at or above 

that mark, while keeping my workers currently below 30 hours per 

week below that mark. This will create a division in my workforce 

that any smart manager would like to avoid. We want to reward 

our best workers with extra hours, and this is a perverse incentive 

not to do that. 

As we build new hotel locations in Maine and Vermont this year, 

we will most likely bring on employees that will work below 30 

hours per week initially. While this situation is not ideal for hiring 

the best workers, it is all I can do to keep myself in business while 

maintaining my commitment to my current employees. 

Although the White House maintains that the Affordable Care 

Act does not increase part-time work, a recent study of franchise 

owners by the International Franchise Association revealed that 31 

percent of franchise owners have already reduced work hours and 

27 percent have already replaced full-time workers with part-time 

ones, a full year before the employer mandate is set to take effect. 

With fewer hours and less take-home pay, workers who have had 

their hours cut are not only ineligible for employer-sponsored coverage, they are also less able to afford their own coverage. 

For decades employers have used the 40-hour workweek as a 

standard for workforce management. The ACA’s provision requiring employers to provide coverage to full-time employees and defining a full-time workweek as 30 hours will cause many employers 

to simply manage their employees to fewer hours. 

Not only has the employer mandate discouraged job creation and 

business expansion, it has also damaged existing jobs by including 

a misguided statutory requirement that discarded more than half 

a century of established labor policy. Even though the employer 

mandate has been delayed for 1 year, key changes are still necessary to help franchises and other small businesses implement the 

law. 

Several pieces of legislation have been introduced to redefine the 

full-time employee as one who works at least 40 hours per week. 

The Forty Hours Is Full Time Act and Save American Workers Act 

will accomplish this goal. 

I believe that if some key changes are made, employers will shift 

their attention from trying to find ways around the employer mandate to trying to find ways to maintain financial stability while offering coverage to deserving workers. 

Thank you for the opportunity to testify before you today, and I 

look forward to any questions you may have. 

[The prepared statement of Mr. Anastos follows:] 


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Chairman CAMP. Thank you, Mr. Anastos. 

Mr. Trautwein, you are recognized for 5 minutes. 

STATEMENT OF E. NEIL TRAUTWEIN, VICE PRESIDENT AND 

EMPLOYEE BENEFITS POLICY COUNSEL, NATIONAL RETAIL 

FEDERATION 

Mr. TRAUTWEIN. Thank you, Chairman Camp, Ranking Member Levin, and honored Members of the Committee. Good morning. 

I appreciate the opportunity to appear before you this morning to 

discuss our continuing concerns regarding ACA implementation, 

and more specifically, the 30-hour rule for determining full-time 

employment. 

NRF is the world’s largest retail trade association, representing 

retailers large, small, and in between, chain restaurants, grocers, 

and internet retailers. Retail is the Nation’s largest private sector 

employer, supporting one in four U.S. jobs, 42 million working 

Americans. 

We believe that it is long past time to address specific problems 

with the ACA like the 30-hour definition. NRF will work with anyone willing to make changes to this law beneficial to the industries 

we represent and the employees of those companies. 

We do credit the regulatory agencies for working hard and fairly 

cooperatively to implement the provisions. The Administration 

early on focused on our industries because of the frequently variable nature of retail employment. 

Many employees do not fit neatly into full- and part-time categories. Compliance will be particularly challenging. This segment 

of our workforce tends to be more mobile and changes jobs frequently. Sometimes they work for multiple establishments. So compliance is particularly challenging. 

Many of the regulatory approaches developed in response to the 

challenges of our workforce, such as the look-back and stability period approach developed by the Department of Treasury, have in 

turn bred additional complexity. One truly significant challenge is 

the ACA’s definition of full-time for coverage eligibility at 30 hours 

per week on average. 

NRF strongly supports the bipartisan interest in this issue and 

legislation like H.R. 2575, the Save American Workers Act. We respectfully urge that this bill, and others to address specific shortcomings in the ACA, be enacted sooner than later. Later may be 

too late. 

Changing the 30-hour definition is common sense. If asked, most 

Americans would assume full-time to be 40 hours per week. A 30- 

hour definition forces retailers to manage to an unfamiliar standard, whether somebody is working to 40 hours or whether somebody is above or below 30 hours per week. 

Retail and chain restaurants will be forced to fine-tune the balance between full- and part-time, focusing on employee status on 

a realtime basis. For variable-hour employees who do not meet the 

new full-time standard, this will mean less income in their pockets, 

and consequently, less likelihood of obtaining coverage on their 

own. 

Retailers are considering their options in advance of 2015. But, 

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ready started on January 1st if they had a 1-year look-back. Ultimately, it will be the existing part-time workforce, of great importance to the industries I represent, that will feel the greatest effect 

of the 30-hour definition. 

Again, NRF greatly appreciates the opportunity to appear before 

you today. We strongly urge this Committee and the Congress to 

consider specific changes to the ACA, including the definition of 

full-time employment. 

It is in our best interest to keep our employees healthy and at 

work, but not at any cost. The ACA will, at a minimum, pressure 

our ability to continue to provide coverage and help drive positive 

change in the workforce. 

We hope to work with you to help make the ACA more workable 

so long as it remains the law of this land. Thank you. 

[The prepared statement of Mr. Trautwein follows:] 


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Chairman CAMP. Thank you, Mr. Trautwein. 

I would now recognize the gentleman from Indiana, Mr. Young, 

for the purposes of introducing our next witness. 

Mr. YOUNG. Thank you, Mr. Chairman. It is my honor and 

pleasure today to welcome to this Committee a fellow Hoosier. Tom 

Snyder is President of Ivy Tech Community College, our statewide 

community college system, which is the largest of its kind in the 

country. President Snyder has been in his role since 2007, leading 

Ivy Tech. They have more than 200,000 students in our State, 30 

campuses, and 100 learning centers. 

Tom, I thank you for coming here today to testify, and look forward to hearing how this new definition of full-time is affecting our 

adjunct professors and the students you serve. I yield back. 

Chairman CAMP. Thank you. Mr. Snyder, you are recognized for 

5 minutes. 

STATEMENT OF THOMAS J. SNYDER, PRESIDENT, 

IVY TECH COMMUNITY COLLEGE 

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

speak with you on behalf of Ivy Tech and our 200,000 students and 

nearly 8,000 faculty and staff. We also want to thank you, Chairman Camp and Ranking Member Levin, for scheduling the hearings on this important matter. 

And, separately, we would like to thank Representative Young, 

along with Representative Kind and Representative Paulsen, for 

sponsoring the bill to repeal the medical device tax, with the goal 

of protecting thousands of very high-paying jobs, not only in Indiana but across America. 

As you have stated, Mr. Chairman, we must be working together 

to remove obstacles for individuals seeking full-time work. Our 

focus at Ivy Tech, as it is for community colleges all across the 

country, is to prepare students for future careers. 

The community college structure, unique to the United States, is 

our country’s most affordable and accessible option to higher education. If we are to close the global attainment gap, we must do all 

we can to keep it both affordable and accessible. 

Indiana, as was said, has one statewide community college, the 

largest system in the country, with campuses across the State. We 

are open admission, with a wide variation in college preparedness. 

We have some students entering right after high school. Others are 

doing a career change and entering at age 30 or 40 or 50 or even 

older. 

Of Indiana’s public colleges, among them, Ivy Tech has more 

than one-half of all Pell Grant recipients, and Ivy Tech has more 

than one-half of all African Americans in public colleges. For many 

of these students, Ivy Tech is their best chance in life to get an 

education needed for today’s workforce. And I would argue that the 

community college system is more critical than most any other institution in rebuilding America’s middle class. 

One of our keys to this success is our adjunct faculty team of 

more than 4,500. Most are practitioners in their field, working fulltime in another job, bringing their real-life, realtime experiences to 

the classroom. Moreover, these adjuncts are very often the individuals that we would consider for full-time positions. In fact, over the 


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last 4 years, we have placed more than 500 adjuncts into full-time 

faculty or staff positions. 

I also want to be very clear that we are firm supporters of ensuring Americans have broader access to health care. However, I want 

to highlight a couple serious issues related to the 30-hour rule. We 

are very pleased that this bill authored by Congressman Young will 

bring some clarity and a possible solution to the 30-hour problem. 

The Affordable Care Act has caused us to reevaluate teaching 

hours for our adjunct faculty. We have done this with very limited 

guidance. Like most community colleges, our funding does not provide for any large unfunded mandate such as the ACA 30-hour 

rule. 

The annual impact on us would be $10- to $12 million, with a total statewide healthcare bill today of $25 million, so a 50 percent 

increase. The penalty provisions we could face for exceeding 30 

hours, knowing we have thousands of adjuncts all over the State, 

is not an option we could even consider. 

Moreover, a very little-known effect is the IRS has said preparation time must be considered. We are just not sure how to factor 

in preparation time for 4,500 adjuncts or what other aspects must 

be included in this determination. So, to be cautious, we have limited the hours that adjunct faculty can teach. 

All of this results in having to find more adjunct faculty to meet 

student demand, which really results in another challenge, the lack 

of additional credentialed faculty, causing classes to be canceled 

and students turned away. 

The uncertainty of implementing the 30-hour rule has impacted 

colleges across the country, but none more dramatically than the 

community college system. The end result may be less student access and the inability of faculty to stay with one college. Some of 

our adjuncts have taken positions at other institutions to fill the 

financial gap, inadvertently reducing the exposure to full-time faculty opportunities in the future. 

If, as proposed, 40 hours would be the measurement for full-time, 

it would allow institutions much more flexibility. We would still 

need further guidance and clarity on how to treat hours such as 

preparation time, a very difficult issue. But we would be able to 

manage the process much easier than today. 

This is a critical discussion. This is about ensuring that we are 

able to provide the best educational product at Ivy Tech while protecting the jobs of our adjunct faculty. At Ivy Tech, we strive to 

have the right resources in the right place to educate hundreds of 

thousands of Hoosiers for the jobs of the future. Thank you for the 

opportunity to speak with you. 

[The prepared statement of Mr. Snyder follows:] 


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Chairman CAMP. Thank you, Mr. Snyder. 

Ms. Levy, you are recognized for 5 minutes. 

STATEMENT OF HELEN LEVY, PH.D., RESEARCH ASSOCIATE 

PROFESSOR, UNIVERSITY OF MICHIGAN INSTITUTE FOR 

SOCIAL RESEARCH, SCHOOL OF PUBLIC HEALTH, AND 

GERALD R. FORD SCHOOL OF PUBLIC POLICY 

Ms. LEVY. Chairman Camp, Ranking Member Levin, and Members of the Committee, thank you for the opportunity to speak with 

you today. My name is Helen Levy. I am an economist at the University of Michigan with appointments at the university’s Institute 

for Social Research, School of Public Health, and Gerald R. Ford 

School of Public Policy. I am addressing you today not on behalf 

of the university but as a researcher with expertise in health insurance and labor markets. 

As we’ve heard, there is considerable concern that the 30 hours 

requirement in the Affordable Care Act could create an incentive 

for employers to keep their workers’ hours below 30. Research suggests that this concern has been overstated and that one proposed 

change, increasing the full-time threshold to 40 hours, would actually make the problem much worse. The best evidence we have on 

the labor market impact of an insurance mandate with an hours 

threshold comes from Hawaii where all employers have been required since the mid-1970s to provide coverage to employees who 

work 20 hours or more per week. A recent study shows that if you 

compare Hawaiian workers to the rest of the U.S., you see that the 

result of this mandate has been an increase in employer-sponsored 

health insurance, no significant effect on overall employment, and 

a small increase in the probability of part-time work in Hawaii 

compared to the rest of the U.S. 

The effect on part-time work represents an increase of 1.4 percentage points in the fraction of employment that is part-time. To 

put that number in perspective, currently about 19 percent of the 

U.S. workforce is part-time. This is a small fact relative to the size 

of the labor market. But concern about potential cutbacks in hours 

because of the ACA’s 30-hour rule have led some to propose shifting the cutoff to 40 hours instead. This approach would actually 

make the potential problem much worse. Here’s why. 

There are many more uninsured workers near the 40-hour 

threshold than near the 30-hour threshold. Three recent independent studies have all looked at this issue and reached the same 

basic conclusion. If you think about the number of workers who are 

potentially at risk of having their hours cut and you look just about 

30 hours, as Mr. Chen described in his testimony, there are, according to his calculations, about 21⁄2 million of these vulnerable 

workers right around the 30-hour threshold. Other studies have 

put the number a little bit lower, around 850,000. 

But the point is that, if you look at how many of these vulnerable 

workers are near the 40-hour threshold, if you move the threshold, 

there are about three times as many workers who would be vulnerable at the higher level because there are just so many more workers who work 40 hours than 30 hours. So the bottom line effect of 

changing the full-time threshold to 40 hours would be to place 

many more uninsured workers potentially at risk of having their 


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hours cut. This change would also increase Federal spending on 

Medicaid and on premium tax credits. 

Thinking beyond the 30-hour rule, we might also ask how the 

coverage provisions of the ACA as a whole are likely to affect the 

labor market. The best research on this question comes from Massachusetts, where comprehensive reform similar to the Affordable 

Care Act was implemented in 2007. The evidence from Massachusetts is clear. There has been no decline in employment or hours 

relative to neighboring States, even in industries that are generally 

low-wage, such as accommodation, food services, and retail. 

It is also important not to overlook the fact that healthcare reform is likely to have important benefits for labor markets, largely 

by alleviating the problem of job lack. If you can get affordable insurance without working full-time for a large firm, this makes it 

easier for entrepreneurs to start their own businesses, as Mr. Levin 

mentioned. It also makes it easier for parents of young children or 

workers nearing retirement to choose part-time work without worrying about not being able to get health insurance. 

The Congressional Budget Office has projected that the Affordable Care Act would reduce employment in 2021 by about one-half 

of 1 percent. If this were an estimate of the increase in the number 

of individuals unemployed as a result of the ACA, that would be 

alarming indeed, but this is not the correct interpretation of CBO’s 

projection. CBO is very clear that most of this effect is due to 

changes in labor supply, things like the older workers cutting back 

on the hours, and not labor demand, which is things like firms limiting their workers’ hours. From an economic perspective or from 

the perspective of common sense, it is inaccurate to characterize 

these voluntary reductions in labor supply as job-killing. 

In conclusion, the best research we have suggests that the ACA 

is likely to have very little effect on labor demand relative to the 

size of the labor market, and it is likely to have significant positive 

effects, as well. I thank you for your attention, and I look forward 

to answering any questions you may have. 

[The prepared statement of Ms. Levy follows:] 


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Chairman CAMP. Thank you, Ms. Levy, and thank you all for 

your testimony this morning. 

Mr. Chen, I’d like to try to quantify the impact this rule can have 

on an individual worker. For example, if a restaurant worker normally works 36 hours and the ACA reduces him to 29, they’ve lost 

7 hours per week. And, according to the Bureau of Labor Statistics, 

this worker has an average wage of $13.66 per hour. So, my calculations are that, because of ObamaCare, this worker just took the 

equivalent of a 20 percent pay cut. My question is how does the 30- 

hour rule impact a part-time firefighter? There are reports that 

many local communities are cutting back or planning to cut back 

the hours of part-time firefighters as a result of the ACA. 

Mr. CHEN. Mr. Chairman, the 30-hour rule has a significant impact on someone like a part-time firefighter. A firefighter earns an 

average of about $22 an hour. If the part-time firefighter works 39 

hours a week, he or she will earn $848. If the firefighter’s hours 

are cut back to 29, he or she would lose about $217, which is 

roughly a 30 percent pay cut. If the hours are cut from 35 to 29, 

the firefighter’s looking at roughly a 17 percent pay cut. So, obviously, the incentive to reduce those hours would be particularly 

damaging for the part-time firefighter. 

Chairman CAMP. I think it’s really an example of how complicated the 30-hour rule really is and how misguided it is in application. The Administration has said that they’re going to fix this 

for volunteer firefighters, which is certainly welcome. But we still 

have not seen any actual regulations or any details on how they 

plan to do that. But many local communities employ part-time firefighters, and in many cases they’re second jobs. So they’re not 

doing it for the health care. They are individuals who are taking 

on this very dangerous work. And many communities use part-time 

firefighters for different reasons. Sometimes they’re needed for 15 

hours; sometimes they’re needed for 35 hours, and it often can’t be 

predicted. 

So the rule—this rule is forcing local communities who can’t afford to offer health insurance to them to pose a very rigid schedule, 

which may not be in line with the needs of the community. And 

I just want to mention what the fire chief for the Grand Traverse 

Metro Emergency Services Authority said in northern Michigan 

just last month, and I’m quoting. ‘‘We’re going to have to find the 

money somewhere or do more with less on the fire scene. And I 

don’t think any of us have that luxury. The last thing I want to 

say to an employee is, ‘You’ve met your hours for the week. You 

can’t come on an emergency.’ Not only would that hurt them, but 

it would hurt us as we need those people to respond on calls.’’ 

So, Mr. Chen, in your testimony you referenced new research by 

the Hoover Institute. The research shows this rule impacts 2.6 million Americans, 89 percent of whom don’t have a college degree, 

and have a median income of under $30,000. Could you explain in 

more detail who this population is and why the 30-hour rule hits 

lower income Americans so much harder than the rest of the population? 

Mr. CHEN. The research that we’ve conducted is an update of 

the study from the University of California Berkeley, and we take 

the same definition of a vulnerable population that they do. One 


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can quibble with that definition, but we’ve decided simply to update it. The definition of a vulnerable worker—someone between 

the ages of 19 to 64, currently working between 30 and 36 hours, 

family income below 400 percent of Federal poverty, which would 

make them eligible for the subsidies, the cost-sharing subsidies in 

the Affordable Care Act, and who do not currently receive health 

insurance from their employers. 

When you take all of that data and you crunch the numbers, 

what you end up with, as you said, Mr. Chairman, is approximately 2.6 million workers who are in danger of having their hours 

cut. That’s approximately 3 percent of the U.S. workforce. 

With respect to why it’s particularly dangerous for these individuals, Mr. Chairman, it’s because of the fact that they are at an income level which is highly vulnerable. There is some discussion 

about moving to the 40-hour threshold and the impact that would 

have. The reality is you’re looking at different categories of workers. At the 30-hour threshold the worker is far more vulnerable 

from an income perspective than at the 40-hour threshold. Therefore, the vulnerable population clearly is one that the ACA’s 30- 

hour rule has the potential to hit quite hard. 

Chairman CAMP. All right. Thank you. I now recognize Ranking 

Member Levin for his questions. 

Mr. LEVIN. Thank you and welcome. Let me just read something 

from an analysis of the Center on Budget and Policy Priorities. And 

I ask that this be placed in the record. 

And it covers the testimony of yours, Dr. Levy. ‘‘Moreover, raising the law’s threshold for full-time work from 30 hours a week to 

40 hours would make a shift towards part-time employment much 

more likely, not less so. That’s because only a small share of workers today, less than 8 percent, work 30 to 34 hours a week and 

thus are most at risk of having their hours cut below health reform’s threshold. 

In comparison, 43 percent of employees work 40 hours a week, 

and another several percent work 41 to 44 hours a week. Thus, 

raising the threshold to 40 hours would place more than five times 

as many workers at risk of having their hours reduced.’’ Do any of 

you challenge that? You do? 

Mr. Anastos. 

Mr. ANASTOS. An employer who is not offering insurance and 

goes from 40 hours to 39, is barely making a move at all. Whereas, 

if you go from 40—it’s to save all that money, you certainly would 

be looking at lowering the amount of people you have at that level 

that you had to insure. That’s for those people that don’t already 

insure them. But I certainly—in all due respect, it just seems like 

it flies in the face of almost rationality that if it was 30 hours a 

week, people would not be managing to that level to save so much 

money. It’s a large portion. The health care is such a large portion 

of how much we have to pay, to be doubling and tripling our cost, 

our healthcare cost, and to then say, ‘‘If you go over 30 hours’’— 

I mean, we want to reward those people over 30 hours, but you’re 

going to artificially keep them down at that level. 

Mr. LEVIN. Yeah, but that doesn’t challenge the State in terms 

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nity colleges, one of the largest in the Nation? People who work 35 

hours—how do they get insurance? Don’t you want them insured? 

Mr. SNYDER. Representative Levin, I think the issue for the 

community colleges is a unique structure of building a partnership 

in the community and requiring both, because of cost and because 

of vision, to have half the faculty be on an adjunct part-time 

basis—— 

Mr. LEVIN. Okay. But—— 

Mr. SNYDER [continuing]. Most of whom have insurance and 

full-time jobs at another—— 

Mr. LEVIN. Then all you have to do is offer and they refuse. It’s 

not going to increase your cost in most cases. I mean those who—— 

Mr. SNYDER. We’ve done an—— 

Mr. LEVIN. For those who work 35, 36, 37 hours and don’t have 

insurance, don’t you want them covered? 

Mr. SNYDER. So the issue at the community college is that, as 

we’ve done right now, we’ve reduced the credit load, which is actually the classroom load, to 9 hours or three classes. And the reason 

that we’ve done that is that we are very likely to have a preparation time mandate that we either have to justify internally by having data on all 4,500 adjuncts or rely on an outside party how 

many hours of work outside the classroom—— 

Mr. LEVIN. But that’s an issue that has to be worked out. But 

you say in your testimony you want people covered. 

Mr. SNYDER. We want people covered. 

Mr. LEVIN. Okay. Now, if they work 35 hours, 36 hours, and 

they don’t have insurance, do you want them covered? 

Mr. SNYDER. I think, in general, everybody in the country 

wants people that are working virtually full-time—— 

Mr. LEVIN. Okay. So if their spouse works and they have insurance, they’ll turn it down. It won’t cost you anything. You say you 

want them to have insurance. They work 35, 36, 37 hours. You’re 

not going to—you don’t want to have to cover them, so who’s going 

to cover them? 

Mr. SNYDER. Our concept really regarding our adjuncts is that 

they are part-time, and our expectation is we did not plan to give 

them insurance because we did not plan to work them 35 hours. 

The issue is that the bulk of the time that is counted is time outside of our control; it’s preparation time. 

Mr. LEVIN. Yeah, but that’s an issue that has to be worked out. 

Mr. SNYDER. But that is the biggest issue for the community 

college. 

Mr. LEVIN. Okay. So then it should be worked out. But for you 

to say this is the problem with ACA and with healthcare reform 

and all the rhetoric—people say they want everybody covered. 

You’re a community college. People are working 35, 36 hours. The 

assumption is they don’t have health coverage through a spouse. 

And you’re essentially saying you want everybody covered, but you 

don’t want to cover them. 

Mr. SNYDER. We cover people working 35 hours or more with 

health insurance if they are working outside of the adjunct roles. 

We cover them today. 

Chairman CAMP. All right. Thank you. Mr. Johnson is recognized. 


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Mr. JOHNSON. Thank you, Mr. Chairman. Let me tell you about 

one of my constituents from McKinney, Texas, who is doing her 

best to make a way for herself. Jillian, a college student in her 

early 20s—and I’m sure you’re familiar with those people—has 

worked part-time at a local grocery store to help pay for her school 

expenses. For several years Jillian clocked between 30 to 40 hours 

a week, and suddenly she was cut between 15 and 18 hours a 

week. Jillian was shocked and decided to approach her manager. 

His answer was loud and clear. ‘‘The cuts are due to ObamaCare.’’ 

The so-called 30-hour rule imposed by ObamaCare forced this employer, like many others across the country, to cut worker hours, 

therefore harming the workers it promised to help. 

Let’s put this into perspective, and I’ll be conservative with my 

calculation. Let’s say Jillian worked 30 hours a week and, because 

of ObamaCare, was cut to 18 hours a workweek. That’s a loss of 

12 working hours. Having worked at the grocery store for a long 

time, Jillian was up to $9 an hour. This meant she was losing $108 

a week. Worse, that adds up to more than $430 each month. That’s 

$430 less for her pocket that she uses to pay for textbooks, gas, 

groceries, and living expenses. 

Mr. Chen, many people like Jillian find part-time work to help 

make ends meet. How does the 30-hour rule impact waiters and 

waitresses? 

Mr. CHEN. Congressman, it has a severe impact on individuals 

who are employed as waiters or waitresses. If you consider that the 

average wait staff earns about $9 an hour, working 39 hours a 

week, they would earn approximately $350 a week. If they’re cut 

back to 29 hours, they lose $90 a week, which is roughly a quarter, 

a 26 percent pay cut. If the waiter works 35 hours a week, they 

earn $300. If you cut them to 29 hours a week, they lose $54 a 

week, which is a 17 percent pay cut. 

Congressman, the basic point here is that if you make something 

more expensive, you’re going to have less of it. And so that is the 

dynamic that we see at play here. 

Mr. JOHNSON. Thank you. And, Mr. Anastos, in your testimony 

you state that, because of the 30-hour rule, ‘‘Unfortunately for my 

part-time workers, they will no longer be able to pick up additional 

shifts when their schedules change, or work more hours during 

busier times to bring home more pay.’’ Can you go into more detail 

about how this rule impacts the part-time waitresses and waiters 

that you have managed over the years? 

Mr. ANASTOS. Well, Congressman, I got out of the restaurant 

business and stuck to the hotels. I found it a lot more profitable. 

In fact, I’m glad you asked me that question because we were one 

of the first companies in Maine—hospitality companies—20 years 

ago—to institute health insurance. We’ve had it as low as 24 hours. 

Of course, we want to insure people from 30 to 40 hours. But we 

are two and a half times—our costs are going to go up right now. 

I mean, how much more can we do? So when I have people at 30 

hours and I want to reward them with more, sure, but I have to 

have the viability of our business first. We’re a small business. I’m 

not like Apple Computer or some other large company. I have, basically, 80-room hotels, so you have a relatively small profit margin. 

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ance costs, you just—there has to be a point where you just can’t 

do it. So, of course, you’re going to manage down to 30 hours. I’d 

like to raise them up, but if you’re talking about a $10, $12 an hour 

employee and then it’s going to cost $4 or $5,000 just to raise them 

up a few hours, it makes it extremely difficult to do. 

Mr. JOHNSON. Thank you. 

Mr. ANASTOS. And one last thing. Small businesses in this 

country—I just think sometimes we miss the point about how we 

grow our businesses together from scratch. I mean, I had one hotel 

10 years ago. All these people we know. We know them well. I feel 

like we’re driving a wedge between us. And I just—it’s going to 

make it so hard when they want more hours to say no to them. 

Thank you. 

Mr. JOHNSON. Thank you. 

Dr. Chen, doesn’t that cause a reduction in Social Security benefits, and won’t that have an effect in increasing poverty among seniors down the line? 

Mr. CHEN. That certainly potentially could be one side effect, 

Congressman, given the lower wages and therefore the lower payment of taxes into the system, yes, sir. 

Mr. JOHNSON. It affects disability also, does it not? 

Mr. CHEN. Thank you. 

Thank you, Mr. Chairman. 

Chairman CAMP. All right. Mr. Rangel. 

Mr. RANGEL. Thank you, Mr. Chairman, and let me thank this 

panel. It is seldom that we get a panel that really believes in 

health insurance for as many people as possible. And I gather from 

all of your statements that, if the resources were there, you would 

think that it would be in the best interest of the company to give 

access to health care to all the workers, right? No one disagrees 

with that. And I assume there has to be some evidence that a 

workforce that does have health care is more productive and has 

less sick time, less disabilities. I assume that the research would 

point that out. 

Now, you have worked, Dr. Chen, with Governor Romney where 

he had some concepts about health insurance. Are there any similarities between the ACA and the program that Governor Romney 

supported in Massachusetts? 

Mr. CHEN. Congressman Rangel, I believe that Governor Romney and President Obama share an interest in insuring that as 

many Americans receive access to quality health insurance coverage as possible. I have no doubt that—— 

Mr. RANGEL. Well, that’s a general feeling of Americans. But 

the Chair has restricted me to 5 minutes, and I would rather talk 

about the plan rather than the man in terms of—— 

Mr. CHEN. Yes, sir. 

Mr. RANGEL [continuing]. The overwhelming belief that it 

would be good if we could afford it. So what are the similarities between the man as it relates to the plan? 

Mr. CHEN. Certainly, there are elements structurally that are 

similar. 

Mr. RANGEL. I know. That’s what I’m asking you. What are 

they? 


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Mr. CHEN. The creation of health insurance exchanges, the notion of individual responsibility, those are certainly similar between 

the plans—— 

Mr. RANGEL. And the mandates? 

Mr. CHEN. Pardon me? 

Mr. RANGEL. And the mandates? 

Mr. CHEN. The individual mandate as well as the fair share responsibility are—— 

Mr. RANGEL. Well, let me ask you this, then. With those similarities, is there anything that you could suggest that we could do 

to perfect the ACA in order to get the same type of support, I assume, that you give to Governor Romney’s health plan? 

Mr. CHEN. I would say, Congressman, that the problem with the 

Affordable Care Act is that it takes a Federal approach to what I 

believe should be State-based reform. 

Mr. RANGEL. So what would you suggest, that we repeal the 

ACA? 

Mr. CHEN. Yes, sir, I would. 

Mr. RANGEL. I don’t know how much political science you’ve 

taken in your background and training, but assuming that the 

overwhelming majority of the people wanted to repeal it, what 

would be the first step that you would suggest that the Congress 

would do, put in a bill to repeal it? 

Mr. CHEN. I would suggest the first step would be to have a replacement for it, Congressman, that repeal alone would be insufficient. 

Mr. RANGEL. Now, what would happen to the people that have 

signed up already? Now we’re in a repeal mode, and we have to sell 

it. Do we cancel out all of the contracts that are out there under 

the ACA now and tell them that in the future we will have another 

plan? Does that make any sense to you as a citizen rather than as 

an expert? 

Mr. CHEN. I make two points, Congressman. First of all, unfortunately, many Americans have already had their plans canceled. 

Second of all—— 

Mr. RANGEL. But I’m talking about the millions of people that 

just signed up. 

Mr. CHEN. I think it’s important that there be some mechanism 

to ensure that people who have insurance are able to retain that 

insurance. 

Mr. RANGEL. Now that’s where we want to get some area of 

agreement. Could you give any idea, rather than repeal of what we 

have, because I think almost all of the Republicans and most of the 

witnesses—not this panel, of course—believe in repeal? But unlike 

you, they haven’t the slightest clue as to where do we go with the 

people who have no insurance. Now you’re saying that those that 

have signed up for this—that you do have some idea based on your 

experience with Governor Romney that they should be protected, 

and I agree with you. What will you suggest we do right now, besides repeal, because, politically speaking, impeachment is more 

probable than repeal. And that’s on the minds of a lot of people, 

too, so forget that. What can we do to protect those people who 

signed up under ACA? 


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Mr. CHEN. Congressman, I would suggest one of the things we 

can do is fix the 30-hour rule, which we’re here talking about 

today. 

Mr. RANGEL. What? 

Mr. CHEN. One of the things we can do is fix the 30-hour rule, 

which is contained—— 

Mr. RANGEL. No. No. 

Mr. CHEN [continuing]. In the employer mandate which we’re 

talking—— 

Mr. RANGEL. We’re talking about people that work 40, 50 

hours. They’re insured now. Don’t go into this other group. Those 

are problems that we can’t overcome that we’re talking about. I’m 

talking about protecting the millions of people that had no insurance. They have now signed up, 30, 40, 50 hours. And I, as a legislator, have to protect them as I try to perfect the delivery system. 

You have no ideas as to what happens to them? 

Mr. CHEN. I would suggest one of the problems we have now is 

that many Americans are unable to afford insurance on the health 

insurance exchanges because of the structure of the ACA and 

what’s required of plans on the exchanges. Therefore, one of the 

things I would do to answer your question, Congressman, is I 

would revisit the essential health benefits requirement in the ACA. 

Chairman CAMP. All right. Thank you. Mr. Brady is recognized. 

Mr. BRADY. Thank you, Mr. Chairman. If you don’t think this 

30-hour mandate isn’t hurting workers and cutting hours, you’re in 

deeper denial than Justin Bieber. 

Chairman CAMP. Will the gentleman yield? Will the gentleman 

yield? 

Mr. BRADY. You know, I never yield—— 

Chairman CAMP. He has a Canadian employer that’s single 

payer. 

Mr. BRADY. You know the head of United Food and Commercial 

Workers says it is happening, so the facts are already starting to 

show up. You’re seeing workers have their hours reduced and their 

incomes reduced. And Jimmy Hoffa, not exactly a conservative, has 

said that this rule will destroy the foundation of the 40-hour workweek that’s the backbone of the American middle class. They know 

it’s happening. They’re seeing it. I was with a Houston restaurant 

owner who got off a conference call with all his store managers and 

basically told them, ‘‘We will never hire a full-time worker again. 

Never. We just can’t afford it.’’ And this is a successful restaurant 

owner who likes opening up new restaurants and hiring new workers. 

We’re told today that if we go back to the traditional 40-hour 

workweek, which has been the case for many, many decades, that 

it will actually make the problem worse. But we know that nearly 

9 out of 10 workers who have a full-time job are eligible for health 

care. We know if they’re part-time it’s about a 15 percent chance. 

So this rule is forcing workers into part-time work with less of a 

chance of health care. 

So, Dr. Chen, what happens if we return to the 40-hour workweek? And I’m going to ask some of our business people as well. 

So what happens if we return to a 40-hour workweek? What—how 

does it impact that local worker? 


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Mr. CHEN. Well, I think, administratively, it’s much easier for 

employers. I mean, bear in mind that the 40-hour workweek was 

originally enshrined in the Fair Labor Standards Act. Even though 

it does not define full-time employment as 40 hours per week, it 

does dictate that non-exempt workers are paid overtime once they 

go over 40 hours. Therefore, the standard definition has become 40 

hours a week. I would suggest that if we go back to that system 

of a workweek, full-time workweek being 40 hours, employers 

would not have as many of the administrative challenges and hindrances to growth that the 30-hour workweek provides. 

Mr. BRADY. Okay. Thank you. Mr. Anastos, what happens if we 

do away with the 30-hour rule and you’re able to bring your folks 

back up in their hours? 

Mr. ANASTOS. Quite simply, it greatly simplifies our life. I 

mean, when I talk about doubling or tripling of cost, I’m not even 

talking about the administrative cost. I talked to our CEO before 

I came down here, and what—and asked him what he thought. 

And he said, ‘‘Anything.’’ He said, ‘‘Any relief at all to get close to 

40 hours’’—— 

Mr. BRADY. Will workers’ hours likely increase at your place? 

Mr. ANASTOS. Absolutely. In other words, instead of having to 

manage all the time and keep this ledger where you’re always trying to figure out are they over 30 hours and, therefore, as an average, going to cost you many thousands of dollars more—the survivability of the business—I have to manage to that first. And it puts 

us in a situation where I’m managing against my employees’ interests, and it’s against my interests. 

Mr. BRADY. Mr. Trautwein, retail—does this help increase 

workers’ hours if we do away with the 30-hour rule? 

Mr. TRAUTWEIN. Without a doubt. It makes the compliance 

cost easier, and makes it easier to manage the blend between fulland part-time employees. Many part-time employees don’t want to 

work full-time, and that’s something that, under the 30-hour rule, 

they have continued to work, that part-time, but with fewer hours, 

less money in their pockets. So, certainly, from a retail and chain 

restaurant standpoint, this would improve things measurably. 

Mr. BRADY. Mr. Snyder, do you think adjunct professors at community colleges want to see this 30-hour rule changed? 

Mr. SNYDER. Absolutely, because the bulk of them are making 

decisions that are counter to their own best interests and certainly 

counter to ours. And I think the point that you made—and that is 

the 40-hour rule, if we move to that, would memorialize 40 hours 

as a benchmark that you should, in good conscience as an employer, be offering health care to everyone and trying to get more 

people into that 40 hours because I think the 30-hour rule actually 

puts 40-hour plans at risk because somebody has to pay for that 

cost. 

Mr. BRADY. Yes. Good point. Thank you, Mr. Chairman. 

Chairman CAMP. Thank you. 

Mr. McDermott. 

Mr. MCDERMOTT. Thank you, Mr. Chairman. Last week I read 

a headline, ‘‘Did ObamaCare Break Up the Captain and Tennille 

Marriage?’’ Now, a reasonable reader could write that off as sensational journalism, but the way the right wing media has played it, 


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the Affordable Care Act appears to be a very devious thing. I’m 

sure we’ll hear shortly how ObamaCare has brought problems in 

the Middle East and created problems in the waters of West Virginia and probably even climate change. ‘‘If we can get rid of this 

30-hour rule, why, everything will be all better.’’ 

We’re talking about a preposterous accusation that the ACA has 

forced—and I emphasize forced, f-o-r-c-e-d—businesses to cut 

hours. Now, I have no doubt that think tanks can come up with 

statistics to make their claim and that our panel is doing without 

any real evidence. They have anecdotal stuff. I know more about 

the community colleges in the State of Washington than, I think, 

probably anybody, having been the Chairman of the Ways and 

Means Committee. They have used part-time employees and jerked 

their employees around for years to reduce their full-time equivalents. So it’s not something new that’s coming because of 

ObamaCare. There are no penalties until 2016. Who exactly is forcing you to do this now? 

For those of you wondering what this phony hearing is really all 

about, you ought to look no further than tonight’s State of the 

Union. This is put in the morning before the State of the Union to 

create a make-believe problem that the President has to deal with, 

right? 

Here’s what this hearing really ought to be about. What is corporate responsibility? Now, Citizens United decided that corporations were individuals. So I guess they’re individually responsible, 

right? But people like to talk about individual responsibility. Individuals ought to have their own health care, and there’s three ways 

you get it. You either get it from—you buy it yourself, or you get 

it through your employment, or the government provides it for you. 

And we took this Republican idea of letting industry and the insurance industry and the corporations put this together. And now 

every time we turn around, there’s another problem that’s destroying the American economy because of the Affordable Care Act. 

They basically are saying they have no responsibility for their employees. 

Now you have to ask yourself, with record profits—if you look at 

what’s going on in the stock market right now, you have to say, 

‘‘Don’t they have a responsibility to insure their employees?’’ I 

mean, is there no responsibility in this country? We were talking 

in this Committee, ‘‘We’re going to lower taxes. The corporate tax 

rate is killing America. We have to lower that corporate tax rate.’’ 

And we’re not going to require them to provide or offer insurance 

to their employees? 

What the Congress decided with the Affordable Care Act was 

that people had a responsibility to offer to their employees health 

insurance. Now, we can argue about the level until the cows come 

home. Really, the question is do you want a workforce that’s 

healthy or not, or do you just want them to work—see, we could 

go back to 1910 when there was no unemployment insurance and 

there was no industrial insurance and we treated workers like, 

‘‘Well, you get sick, your problem. Get out of here. We’ll hire another one off the street to replace you.’’ And if that’s the world we 

want to go back to, then you’re going in the wrong direction for me 


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because this bill is trying to figure out how do we use this system 

we’ve created. 

Now, Mr. Rangel has asked Mr. Chen, ‘‘Give me an example of 

something we can do to fix it,’’ and we get nothing except repeal 

the bill. Well, we tried that 49 times, and it isn’t going to happen. 

This is, in my view, a question that this Committee has to deal 

with. Whose responsibility is it for the health of American people? 

And I like—somebody said that this is the first hearing on singlepayer. It probably is because if you keep working to kill what 

you’ve created under RomneyCare, which Mr. Obama took and put 

in place for the whole country, you’re going to get single-payer care 

because Americans are not going to walk away from people who 

don’t have health care. 

Chairman CAMP. All right. Time has expired. 

Mr. MCDERMOTT. You and I pay a thousand bucks a month. 

Chairman CAMP. Mr. Tiberi is recognized. 

Mr. TIBERI. Thank you, Mr. Chairman. 

Mr. Chen, in central Ohio this make-believe problem has caused 

the Ohio State University to lower the cap on student work hours 

to below 30 hours. They’re not the only 4-year college to have announced that. Students have been impacted. Columbus State Community College has reduced hours for adjunct professors, adjunct 

faculty, and hourly workers to less than 30 hours a week as a result of the Affordable Care Act. The Upper Arlington City School 

District has already cut hours for aides who work with disabled 

students from 321⁄2 hours per week to 28 hours per week citing the 

Affordable Care Act. 

In my sister’s city where she lives with her two sons and her 

husband, Lebanon, Ohio, the hours of 18 part-time paramedics and 

firefighters were reduced. Public Safety Director Michael Blackwell 

said, ‘‘We were scheduling most of our part-time workers to about 

39 hours a week. With ObamaCare and the regulations that follow, 

we’ve cut all those part-time employees down to less than 29 hours 

per week.’’ And many towns who employ part-time paramedics and 

EMTs have done the same thing throughout the State where I live. 

How does a 30-hour rule that some call preposterous—others say 

is make-believe—impact the typical paramedic who now is working 

less than 30 hours a week? 

Mr. CHEN. Congressman Tiberi, the typical paramedic probably 

makes about $11 an hour. And if the work is cut from 39 hours 

a week to 29 hours a week, that paramedic loses about 25 percent 

of his or her pay. In similar fashion, if it’s cut from 39—excuse 

me—from 35 down to 29, they lose about 17 percent of their pay. 

So, obviously, there is a negative impact with respect to those folks. 

Mr. TIBERI. I ran into a lady at the grocery store who was working part-time for a retail employer and she was provided health 

care. She lost her health care this month, and her hours were reduced to less than 30 hours a week, and she was fine working parttime. Her husband’s an independent contractor—he did not get 

health care through his work. So she took a pay cut. She lost her 

ability to purchase insurance. She took a second part-time job so 

her and her husband could afford to go onto the exchange and 

make up for the fact that she lost insurance and lost hours. Is that 

something typical that you’ve heard among the 3 million people 


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who now are getting health care in the exchange who were forced 

off because they either no longer qualify because of the 30-hour 

workweek or as a spouse they’ve lost their coverage through their 

working spouse? 

Mr. CHEN. Yes, sir, those stories are quite common. And, in fact, 

I think the incentives are aligned in such a way that you may be 

hearing more of those kinds of stories. 

Mr. TIBERI. I received an email from a constituent in New Albany. Her 25-year-old son-in-law was offered a full-time position 

with a retail company in Ohio. He accepted the job and was eligible 

to receive healthcare benefits after 6 months on the job. And, according to her, it was a ‘‘godsend’’ for him and her daughter who 

had an 11-month-old baby at the time and was pregnant with another on the way. After 4 months on the job, because of the ACA 

requirement, his employer cut his hours to less than 30 hours per 

week, which made him no longer eligible for healthcare benefits. 

They were forced to give up their apartment, move in with family, 

and now can’t locate full-time work with another employer due to 

this fear of the regulation. Is that something you’ve heard as well? 

Mr. CHEN. Yes, sir, it is. 

Mr. TIBERI. Mr. Anastos, it is pretty clear that the 30-hour rule 

is forcing employers to cut back on hours. You were beginning to 

talk about the food service industry. White Castle’s headquartered 

in Columbus. They have already made this announcement in July 

that they were going to hire all new people at less than 30 hours 

because of the mandate. Have you heard this happening across the 

fast food sector and retail sector? Can you turn on your microphone? 

Mr. ANASTOS. In fact, that grocery story was the same story I 

heard last week where a woman was—I mean, where she said the 

same thing about her hours being cut. But, you know, I’d just like 

to say that we’re not all record profits and Wall Street companies. 

I mean, I started painting houses and working in a Wonder Bread 

factory as a union worker. And what I’m getting at is we don’t 

have—so we’re going to double and triple our health costs. I mean, 

small business is like the golden goose of job creation. How much 

more can they put on us? But as far as managing to 30 hours, yes. 

Those three new hotels which we will be building—and we are 

building them because we are building them essentially with other 

people’s money—we will manage those to 30 hours because we 

have to find out how viable that business is. 

Mr. TIBERI. Thank you. I yield back. 

Chairman CAMP. Mr. Neal is recognized. 

Mr. NEAL. Thank you, Mr. Chairman. Mr. Snyder, I am a big 

supporter of community colleges. I think for the purposes of clarification, just to raise a couple of questions with you, in the last 10 

years have you hired more adjunct faculty, or have you hired more 

tenure track professors? 

Mr. SNYDER. Well, we have tried to actually increase our percentage of full-time professors, but the growth of the community 

college is not permitted. So I would say that we probably added 

about—the ratio is about the same. We have gone from about 4,000 

to 4,500 and from about 1,200 to 1,500. It’s both a cost and availability issue. 


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Mr. NEAL. Fair enough. But has the trend line over this decade 

been to hire more part-timers than more full-timers? 

Mr. SNYDER. No. I think our goal was to reduce our costs and 

actually hire more full-time on a percentage basis. 

Mr. NEAL. And would it be conceivable that within the system— 

well, let me ask you this. What would a full-time faculty member 

carry for classroom hours? 

Mr. SNYDER. In the community college they teach. So they 

would teach five courses per semester, and then they would sign 

an additional contract for the summer if they were going to teach 

in the summer. 

Mr. NEAL. Okay, so 15 hours? 

Mr. SNYDER. Full load. Right. 

Mr. NEAL. Is it conceivable that, within the system, you would 

have two professors, both teaching 15 hours, where one might be 

considered full-time and the other might be considered adjunct? 

Mr. SNYDER. It might be. 

Mr. NEAL. Okay. That is kind of the point of this. And I understand the argument is flat around. But part of the problem here 

has clearly been that there has been a long-term trend toward hiring—across the country, hiring more adjuncts. Now, some universities for cost purposes—I understand that. But I think it’s kind of 

difficult sometimes to just discern the point that you raised earlier, 

that you might not hire based upon the following. Is that fairly accurate? 

Mr. SNYDER. Well, I think that you would want to look at the 

bigger picture. And that is the full-time professor signs an annual 

contract, which requires office hours, requires advising, which requires course development. 

Mr. NEAL. A tenured faculty member would sign a year-to-year 

contract? 

Mr. SNYDER. Well, ours are not tenured, but they have always 

signed a year-to-year contract, yes. 

Mr. NEAL. Okay. But generally in academic life—— 

Mr. SNYDER. It would be the same in a tenured agreement. 

These would be the job requirements. 

Mr. NEAL. Most tenured professors would sign a year-to-year 

contract? 

Mr. SNYDER. Well, our professors all do. 

Mr. NEAL. But I would suggest that that’s probably not the case 

at most universities and colleges. 

Mr. SNYDER. Well, it’s been that way for the school for decades, 

so—— 

Mr. NEAL. Okay. 

Mr. SNYDER. But the point being that the adjunct—just to be 

clear, the adjunct is only obligated to show up for orientation, to 

do the outside-the-course work—— 

Mr. NEAL. Right. 

Mr. SNYDER [continuing]. And to be in class what would typically be 9 to 12 hours per week. And so what the regulations would 

require is that we somehow assess on a fair basis the prep time in 

a way that determines did they or did they not exceed 30 hours, 

which is an unconscionable task at the moment. 


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Mr. NEAL. But in the State of New York today—it’s very clear 

in the State of New York that more and more full-time faculty 

members are augmented by those who carry the same number of 

hours in the State of New York who are adjuncts. And I think the 

trend line is pretty clear over the last 10 years, that most universities have moved in the direction of more and more part-time lecturers who they have not had to pay full-time benefits. 

Mr. SNYDER. Right. I would say this. Having read the articles— 

and I don’t have all the details. I read the articles. 

Mr. NEAL. Yeah. 

Mr. SNYDER. There is also the implication that there is an increase in professors who are non-tenured, not exactly adjuncts, 

which would be a different pay level. 

Mr. NEAL. Okay. Well, fair enough. Fair enough. 

Mr. SNYDER. Right. 

Mr. NEAL. But I just wanted to see if we could clear some of 

that up. 

Dr. Levy, productivity. The whole notion of productivity and 

what’s happened over the last few years even as the economy has 

been mired in this slump, productivity has actually gone up, hasn’t 

it? 

Ms. LEVY. It has, yes. 

Mr. NEAL. Substantially? 

Ms. LEVY. Yes, I would say so. 

Mr. NEAL. So could you link that notion of productivity gains 

perhaps to healthcare benefits and the security of one having 

health care? 

Ms. LEVY. Well, there’s very good evidence that having health 

insurance improves financial security and health outcomes for the 

people who have it. So it’s certainly the case that some of the economic benefits that the coverage expansions of the Affordable Care 

Act would include improvements in health and productivity, yes. 

Mr. NEAL. Mr. Chairman, I think one of the arguments that 

would be worth having here at some point—or discussions, I should 

say—would be having some folks come in to talk about the whole 

notion of productivity gains across the American economy during 

the last few years. They’ve been really substantial. The problem is, 

as we discuss this whole notion of income disparity, one of the interesting parts of it is, while productivity has really been gained, 

real wages and salary haven’t. 

And, Dr. Levy, would you comment on that? 

Ms. LEVY. Yes, that’s right. I mean, to the extent that we’re concerned about inequality, as Dr. Chen highlighted in his testimony, 

of course we do always need to be worried about the well-being of 

low-income families, of, in particular, the workers who are less 

likely to have health insurance. And I think that’s exactly why the 

idea of changing the hours threshold is so problematic because you 

put many more of those workers at risk of having their hours reduced by changing the threshold for full-time. 

Chairman CAMP. All right. Thank you. 

Ms. LEVY. I’ll stop. 

Chairman CAMP. Thank you. 

I’m going to go two to one now. So Mr. Reichert is recognized. 

Mr. REICHERT. Thank you, Mr. Chairman. 


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Dr. Chen, how does the 30-hour rule impact school bus drivers? 

Mr. CHEN. Congressman, I think the reality is that many of 

these individuals are going to face the same kinds of difficulties as 

other workers we’ve talked about. You might see, for example, that 

if they were to have their hours cut from 39 hours down to 29 

hours a week, that they would be looking at a pay cut of roughly 

25 percent or more. If they’re cut from 39 hours to 35 hours, you’re 

looking at a pay cut of about 20 percent, so obviously the impact 

is significant. And school districts—the data is pretty clear with respect to school districts, that they are feeling the pinch of the 30- 

hour rule. In fact, over a hundred school districts have reported 

making changes to hours for people like school bus drivers, temporary and other workers, or just outsourcing that work entirely. 

Mr. REICHERT. Thank you. Mr. Chairman and Dr. Chen, of 

course, we know this is not a make-believe problem. It’s not a theoretical concern. It’s not a political or ideological disagreement. This 

is really happening to workers out there across the country. It’s 

happening now. School bus drivers are having their hours cut because of ObamaCare’s 30-hour rule. 

Mr. Chairman, I’d like to submit this article for the record from 

the Huffington Post that reports how school districts have cut back 

hours because of this rule. 

Chairman CAMP. Without objection, so ordered. 

Mr. REICHERT. I’d also like to enter into the record, Mr. Chairman, a letter to you, Mr. Chairman, and the Ranking Member from 

the Employers for Flexibility in Health Care Coalition. 

Chairman CAMP. Without objection, so ordered. 

Mr. REICHERT. Thank you. 

Dr. Chen, I would like to follow up on a line of questioning that 

Mr. Johnson began as to what happens when people lose hours and 

earnings as a result of the 30-hour rule. We know that businesses 

are reducing employer’s hours or reducing the size of their workforce in response to the 30-hour rule. So what happens to individuals’ unemployment benefits if they’re laid off? Don’t checks for the 

unemployed go down if people work less while they’re employed? 

Mr. CHEN. Yes, sir, that would be an impact. 

Mr. REICHERT. How about the 401(k) contributions based on 

earnings? Won’t those go down as well? 

Mr. CHEN. Yes, sir, that would also be affected. 

Mr. REICHERT. So wouldn’t that cause retirement income to decline and poverty to increase down the line? 

Mr. CHEN. There is no question that retirement security would 

be one of the side effects—or less retirement security would be a 

side effect, yes, sir. 

Mr. REICHERT. Are there any other examples of unintended 

consequences for the safety net from this misguided 30-hour rule 

that you can think of? 

Mr. CHEN. You know, the biggest one simply is the loss of 

wages. The other thing I would say is that the more global concern 

about cost increases created by the ACA also makes it less likely 

that employers would offer health insurance to part-time workers. 

We have seen recent examples of this, Target, Home Depot, and 

other companies. Major companies have made the decision to miVerDate Sep 11 2014 11:34 Nov 23, 2016 Jkt 021118 PO 00000 Frm 00063 Fmt 6633 Sfmt 6602 I:\WAYS\WAYSPS\21118\21118.XXX 21118

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grate away from an offer of health insurance to part-time employees as well. 

Mr. REICHERT. And, Dr. Chen, from the data in the back of 

your testimony we find that the persons who are most vulnerable 

to ObamaCare’s 30-hour rule are young females with a high school 

education or less. Fifty-nine percent of the vulnerable population 

are under age 35. Sixty-three percent are female. Fifty-three percent have a high school diploma or less. Is that true? 

Mr. CHEN. Yes, sir, that is true. 

Mr. REICHERT. These are the groups who are most likely to 

lose hours and earnings as a result of ObamaCare’s 30-hour rule. 

Do you think the Administration intended for these groups to lose 

hours and earnings? 

Mr. CHEN. I would hope not, sir. 

Mr. REICHERT. Won’t many of them be single moms who are 

already struggling to raise children on a limited income? 

Mr. CHEN. Unfortunately, yes, that may be the case. 

Mr. REICHERT. And why do you think it makes sense to reduce—or does it make sense to reduce their hours and wages as the 

30-hour rule will do? 

Mr. CHEN. You know, I think the reality is that this is another 

example of not thinking through the incentives clearly. And, obviously, what’s happening here is that many of these individuals are 

going to feel the impact of the 30-hour rule, although that may not 

have been intended at the time but certainly will be the outcome. 

Mr. REICHERT. Mr. Chairman, I yield back. 

Chairman CAMP. Thank you. 

Dr. Boustany is recognized. 

Mr. BOUSTANY. Thank you, Mr. Chairman. Leonard Frank is 

a constituent of mine in Lafayette, Louisiana. When he was in college some years ago, he started working at a Pizza Hut. And he 

started probably at minimum wage and worked and saved. Today 

he’s a proud owner of America’s Pizza Company, which is 

headquartered in Lafayette, Louisiana. They have 148 Pizza Hut 

locations in five States and 4,000 employees, a real entrepreneur, 

a great American story. 

I spoke to Leonard, and he told me, because of this 30-hour rule, 

every employee—every employee—in his organization will be moving to a less than 30-hour workweek. The company—he made an 

economic decision. The company was going to be penalized $3 to $4 

million per year under ACA if he didn’t make this decision. 

Furthermore, this decision will primarily affect college kids, firsttime employees, and single working mothers. And in his business 

he starts them off above minimum wage. He pays market rates. 

This provision is now forcing employees to leave the company to 

seek out minimum wage jobs to make up lost hours. Dr. Chen, is 

this the new normal for America’s working families? 

Mr. CHEN. We’ve certainly seen some troubling trends over 

these last several years, Congressman. As I mentioned earlier, 7.8 

million Americans currently are in part-time work but desire fulltime work. They’re unable to find it due to a variety of different 

economic reasons. And beyond that, certainly a number of individuals will face—as we argue, almost 3 million individuals will face 


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potentially their hours being cut because of the dynamics created 

by the 30-hour rule. 

Mr. BOUSTANY. Mr. Trautwein, you represent the retailers. Is 

this the new normal? 

Mr. TRAUTWEIN. I fear it could be. There is a 1-year delay in 

the employer-mandated penalties. So I think that has softened the 

path. There is also a prohibition in the ACA against making insurance-based employment decisions. That may be deferring that. But 

if I were out there running a store, I’d have to think twice about 

the next hire I make and where I would place that individual in 

my company. So it’s certainly not good. 

You know, from a standpoint of a part-time employee, some want 

to work more. They want to work their way into full-time. And retail and chain restaurants have rewarded the best-performing employees that way. Others wrap their work around school, around 

other obligations, and they want to stay part-time. So, again, it’s 

a question of how many dollars are in their pockets. Are they working under 30 hours or up toward 40 hours. And, certainly, from 

that standpoint, they’re better off at that higher rate of compensation. 

Mr. BOUSTANY. Thank you. 

Mr. Chairman, I have a letter from the NFIB that was addressed 

to you and to Ranking Member Levin. And I would like for it to 

be made part of the record. 

Chairman CAMP. Without objection, so ordered. 

Mr. BOUSTANY. Mr. Anastos, it’s been almost 4 years since the 

law passed, and the employer mandate has been put on hold. It 

would have gone into effect this month. What—I mean, you’re still 

having to prepare for this because there’s a temporary reprieve in 

this. Do you have the information you need to make decisions? 

Mr. ANASTOS. It’s funny you should ask. I mean, well, not 

funny you should ask, but it is so—I have met with more people, 

the head of the insurance commission in Maine, every insurance 

person I can think of. And the problem is it’s hard—it’s almost like 

that old saying, ‘‘Nailing Jello to a wall,’’ to figure out really how 

much it’s going to hurt us or not hurt us. So do I feel I have all 

the information? I have all I can possibly get. But then, of course, 

the law changes all the time. I don’t know. 

Mr. BOUSTANY. So you’re faced with tremendous uncertainty as 

you try to plan how to grow your business and create jobs? 

Mr. ANASTOS. That’s the understatement of the year here really, truly, truly. 

Mr. BOUSTANY. Thank you. I yield back. 

Chairman CAMP. All right. Mr. Doggett. 

Mr. DOGGETT. Thank you, Mr. Chairman, and thanks to our 

witnesses. There are those who believe that we are better off in 

America if many of the people who serve our meals, make up the 

bed at our hotel room, or educate our youth cannot access health 

insurance. I don’t share that view. I would rather like the people 

who are serving my meal to have gone to the doctor if they have 

the flu or maybe gotten a flu shot and have access to health care. 

I think the underlying reasoning of those who would repeal the 

Affordable Health Care Act is not unlike those who say they are 

helping minimum wage workers by keeping the minimum wage at 


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a minimum and not raising it to a livable wage, as the President 

is seeking to do through an executive order for those who are Federal contractors and which the Congress should extend to all minimum wage workers. 

It is true that the Affordable Care Act has been blamed for just 

about everything but the polar vortex. And I read this—heard this 

story about the bus drivers in Indiana. I mean, that was something 

that was reported last June about an event that won’t even occur 

until 2016. You have to wonder whether it really had anything to 

do with the Affordable Care Act. 

We had a little of that with at least one community college system in Texas blaming the Affordable Care Act for what it would 

do with adjunct faculty. And they ended up having to retreat from 

that position because, in fact, in Texas, since 2003, adjunct faculty 

at our community colleges have been eligible for health coverage of 

the same type that is offered to full-time faculty and employees. Indeed, 3 years after the Affordable Care Act, last year Governor 

Rick Perry signed a law that made even more adjunct faculty eligible for that health coverage. You have to think that if a State can’t 

meet the low level Governor Perry sets, that it really has problems 

much bigger than adjunct faculty. 

At Austin Community College at the Alamo Colleges, we have 

many adjunct faculty members that are working fewer hours than 

30. They are eligible to get coverage. The question is who pays for 

it. And at the adjunct faculty level, if you have a lawyer who is 

part-time teaching business law, they probably have coverage 

through their employer already unless the insurance is unaffordable; it exceeds 10 percent—91⁄2 percent, I guess—of their income, 

there is not an obligation to provide coverage. 

There are many reasons why community colleges use adjunct faculty. Some of them are citizens in the community who are doing 

very well and enjoy teaching on a part-time basis. There are many 

others in some communities, as the Democratic staff of the Education and Workforce Committee reported in January, who are 

treated very poorly and paid very poorly and very much need the 

very kind of health insurance coverage that the Affordable Care 

Act offers. 

There are also many people in the private sector who are benefiting from the Affordable Health Care Act. I think of Gabe Farias, 

who is the Executive Director of the West Chamber of Commerce 

in San Antonio, Texas, a group of small businesses that are really 

encouraging job growth in that community. Mr. Farias was telling 

me that both he and his wife were able to get significantly better 

coverage at less cost because of the exchanges and the Affordable 

Health Care Act. 

I think of Ron Romero, who is in the technology industry, who 

talked about the advantages of avoiding job lock that were offered 

through the Affordable Care Act that encouraged the expansion 

and innovation in small business. And it’s to be remembered that 

this 30-hour rule did not come to us like manna from heaven. Like 

most of the problems with the Affordable Care Act, and there are 

many, it was the result of compromise in the legislative process. 

There were some who said, well, we really should not ask employers to cover half-time workers. Let’s go with 30 hours as a reaVerDate Sep 11 2014 11:34 Nov 23, 2016 Jkt 021118 PO 00000 Frm 00066 Fmt 6633 Sfmt 6602 I:\WAYS\WAYSPS\21118\21118.XXX 21118

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sonable compromise. If we had gone with 25, we would be here 

today hearing about the 24-hour rule. If we had gone with 35, we 

would be here today hearing about the 34-hour rule. 

I think, Dr. Levy, you pointed out that if we had used the 40- 

hour standard, what would we have, about three times as many 

people affected? 

Ms. LEVY. Yes. That is right. We would have three to five times 

as many workers potentially at risk of having their hours cut. 

Mr. DOGGETT. So I think what we achieved is a reasonable balance. We need to be working to see that all Americans have access 

to a family doctor, to affordable health care. That is the direction 

in which we have moved. 

We have done so imperfectly. We have done so with a considerable amount of bungling in the rollout of the Affordable Care Act. 

But its objectives are genuine, and the potential is great. We need 

to be working to achieve it instead of undermining it. 

I yield back. 

Mr. BOUSTANY [presiding]. I thank the gentleman. 

Mr. Smith, you are recognized. 

Mr. SMITH. Thank you, Mr. Chairman, and thank you to our 

panel, all of you, for sharing your insight and perspective. I think 

it is very valuable and important. 

I was looking at a report of various entry-level jobs, and it was 

intriguing to know the average wage of many of these jobs. For example, dishwashers earn $8.82 an hour, just under $9 an hour. I 

do not think anyone would say that that provides a great deal of 

financial comfort. But if they go from 39 hours a week, earning 

$344, to 29 hours a week, they would lose about $53 per week, or 

the equivalent of a 17 percent pay cut. 

And it is very compelling, looking at all of this information, and 

certainly as I hear from folks, across rural Nebraska in this case, 

there are realities out there that are very difficult for employees, 

employers, virtually everyone to contend with. 

So I would ask, Dr. Levy, can you point to perhaps some component of the healthcare law that reflects the differences between 

rural and urban areas of the country? 

Ms. LEVY. I am not sure exactly, when you are saying urban 

and rural—in terms of the labor markets, do you mean? 

Mr. SMITH. Well, as it relates to this issue. We know that unemployment rates vary drastically from one State to another, not 

to mention regions of one State to another. 

Ms. LEVY. Okay. Sure. I guess I tend to think of the impacts of 

the law being more related to where people are in the income distribution rather than their geographic location. So the affordability 

issue, as you know, is much more of a problem for lower income 

families. 

Mr. SMITH. Right. And on the affordability topic, have you studied how the affordability of health insurance would impact the frequency of its purchase? 

Ms. LEVY. Oh, yes. We do know that people are more likely to 

buy things when the price is lower. Yes. 

Mr. SMITH. But in terms of its practical application, has that 

been a part of recent reviews or studies? 


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Ms. LEVY. We expect that the combination of the individual 

mandate in the Affordable Care Act combined with the subsidies 

through the premium tax credits will have a large effect on the 

takeup of health insurance, yes. So we would expect many more 

people to get insurance both through the exchanges, ultimately, 

and through the Medicaid expansion. And we expect that to improve. 

The evidence we have suggests that that will have positive effects on health and financial security so that the overall plan of the 

Affordable Care Act, in making health insurance more affordable to 

people, provides better economic security. 

Mr. SMITH. Now, you indicated in your testimony that because 

of the ACA, such workers will be able to choose the schedules they 

prefer. Prior to that, in context, you highlighted how people are in 

different situations. Are there some specific examples of people 

really being able to have more flexibility or more choice of their 

hours in the last few months? 

Ms. LEVY. I have not heard any individual examples of someone 

saying, thank goodness I can now go to part-time, or now I can 

start my own business. But I do expect that, over time, we will be 

hearing those stories. 

Mr. SMITH. Because for a long time, some folks, depending on 

their personal situation, have preferred to work part-time. Would 

you agree with that? 

Ms. LEVY. The majority of part-time employment is what is 

called voluntary part-time employment, yes, people who work parttime because they are also taking care of family members or going 

to school or something like that. 

So, as Dr. Chen has said, 7.8 million workers are currently in 

voluntary part-time, what we call part-time for economic reasons, 

but that is higher than usual at the moment because we are recovering from a recession still. And even now, it is less than half of 

the part-time workforce. So the majority of part-time workers want 

to work part-time. 

Mr. SMITH. And, Dr. Chen, have you ever affixed a dollar figure, 

perhaps, an hourly dollar figure, on the value of health insurance? 

Mr. CHEN. I do not have a single figure, Congressman. What I 

would say is that certainly it is the case that under the ACA, for 

employees who are working in that 30- to 36-hour slot, it is more 

expensive for the employer to provide that employee with health insurance than someone working closer to 40 hours, let’s say, because 

of the 9.5 percent affordability requirement contained in the ACA. 

So I am not sure if that gets at the exact question you are asking, but I think the point is simply that it is more expensive for 

the employer to furnish insurance to someone working 30 to 36 

hours versus someone working 40 or more hours. 

Mr. SMITH. Thank you, Mr. Chairman. 

Chairman CAMP [presiding]. Thank you. 

Mr. Paulsen is recognized. 

Mr. PAULSEN. Thank you, Mr. Chairman. 

This testimony really strikes home with me. It is very similar to 

what I am hearing from a lot of folks in Minnesota, employers, particularly in the restaurant and retail industry, and also fire departments. 


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There is no doubt that I have heard from several fire chiefs that 

have told me the bottom line is that if the language is not changed, 

the law is not changed in the Affordable Care Act, a lot of city fire 

departments are going to have to either lay off or reduce hours for 

volunteer firefighters—volunteer firefighters—or they are going to 

have to drastically increase taxes to expand the budgets for these 

fire departments. 

And companies are no doubt having to scale back hours with 

more part-time jobs and less full-time jobs. So there is a direct consequence that employees that have had good full-time jobs now 

have part-time jobs. 

I know this one restauranteur that I spoke with in Minnesota. 

He owns seven restaurants. He has 535 employees. And many in 

this industry, you think they only employ part-time folks. Right? 

He actually has 41 percent of his workers working full-time. 

But now, because of the new law, he is being forced to move all 

of those folks, nearly all of them, into part-time status of 29 hours, 

and that is just wrong. That is the consequence again. 

Mr. Chen, let me just ask a question on retail sales workers. 

How does the 30-hour rule impact retail sales workers? 

Mr. CHEN. The research that we have done suggests that they 

are clearly at risk because of the 30-hour rule. And, in fact, if I recall correctly, I think they are most at risk because of the nature 

of their work schedules and the way in which the 30-hour rule sets 

up the incentives for them potentially to have their hours cut. So 

I would say that workers in the retail industry are at significant 

risk. 

Mr. PAULSEN. And, Mr. Trautwein, this just follows up with 

your area of expertise. What is different about the retail business 

that makes the 30-hour rule such a top priority for your industry 

as opposed to, say, an insurance company or a big Wall Street 

firm? 

Mr. TRAUTWEIN. It is really the nature of the retail industry. 

Frequently we are open 7 days a week, not quite 24 hours a day, 

but occasionally that, too. But because of the close margins the retail industry has, certainly if we increase the cost of labor, we can 

afford to have fewer employees in. And it is less expensive to have 

part-time employees than have full-time employees. 

But from our standpoint, this is not something that we are either 

for or against insurance coverage. Retailers were one of the first industries to come up with health insurance coverage. So it is a question of how much additional cost for providing coverage, how much 

additional compliance cost, how do you keep people in that sweet 

spot there, and what effect that has on how people operate their 

businesses. 

There are very, very expensive ways, technological ways, to manage workforce within that look-back period. But I worry a lot about 

the small independent stores who maybe are up above that 50-employee applicable level. It is a lot harder for them to manage that 

cost. So a lot of what we retailers and chain restaurants worry 

about is the compliance costs of managing this. 

Mr. PAULSEN. Thank you, Mr. Chairman. I yield back. 

Chairman CAMP. Thank you. 

Mr. Kind is recognized. 


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Mr. KIND. Thank you, Mr. Chairman. And I want to thank our 

witnesses for your testimony here today. 

When I had supported the Affordable Care Act a few years ago, 

I was one who did not believe it was a perfect bill, that it was going 

to be a bill that required constant updating and changes and reform as we learn what is working and what is not. 

So getting feedback is going to be important as we move forward 

so that we try to obtain the goal of more affordable, more quality 

healthcare coverage for all Americans. And hopefully it is a goal 

that is shared. But the constant drumbeat of criticism about what 

is taking place I do not think is very helpful or constructive in trying to come up with some workable solutions. 

Recently, I think there has been some misconceptions about Target’s recent announcement that they released. Earlier this week, 

Target, on a blog, clarified a few of the points that have been, I 

think, misinterpreted. 

First of all, they made clear that they are not reducing hours for 

their workers. They do not support raising the 30-hour rule to a 40- 

hour full-time rule. And they also feel that less than 10 percent of 

the workers that are now going into the exchange are better served 

in the exchange because there is more affordable coverage in it. 

So, Mr. Chairman, with your permission, with unanimous consent, I would like to introduce the Target blog for the record for 

the sake of clarification at this time. 

Chairman CAMP. Without objection, so ordered. 

Mr. KIND. Dr. Levy, let me ask you just a couple of questions 

with my time remaining. Anecdotally, I have been struck by the 

number of people in Wisconsin who have come up to me talking 

about the job lock issue, that now, for the first time, they are able 

to branch off and start a business that they were reluctant to before for fear of them or a family member with a preexisting condition then losing healthcare coverage. 

What are you seeing in the labor market in regards to job lock 

and whether or not this might spur some more entrepreneurs that 

have the ability now to finally strike out on their own if they do 

have a good idea or if they have wanted to start a business for 

some time? 

Ms. LEVY. There is good research that supports the idea that 

currently people are inhibited from starting businesses by the fact 

that employment and health insurance are so closely tied to each 

other. So the best research we have looks at, for example, people 

who already have employer-sponsored health insurance coverage 

through their spouse. Those people are significantly more likely to 

go start a business than people who do not have that option of coverage. 

Also, you can see at age 65, for men who are working full-time, 

there is a jump up in the probability of starting a business at age 

65 when men become eligible for Medicare that is presumably related to the fact that now they no longer have to keep working for 

the health insurance. 

So all of the evidence from what we have seen so far suggests 

that the fact that the Affordable Care Act provides an alternative 

to employer-sponsored coverage should increase mobility across 


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types of employment and increase the rate at which people start 

businesses. 

Mr. KIND. Now, I have a lot of small business owners, obviously, 

in Western Wisconsin. Many of them have been able to take advantage of the tax credit. When the ACA was first passed, the data 

and the information we had showed that with employers of 50 or 

more workers, roughly 95 percent of them were already providing 

healthcare coverage. 

Of course, those small businesses up to 50 workers were not required under the law to provide healthcare coverage. But there 

were incentives to help small business owners be in a better position to extend coverage for their workers. 

What are you seeing with small business owners, small businesses generally in the labor market, their ability to start providing healthcare coverage for their workers? 

Ms. LEVY. As you say, the Affordable Care Act has included and 

still includes a premium tax credit to help offset the costs for small 

businesses that are providing health insurance. It is also true that 

it is built into the Tax Code that there is assistance for employers 

providing insurance because health insurance is not taxed as income to the worker. 

So there is a significant advantage to employers who provide 

health insurance compared to providing that compensation in the 

form of wages. That is one important reason why so many small 

firms, in addition to almost every large firm, already provide 

health insurance for their workers, even in the absence of any kind 

of requirement to do so. 

Mr. KIND. We are hoping with the creation of the small business 

health insurance marketplace, too, that there will be a better 

choice for them with affordable rates that they will be able to extend to their employees. 

Oftentimes, this conversation is focused on some of the anomalies 

that are working their way through the system, about the 30-hour 

week or 40-hour week, and not enough focus about, all right, if it 

is not working, then what is the alternative of making sure that 

those workers have access to affordable healthcare coverage? 

We just saw one announced on the Senate side by some Republican Senators, and it is one big cost-shift proposal, is what they 

are offering in their plan. And it is taking away the tax exclusion 

within the Code, making it harder then for businesses to be able 

to offer healthcare coverage, and then shifting. 

And this has been a trend, I think, with a lot of large businesses. 

We are getting away from defined benefit plans to a now-defined 

contribution. Pensions are going away. And the concern I think a 

lot of workers are feeling is that employer-based healthcare coverage, too, is going to either continue to be shifted on their backs 

through higher deductibles and copays or it will just go away entirely. 

What trends are you seeing in that regard, Dr. Levy? 

Ms. LEVY. Well, there is very little evidence that there will be 

large-scale dropping of employer-sponsored coverage by large firms. 

They have almost all always offered it, even in the absence of a requirement to do so. 


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The business case for doing so remains strong, and in fact, it is 

even stronger as a result of the individual mandate because now 

even more workers—and we have heard that from Mr. Anastos— 

even more workers want to get health insurance. So large firms 

have very strong incentives, as they always have, to continue to 

offer employer health insurance. 

Mr. KIND. All right. Thank you. 

Chairman CAMP. Mr. Marchant is recognized. 

Mr. MARCHANT. Thank you, Mr. Chairman. 

I received a letter recently from a Tom Hardeman, who runs a 

McDonald’s, has a franchise in my district: 

‘‘The Affordable Care Act must be repealed. The financial impact 

of this law on my business will be devastating if not changed. I do 

not think I need to go into details, but there are businesses across 

the country that will go broke because of this unreasonable law. 

I will repeat what I said to you in the office. I used to think of 

Burger King, Wendy’s, and Sonic as my competition and the greatest risk to my business. But now I believe it is our government. As 

I look into the future and assess risk, it is regulation, taxation, 

mandated programs, and interference from the government that 

has the potential to destroy my business and small businesses like 

mine across this great land.’’ 

This is just an example of the many letters that I receive in my 

office every day, and many of the comments are about the lack of 

flexibility the ACA gives to part-time employees. 

Dr. Chen, not only is health care a major consideration for companies when they consider moving someone from part-time to fulltime, but there are pension obligations that go along with it. Is it 

fair to say that if you were to move somebody from, say, 36 or 39 

hours to a 40-hour full-time position, that it could add 30, 35 percent cost to employ that person readily? 

Mr. CHEN. Certainly the addition of the additional hours plus 

the additional benefits could add up. Yes, sir. 

Mr. MARCHANT. So that same company now is having to make 

a decision to keep that person on to bring them back to 29 hours. 

Now, some of the unintended consequences of that, I believe, not 

in the higher-paid staff but in the restaurant business, the hospitality business, is that many of those employees are near minimum 

wage or just above minimum wage. 

And if you take them from, say, 39 hours a week, they are above 

some of the thresholds that are very important in the public assistance world. If you take them from 39 hours to 29 hours, in many 

instances they will then begin to qualify for Medicaid. They will 

then begin to qualify for food stamps. They will then begin to qualify for almost a 100 percent supplement to their Affordable Health 

Care Act. 

So they will pay much less into the Social Security old age fund. 

They will pay much less into the Social Security disability fund. 

And it will trigger all kinds of other public assistance. 

So, really, does this law enable people to get out of poverty and 

to begin to work in the workplace and get themselves off of all of 

these assistance programs, or does this law really push those same 

people back into a dependence mode? 


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We already have a situation where major corporations in America are being accused of bringing their employees in and coaching 

them on how many hours they should take and how few hours they 

should work at the amount, and then they begin to show them if 

they will work a certain number of hours, then they can trigger the 

food stamp threshold. They can trigger the Social Security threshold. They can trigger the Affordable Care Act threshold. 

To me, if you look at this in a long-term perspective, the Affordable Health Care Act, the net effect of it, is not going to be that 

more of these people are going to have health insurance and more 

of these people are going to be more productive. It is going to create 

a new normal where people will not work as much because their 

access to benefits will be so much greater because they are working 

less. 

Thank you, Mr. Chairman. 

Chairman CAMP. Mr. Reed. 

Mr. REED. Thank you, Mr. Chairman. Thank you to the panel. 

I am going to echo some comments from Mr. Marchant, and 

those comments are to read to you a real letter from a real person 

from western New York that is dealing with this situation. 

Last week, I received this letter from Victor Tarona in Jamestown, New York, a small town in my district, who is the owner of 

a local coffee shop, a Tim Hortons, sharing his frustrations with me 

as a small business owner who is trying to keep his restaurant 

afloat while doing the best thing for his employees while complying 

with the maze of regulations coming out of Washington. 

He writes, ‘‘Dear Congressman Reed: As a hardworking restauranteur, I am writing to urge you to work in a bipartisan way to 

address the challenges to me and restaurant operators like me with 

the Affordable Care Act—the definitions of full-time employee, applicable large employer, and the automatic enrollment provision. 

‘‘The healthcare law has a particularly profound impact on the 

restaurant and food service industry. Our businesses are laborintensive, with low profit margins, with a workforce that is young 

and mobile, while employing a significant number of part-time and 

seasonal employees. Due to these characteristics, the law is more 

difficult for restaurants to comply with than many other employers. 

‘‘It is critically important that the law’s definition of full-time 

employee be rewritten so that it is more in line with the current 

employment practices and reflects my workforce’s needs and my 

employees’ desires for flexible hours. If not addressed by Congress 

soon, disruptions to the workforce could and will occur, and flexible 

work options for employees will begin to disappear in my operation. 

‘‘The definition of large employer under the law is based on a 

complex, 12-month calculation to determine whether an employer 

has 50 or more full-time equivalents, a calculation unique to this 

law and not easily implemented in large shift work environments. 

‘‘The annual calculation is unnecessarily complicated and sweeps 

millions of small businesses into its reach. Those on the cusp of the 

threshold must closely track their status, which increases small 

businesses’ compliance burden. Congress should act to simplify the 

determination who is a small or large business under the law. 

Thank you for considering these issues.’’ 


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That is a real person. That is not some made-up issue. That is 

not some made-up fact or anecdotal case. That is a real person that 

is dealing with this law today. And that resonates with me. 

And it is not just the definition of full-time employee; it’s the 

compliance cost. As a small business creator myself prior to when 

I came to Congress, to comply with these mandates, to comply with 

these regulations, takes real time. It takes real money. It takes a 

lot of stress as an owner of a small business. 

This gentleman employs 120 of my friends, neighbors, family 

members, and he is reaching out to me and telling me, you have 

to do something. So I get a little frustrated when I hear colleagues 

on the other side of the aisle say this is not really an issue, it is 

not something that needs to be dealt with, that we are trying to 

blame everything under the sun on the Affordable Care Act. That 

is not the case. 

I care about these people. This is not fair. These are real people 

that are business owners that have gone out there, risked their 

livelihoods, are employing real people, and those people that are 

employed? Just do a calculation. 

In New York, we have an $8 an hour minimum wage. So let’s 

assume he takes his employees and goes from 40 hours a week 

down to 30 hours a week, just to comply with this situation he is 

dealing with on a day-to-day basis. That is $80 less each week they 

are taking home, and about $350 each month. 

I don’t know about you, but there are a lot of people in my district that are struggling. And when they get impacted by losing 

$350 a month because of some policy out of Washington, D.C., that 

is frustrating. 

So I guess I will turn to you, Mr. Trautwein. You represent a lot 

of people in the retail industry. What Victor is explaining to me 

and reaching out to me for help with, is that real or is he just making this up? 

Mr. TRAUTWEIN. Unfortunately, Congressman, it is very, very 

real. I spend a lot of time trying to help my members understand 

the various requirements of the Affordable Care Act, when they 

need to start worrying about them. This issue of the counting of 

variable-hour employees in January, I am sure there are still companies who are not aware of that and then will be foreclosed from 

having as much as a 1-year look-back. 

But to your point, their stock in trade is not health care. They 

want to run their business. They want to run their restaurant. And 

their compliance burden with this is tremendous. If they’re lucky, 

they’ve got a licensed insurance agent who can lead them through 

this. But the complexity of the different requirements are continuing to pile up, and they are not happy with that compliance 

burden. 

Mr. REED. Thank you. With that, I yield back, Mr. Chairman. 

Chairman CAMP. Mr. Davis is recognized. 

Mr. DAVIS. Thank you very much, Mr. Chairman. 

Dr. Levy, as I have listened to the discussion this morning, I am 

reminded of myself, that I have attended in the last 2 months at 

least five openings of new facilities, new opportunities—community 

health clinics, school clinics for teens. And I believe that in each 


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one of these instances, new individuals are also being hired to take 

care of the additional workload that is developing. 

My county government has actually signed up more than 100,000 

potential clients that they are going to be serving ultimately 

through their County Care program due to a Medicaid waiver that 

they were able to acquire. 

Does the impact of these new services, new individuals, new clients, individuals who in some instances are in great need of health 

care to prevent debilitating experiences that they will have later on 

that will take them out of the workforce, that will prevent them 

from working at all, what impact does this have on job creation and 

our economy as a whole? 

Ms. LEVY. I think that is a great point. The best evidence we 

have on the overall impact of what the Affordable Care Act requires of employers comes from Massachusetts and Hawaii. And I 

do not mean to dismiss either the economic or the emotional resonance of the stories from individuals that we are hearing. 

But at the same time, I think it is important to look at the big 

picture, to take into account the fact that there are both other investments in hiring people occurring as a result of the Affordable 

Care Act; and also the fact that the economy is a powerful engine 

of growth, even as we are recovering from a recession, even in the 

face of these new requirements that we are hearing from my fellow 

panelists, are presenting a challenge for them. 

As I said, the best evidence we have of what the overall picture 

is, adding up all of the stories that people tell and counting them 

as data, comes from Massachusetts and Hawaii, where we see no 

aggregate effect on employment, no negative effect on employment, 

and in Massachusetts, no shift toward part-time work as a result 

of the employer health insurance mandate. 

So I think the big picture—while it will always be possible, in an 

economy with 150 million civilian workers, it will always be possible to find heart-rending stories of bad things that are happening 

to people that their employers may be attributing to the Affordable 

Care Act, the aggregate evidence we have is that the Affordable 

Care Act will not harm the labor market. 

Mr. DAVIS. I have also listened intently to the gloom and doom 

that is being projected, and some of which is being experienced, as 

corporations and businesses and everybody figure out how do they 

best navigate the compliance. 

It seems to me that talking about reducing hours that people 

work so that they cannot experience a quality of life that simply 

becomes desirable to me is not something that we should be encouraging businesses to do in our country. 

How would you respond to that notion? 

Ms. LEVY. I think that is right. You don’t want to do anything 

that creates an incentive that affects—you want to minimize any 

kind of distortion that might be associated with these kind of regulations. That is why you want to have as few workers as possible 

at risk of having their employers cut their hours, and that is one 

reason why it is very important to keep the threshold at 30 hours 

instead of 40 because you have many more workers who are at risk 

if you move the threshold to 40 hours. 


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Mr. DAVIS. Thank you very much. No further questions, Mr. 

Chairman. 

Chairman CAMP. Thank you. Mr. Young. 

Mr. YOUNG. Thank you, Mr. Chairman. I ask permission to submit for the record a statement by NFIB about the impact the 30- 

hour rule is having on small business, and in support of H.R. 2575, 

to restore the traditional definition of ‘‘full time’’ within the ACA. 

Chairman CAMP. Without objection, so ordered. 

Mr. YOUNG. Just last week, I visited with the superintendent 

of a school in southern Indiana in my district, in Salem, Indiana. 

She was distraught, joined by other members of her school board. 

She was distraught that this new requirement, not only leading to 

administrative costs, which are burdening the school whose budget 

is already constrained, but she is concerned about the future, the 

future of her substitute teachers and the ability to manage personnel. 

She is concerned about the ability to schedule said teachers in 

the classrooms at the right time. She speculated that she may have 

to ask those teachers to come in late while students are in empty 

classrooms so they can keep those teachers below the 30 hour 

threshold. 

Very recently, one of her best employees actually left citing this 

specific provision of the Affordable Care Act. 

Thirty-nine Indiana school corporations have sued the Federal 

Government in reference to this 30 hour provision because of the 

undue financial and administrative burdens it puts on them. 

I have talked to representatives from Indiana University who 

said they will cut the hours of 1,000 employees over the coming 

year to comply with this Act and this provision. 

Of course, we have heard the compelling testimony today from 

the largest community college system in the country, known as Ivy 

Tech out of Indiana. Mr. Snyder is President of Ivy Tech. We have 

heard from him today on the impact of this 30 hour provision. It 

seems clear, at least from your perspective, that this impact has 

not been exaggerated, it is not speculative. It is very real, and it 

is impacting your operations here and now. 

Has the delay of the employer mandate for 1 year to any significant degree made it easier to deal with this 30 hour provision? 

Mr. SNYDER. Well, part of the law is the look back provision, 

so you actually have to keep the data now. We started keeping it 

on October 1. The administrative burden on this is taking place as 

we speak. 

Mr. YOUNG. What about the changes that were discussed here 

today? There were some discussed to solve any problems related to 

this 30 hour provision, do you think those proposals that were put 

forward—have you heard anything here today that would entirely 

solve the challenges you are dealing with? 

Mr. SNYDER. No, I think your proposal is probably directionally 

the way we have to go. The current law is very prescriptive and 

vague at the same time, so that people in our situation don’t really 

have a full compliance understanding. 

I think the other thing which was brought up by your colleagues 

about the 40 hour benefit of health care is something throughout 

the land, and I think employers—having spent decades in the auto 


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industry where competitive pressures are enormous—employers 

are going to great lengths to preserve 40 hour health care for everybody, and trying to minimize the reduction in the benefit. 

I think this is actually counter-intuitive, and that making the 30 

hour week the threshold is going to force everybody in that same 

bucket and add additional cost for us, which is $12 million on a $25 

million current spend, and is unachievable. 

Mr. YOUNG. Thank you. Mr. Trautwein, you are here obviously 

representing the retail industry today. Maybe you can speak to the 

retail industry and whether the employer mandate has helped in 

an immeasurably significant way addressing the challenges created 

by this 30 hour provision. 

Mr. TRAUTWEIN. I think it is a huge, huge challenge, Congressman. We congratulate you on your legislation. We support it. With 

the additional tight margins that I mentioned earlier in the retail 

industry, it is very hard for us to take on additional labor costs. 

This question of managing people to a new threshold is something that is very uncomfortable for our stores and restaurants. 

From our standpoint, it is a big problem. 

Mr. YOUNG. Thank you. I hope we can move forward, we can 

address this in a bipartisan way. I am proud of the bill you referenced that I introduced with Representative Kelly, Representative Paulsen, and Representative Walberg. I hope we support this 

in a bipartisan fashion moving forward. We need to restore this 

traditional definition of ‘‘full time’’ under the Affordable Care Act. 

I yield back. 

Chairman CAMP. Mr. Griffin. 

Mr. GRIFFIN. Thank you, Mr. Chairman. I am going to start out 

by asking you, Dr. Chen, where did the 30 hour number come 

from? 

Mr. CHEN. Congressman, I believe there are different explanations, one is it was a product of legislative compromise. Some 

might say it was pulled out of a hat. It certainly does not seem to 

make much sense to me from where I sit, sir. 

Mr. GRIFFIN. In Arkansas, we try to apply common sense. I do 

not know anywhere where 30 hours is full time. If you just want 

to have some kind of requirement, that is one thing, but to call 30 

hours full time—in France, it is not even full time. In France, it 

is 35 hours and moving to 40. That is on its face laughable. 

When I look at the folks who have been impacted, let me tell you 

the sad part, and this often happens here, good intentions by people on both sides of the aisle make their way into legislation which 

fails. 

Let me give you an example. In Arkansas, Arkansas State University, the alma mater of our Democratic Governor, they had to 

cut folks back to a maximum of 28 hours per week. 

I assumed those were people, the people that wrote this law, that 

wanted to make sure employees had insurance. That is the goal. 

What did they get? No insurance and less pay. Genius. That is a 

genius Federal program right there. 

Let me read you another. This is from the Area Agency on Aging 

of Western Arkansas. They did the same thing, went down to 28 

hours per week. These people already had insurance because prior 

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gram offered with the State of Arkansas called Arkansas Health 

Networks. These people now lose their health insurance and get 

paid less. Just a great deal for them; right? 

Asian American Hotel Owners and Operators have complained to 

me about this. There have been numerous stories from back home. 

Pulaski Technical College has complained. The list goes on and on. 

I do not doubt the intention, the well intentioned actions of a lot 

of people, but Washington often gets it wrong. I heard a lot about 

Hawaii. I have not been to Hawaii. I have seen pictures. I do not 

think Hawaii’s economy looks anything like Arkansas. I would 

probably dig a little deeper on that. 

When I look at who this hurts, they are the people that folks up 

here in Washington talk about wanting to help, the vulnerable. I 

made a list of the people you talked about, and you are a sharp 

guy, Stanford and all that. I look at all these numbers. I believe 

what you are telling me. 

You talked about lower income folks, vulnerable folks, seniors, 

jobs, it hurts jobs. You talked about school districts, colleges, small 

businesses. 

If I were to adopt the Democrat language, I would probably say 

that the 30-hour rule is a weapon on the war on women, the war 

on lower income folks, the war on the vulnerable, the war on seniors, the war on job creation, the war on school districts, the war 

on colleges and small businesses. Sounds ludicrous, does it not? 

That is the type of language that is used here. Let me tell you, 

the people who say they want to help those folks, they are hurting 

them. I have pages and pages and pages of letters, people talking 

about the impact of this. 

I do not buy your numbers, Dr. Levy. I would like to take a 

closer look. Maybe we can sit down. I hear so many voices from 

back home, and it is no consolation to them that the jobs they are 

losing in the private sector are being replaced by the county, whatever, expanding government jobs, which are not sustainable and 

with borrowed money anyway. 

This is ridiculous. That is why I am proud to support my colleague’s bill. I think ultimately we will get there. I think the President has basically recognized a lot of these problems. The number 

one person in terms of appealing ObamaCare has been President 

Obama. He does it unilaterally all the time. He does not like it 

when we do it. Maybe we can convince him to take a look at this. 

Thank you. 

Chairman CAMP. Mr. Pascrell is recognized for 5 minutes. 

Mr. PASCRELL. Mr. Chairman, I would hope there would be 

growing support now to vote the unemployment insurance back for 

those 1.4 million people who lost their long term unemployment insurance, since you want to help those very people. Do not hold your 

breath. 

Before I begin, Mr. Chairman, I would like to address one issue 

raised earlier in this hearing, if I may. Everyone here knows I support the ACA and the intentions behind the employer mandate. 

I wrote the IRS a letter raising concerns about the impact of this 

provision on volunteer emergency personnel. The Obama Administration has since indicated they are addressing concerns that I and 

others have outlined. 


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I would like to enter into the record, with your permission, the 

response I received from the IRS on this issue, since many of our 

Members have discussed this with me, Mr. Chairman. 

Chairman CAMP. Without objection, so ordered. 

Mr. PASCRELL. Thank you very much. Mr. Chairman, no one 

can deny that the facts are the facts, that healthcare spending 

growth has slowed to the lowest levels in 50 years. Medicare per 

capita cost growth is historically low. 

The fact that is in addition to providing 32 million Americans 

with heath insurance, many for the first time, and giving parents 

piece of mind knowing they can take their sick child to the doctor 

without being suffocated by medical bills they cannot afford, the 

ACA is an investment in our citizens and in our economy. 

Dr. Levy, expansion of Medicaid, a major part of the ACA, some 

of the Governors have bought in, some of the Governors have said 

no, and some of the Governors have been obstructionists. That expansion is an important component of the Affordable Care Act. I 

think it will help millions of Americans gain coverage. That has already been seen. 

However, expanding Medicaid programs also provides important 

economic benefits for States, and the Federal Government will pick 

up virtually all the costs of the expansion. 

According to Families USA, in my home State of New Jersey, 

‘‘The expansion of the Medicaid program will insure nearly 400,000 

residents.’’ That will result in $1 billion in new Federal funding 

and support 14,500 jobs by 2016. 

Unfortunately, not expanding the Medicaid programs is just one 

way some of the Governors are priding themselves as being impediments, God knows, we have seen enough here, to the ACA’s success. 

In my home State of New Jersey, thankfully, the Governor got 

something right, the Governor decided to expand our Medicaid program. However, he continues to sit on more than $7 million in Federal funding to help educate our residents about the ACA. If he 

does not spend it, we should get it back. I am fighting for this in 

every State, and let private organizations educate the public. 

Dr. Levy, can you discuss some potential positive economic effects just on that portion of the ACA, Medicaid expansion? 

Ms. LEVY. Absolutely. I think that is a very important piece of 

this story. I am also fortunate enough to live in a State where we 

have enlightened Republican leadership that has taken up the 

Medicaid expansion, and in Michigan, we expect this to provide 

coverage to 400,000 new Medicaid enrollee’s who previously would 

not have had insurance, with significant health and financial benefits, in terms of providing financial security. 

In Michigan, over the first 10 years of the expansion of Medicaid, 

because of the significant Federal role in paying for the expansion, 

it actually reduces spending by the State. That has been shown in 

an analysis that we did at the University of Michigan, the State 

House and Senate fiscal agencies also released an analysis showing 

that. 

By reducing what the State has to pay—the State currently pays 

a lot for mental health and community health care for people who 

will become folded into Medicaid, and as a result, it lifts some of 


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the pressing burden on the State who can then spend more money 

on education, highways, or many other things that Michigan would 

like to spend money on. 

Chairman CAMP. All right. Mr. Renacci. 

Mr. PASCRELL. Mr. Chairman, may I ask one question? 

Chairman CAMP. Just quickly. 

Mr. PASCRELL. Thank you, Mr. Chairman. What was the situation with mental patients before, when they were not covered by 

Medicaid? 

Ms. LEVY. The State spends a considerable amount of money on 

community mental health spending, so mental health care that is 

provided through public clinics. Those patients would now have access through Medicaid to other providers and the State’s commitment through the community mental health system is reduced. 

Chairman CAMP. Mr. Renacci is recognized. 

Mr. RENACCI. Thank you, Mr. Chairman. I want to thank the 

witnesses today also. As a business owner for approximately three 

decades, I often wondered why some of this legislation would come 

out of Washington, and then I realized many times when legislation comes out of Washington, it is by people who never have to 

live with it. 

As a small business owner for almost three decades, I had to, 

and I understand the struggle that small business owners are 

going through on a day-to-day basis, especially with the ACA and 

with the hour requirements, and I also realize that every day they 

have to make decisions on whether they lay people off, whether 

they can add people, what are they going to do next? 

Coming from Ohio, the Cleveland/Akron/Canton area, I get the 

opportunity to go back on a weekly basis, so I am talking to these 

people. It is shocking when I hear many of my colleagues on the 

other side say this is not affecting some of these people. 

Let me give you some examples in my district and in the Cleveland/Akron/Canton area of what is going on with the hours and the 

Affordable Care Act. 

The Cleveland Clinic, which is ranked among the top four hospitals, has announced layoff’s of employees as a direct result of the 

Affordable Care Act. Summa Health Systems has laid off 58 workers since September, another 25 in December. Akron General 

Health System, Summit County’s second largest employer, laid off 

132 workers in February and another 30 in September. 

The City of Akron and the City of Medina, the City of Fairlawn, 

the City of Tallmadge, and the City of Westlake, are limiting part 

timer’s to fewer than 30 hours per week. Cuyahoga County Community College capped hours for 1,559 part timer’s at 20 hours per 

week. Kent State University limited course loads of adjunct faculty. 

Medina City Schools cut weekly hours for cafeteria workers and 

teacher’s aides from 30 to 28 hours per week. Stark State College 

cut hours of adjunct faculty at 29 hours per week. University of 

Akron cut course loads for part time faculty. 

A local tavern in Canton, Ohio, saw a 32 percent increase in its 

projected premiums after the employer mandate was delayed. If 

premiums increase again, they will have to look at a reduction in 

workforce or stop providing health insurance to their employees. 


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Claudia, from Cleveland, wrote, concerned over losing her employer-sponsored health coverage after previously having been laid 

off from a full time job. She accepted a part time job at J.C. Penney 

that offered her affordable health care. However, her employer has 

now stopped offering insurance for part time employees due to the 

ACA. 

John, from Wadsworth, a small business owner, wrote to tell me 

that he will not be able to offer insurance in the future due to increased costs as a direct result of the ACA. 

Most recently, a woman working at a counter at a local restaurant in my home town said to me, Congressman, I have been 

here for 22 years, I have worked 32 to 35 hours per week, I love 

my job. I enjoy my job. Now, because of the ACA and the skyrocketing costs, we have been told that all of our staff will be reduced to approximately 28 hours per week. That is approximately 

a 15 to 17 percent pay cut plus she is going to lose her health insurance. Now, she said to me, I have to go on the Affordable Care 

Act. She looked at me and said, I am scared. She said, can you help 

me, can you overturn this law? 

These are the kinds of things you hear when you go back to the 

district, but when I am in Washington and I hear some of my colleagues, I never hear that. This is what you actually hear when 

you are dealing with these people when you are back there listening to them. 

It is amazing. I worked in the healthcare industry most of my 

career. I had nursing homes. I saw your statistics on how they are 

going to be affected. I think of those over 1,000 employees that I 

employed, and look at those nursing assistants, many of them single mom’s, 35 hours per week, that earned approximately $411. 

If the nursing assistant hours are cut back to 29 hours, he or she will lose $71 per week, or the equivalent of a 17 percent pay cut. 

That is unheard of when we are thinking of these single mothers 

and fathers that are trying to provide for their families. 

I go back to certainty and predictability, and I would ask this 

general question. As a business owner, you need certainty and predictability. I would ask all the panel members, do you believe the 

ACA and this hour situation brings certainty and predictability to 

the small business owner? 

Mr. CHEN. Absolutely not, Congressman. 

Mr. ANASTOS. No, not at all. 

Mr. TRAUTWEIN. No, sir. 

Mr. SNYDER. No, sir. 

Ms. LEVY. But you are large business owners. For small business owners, now their workers can get health insurance from another source if they have to. 

Mr. ANASTOS. Can I just say one thing? 

Mr. RENACCI. Yes. 

Mr. ANASTOS. We are large business owners. There are large 

business owners like general corporations, Wall Street and such, 

and then there are small business owners like us. That is a big difference. 

May I just add, the hardest thing to understand here is this idea 

of the changing of the rule, the 40 hours is going to cost more, certainly there are more people closer to 40 hours, but as someone 


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who has worked many years on the floor by the hour, I would much 

rather lose 1 hour of pay, 40 to 39, than 40 to 29. Thank you. 

Chairman CAMP. Mr. Kelly. 

Mr. KELLY. Thank you, Mr. Chairman. Again, panel, thank you 

for being here. I know sometimes we talk about oh, these are just 

anecdotal, but I also, like Mr. Renacci, Mr. Young and Mr. Griffin, 

have people back home. Barbara Wilson works for the Arc of Mercer County, Pennsylvania. This is a phenomenal organization that 

assists people with developmental disabilities. 

Barbara is a part time employee who used to work 30 to 35 

hours a week. She was recently informed that her co-workers, all 

part time employees, would be having their hours cut to around 20 

hours a week because of the Affordable Care Act. 

Barbara told me she was shocked when she heard this news, and 

because of her hours being cut, she said she could no longer afford 

the cost of living. 

There is also a lot of private companies I have talked to. I think 

the chilling effect of this current run is these people say you can 

use our story but not my name, because I am afraid of some type 

of retribution. 

Mr. Anastos, thanks for being here. I know it is tough and I have 

people back home who tell me—I have a guy who had 92 of his 93 

employees that worked more than 30 hours a week. Now all 92 

have had their hours cut to less than 30 hours a week. On top of 

that, more than 30 employees have had access to their health insurance plans ended. 

It is not only affecting the private sector, it is also affecting the 

public sector. In our school district where I come from, they had to 

implement procedures to keep all the part time employees working 

less than 30 hours. The entire Orange County government has had 

to reduce all of its part time employees to just 28 hours. 

The purpose of this meeting today was to examine the impact of 

going from 40 hours to 30 hours, and I think it is absolutely ridiculous for anybody to say there is no impact. 

Small business owners, we spend about $400,000 a year on 

health care. 

Mr. Anastos, if you could just relate—I do not think people get 

the picture—your total cost of labor and what this adds to your 

total cost of labor, and how that affects your final product that you 

have to put in the market and compete against every single person 

that does what you do? 

When you talk about it, also talk about Social Security contributions, wage taxes, Medicaid contributions. It is a lot more than people think. 

In our place, someone says we need to hire this person. I say 

fine, do you know what it is going to cost? They say this is what 

we will be paying them per hour. I said that is not my total cost, 

you can add about 40 percent to that with wage taxes and benefits. 

Would you talk about it a little bit? You do it every day. You 

have to cut checks that you sign the front of, not the back of. 

Mr. ANASTOS. Thank you, Representative. It does add about 40 

percent. Well, it adds quite a bit. I would have to look at it and 

see exactly what it costs. There are different levels for different 

amounts. 


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Of course, the thing about health insurance is if you have people you are paying $12 an hour, it is a much bigger percentage, and 

it adds to it all the time. 

Like I said, we are small businesses in America. We may be 

large when considered over 50, but at the same time, two and a 

half times our healthcare costs and say we are large businesses 

and do we not want to cover everybody? Of course, you do. At the 

same time, the survivability of your business is first and foremost. 

Mr. KELLY. Dr. Chen, this idea of the 40 hours to 30, I have 

no idea where this came from. I also wonder how it will impact 

overtime pay. What are we going to use now as a definition when 

we go to overtime? Forty to 30, we have no idea how this came 

about. Why did it come about? How did we change from 40 to 30? 

Does anybody know? 

Mr. CHEN. It certainly does not match precedent that we have 

in the Fair Labor Standards Act, which sets 40 hours as the 

threshold for the payment of non-exempt employees for overtime 

pay. 

This is inconsistent with that and one of the reasons why it 

raises employer costs. 

Mr. KELLY. Here is my question. Since we have cut the workweek from 40 hours a week to 30 hours a week, that is about a 

25 percent reduction in the number of hours. Using the President’s 

terminology, it is just arithmetic. If I cut your hours by 25 percent, 

then I am going to have to raise your wage by 25 percent. I see 

this pivot to the minimum wage now. It is kind of funny how it 

kind of matches, the 25 percent less hours, matched by a 25 percent increase in the minimum wage that the government wants to 

establish. 

I think that is a Judas goat, okay, we are going to raise your 

wage. I do not believe that is the way to approach this. 

Mr. Chairman, I thank you so much for holding this hearing. 

This is not a Republican issue or a Democrat issue. This is an 

American worker issue. 

When Mr. Hoffa jumps on this and says you are destroying the 

backbone of the American middle class, then there is a concern. 

This effect, it is a very chilling effect, and I really am concerned 

about the gap now that is widening between what the people have 

faith and trust in and what we are coming out with in policies. 

Mr. Anastos, thanks for being here. Mr. Snyder, thank you. Mr. 

Trautwein, Dr. Levy and Dr. Chen, thank you for being here. 

I think the greater concern today better be how we are destroying the American people’s confidence in the government that continues to come out with policies that destroy our middle class, and 

then somehow say no, no, that is not the problem, the problem is 

we are just not paying enough at the minimum level. It should 

never be a minimum wage that we try to get to. It should be a 

market wage where we allow all workers with their skills and their 

abilities to make as much as they can. 

Thank you all for being here. Mr. Chairman, thank you. I yield 

back. 

Chairman CAMP. Thank you. Ms. Jenkins is recognized. 

Ms. JENKINS. Thank you, Mr. Chairman. I, too, thank the 

panel. You have had a long day. 


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During my short time on this Committee, there have been countless hearings on the President’s healthcare law. Just last spring, 

the Committee had the opportunity to question Secretary Sebelius 

about the progress of the law. She informed us everything was proceeding according to schedule. 

In July, of course, the President decided to delay enforcement of 

the employer mandate until 2015. This was a surprising but welcome retreat. I think the witnesses here today have demonstrated 

this. 

This delay, unfortunately, is only a temporary relief for employees and employers. This fall, employers will have to make a very 

difficult decision regarding healthcare coverage and full time status 

of their employees. These decisions will ultimately hurt employees, 

not employers. 

I have a letter here from a Kansan, Jon Rolph, who operates 64 

restaurants across the Midwest, and several in my congressional 

district. I would request, Mr. Chairman, that this letter be entered 

into the record. 

Chairman CAMP. Without objection, so ordered. 

Ms. JENKINS. Mr. Rolph, whose restaurants employ hundreds 

of people, has made a good faith effort in the past to provide all 

employees with a modest health insurance plan and will continue 

this effort by complying with the employer mandate in 2015. 

Additionally, he has made the decision not to cut his employees’ 

hours below 30 in order to avoid the mandate. This means that he 

will continue to offer healthcare coverage for those folks even 

though it will be more expensive than his old plans that were canceled. 

This is nothing short of admirable, and is representative of the 

strong relationships that many employers and employees share all 

over the Nation. 

However, Mr. Rolph worries the 30 hour definition for full time 

employees could have adverse consequences for companies in this 

situation, because his employees tend to work more than 30 hours 

a week and are offered a health plan, and their option will be to 

either take this more expensive health plan or search for a plan on 

Healthcare.gov where they will no longer be eligible for a subsidy. 

Mr. Rolph worries that many of these employees will actually request to work fewer than 30 hours a week so they will not be offered health insurance by the company and can obtain subsidies 

over the exchange. 

I doubt these are the outcomes the President envisioned when he 

put pen to paper on this law, but the sad reality is his healthcare 

law will encourage many Americans to be only part time employees, which will make it increasingly difficult for many of them to 

achieve the American dream. 

Mr. Anastos, I feel that your testimony really reflected the comments of Mr. Rolph and others. As somebody in the hospitality industry, do you have comments regarding how true this letter is? 

Mr. ANASTOS. Yes, Congresswoman, that letter is right on the 

money. I think Congressman Reed had similar comments that I 

think were right on the money. 

To me, and I have to look at it from the employer’s side, but like 

I said, I have worked on factory floors and that sort of thing for 


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many years, and I truly think it hurts the worker more than us, 

because they are the ones who are going to have their hours 

knocked down by a significant amount, and secondly, the whole 

idea about the relationship between us small employers or even 

large employers and our employees, it just creates this wedge and 

division that is totally unnecessary. 

Certainly, I would reemphasize everything that gentleman said. 

Ms. JENKINS. Mr. Chen, would you care to comment on if you 

agree this provision will disproportionately hurt the employee? 

Mr. CHEN. There is no question the biggest loser from this is the 

employee, particularly the vulnerable population we have talked 

about today that we look at in our research and others have looked 

at as well. 

You are talking about millions of Americans who will be adversely impacted because the incentives created by the law frankly 

are perverse. 

Ms. JENKINS. Thank you. I yield back, Mr. Chairman. 

Chairman CAMP. Thank you very much. I want to thank our 

witnesses for their testimony today. I would appreciate your continued assistance in getting answers to the questions that were asked 

by the Committee. 

As a reminder, any Member wishing to submit a question for the 

record will have 14 days to do so. If any Member submits questions 

after this hearing, I would ask the witnesses to respond in a timely 

manner. 

Thank you very much, and with that, this hearing is adjourned. 

[Whereupon, at 12:39 p.m., the Committee was adjourned.] 

[Submissions for the Record follow:] 


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