[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
    OBAMACARE'S EMPLOYER PENALTY AND ITS IMPACT ON TEMPORARY WORKERS

=======================================================================



                                HEARING

                               before the

                SUBCOMMITTEE ON HEALTH CARE, DISTRICT OF

               COLUMBIA, CENSUS AND THE NATIONAL ARCHIVES

                                 of the

                         COMMITTEE ON OVERSIGHT

                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 6, 2011

                               __________

                           Serial No. 112-119

                               __________

Printed for the use of the Committee on Oversight and Government Reform


         Available via the World Wide Web: http://www.fdsys.gov
                      http://www.house.gov/reform




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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

   Subcommittee on Health Care, District of Columbia, Census and the 
                           National Archives

                  TREY GOWDY, South Carolina, Chairman
PAUL A. GOSAR, Arizona, Vice         DANNY K. DAVIS, Illinois, Ranking 
    Chairman                             Minority Member
DAN BURTON, Indiana                  ELEANOR HOLMES NORTON, District of 
JOHN L. MICA, Florida                    Columbia
PATRICK T. McHENRY, North Carolina   WM. LACY CLAY, Missouri
SCOTT DesJARLAIS, Tennessee          CHRISTOPHER S. MURPHY, Connecticut
JOE WALSH, Illinois


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on October 6, 2011..................................     1
Statement of:
    Lenze, Ed, senior vice president, American Staffing 
      Association; John Uprichard, president/CEO, Find Great 
      People International; Tav Gauss, president/CEO, the Action 
      Group-Human Resources Solution; and Christopher Spiro, 
      managing director, health policy, the Center for American 
      Progress Action Fund.......................................     5
        Gauss, Tav...............................................    28
        Lenze, Ed................................................     5
        Spiro, Christopher.......................................    32
        Uprichard, John..........................................    23
Letters, statements, etc., submitted for the record by:
    Gauss, Tav, president/CEO, the Action Group-Human Resources 
      Solution, prepared statement of............................    30
    Gosar, Hon. Paul A., a Representative in Congress from the 
      State of Arizona, memo dated October 5, 2011...............    44
    Lenze, Ed, senior vice president, American Staffing 
      Association, prepared statement of.........................     6
    Spiro, Christopher, managing director, health policy, the 
      Center for American Progress Action Fund, prepared 
      statement of...............................................    34
    Uprichard, John, president/CEO, Find Great People 
      International, prepared statement of.......................    25


    OBAMACARE'S EMPLOYER PENALTY AND ITS IMPACT ON TEMPORARY WORKERS

                              ----------                              


                       THURSDAY, OCTOBER 6, 2011

                  House of Representatives,
Subcommittee on Health Care, District of Columbia, 
                  Census and the National Archives,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:33 a.m. in 
room 2154, Rayburn House Office Building, Hon. Trey Gowdy 
(chairman of the subcommittee), presiding.
    Present: Representatives Gowdy, Gosar, Burton, Davis, Clay, 
Murphy and Cummings (ex officio).
    Staff present: Brian Blase, professional staff member; 
Molly Boyl, parliamentarian; Drew Colliatie, staff assistant; 
Sery E. Kim, counsel; Jaron Bourke, minority director of 
administration; Yvette Cravins, minority counsel; Devon Hill, 
minority staff assistant; and Jennifer Hoffman, minority press 
secretary.
    Mr. Gowdy. Good morning.
    This is a hearing on Obamacare's employer penalty and its 
impact on temporary workers. The committee will come to order. 
I will recognize myself for an opening statement and the 
distinguished gentleman from Illinois, Mr. Davis.
    Two months ago, this committee heard from five business 
owners that the new health care law will cause them to reinvest 
less in their companies, reduce the number of workers on their 
payrolls, automate more services and move workers into part-
time status to minimize compliance costs. The testimony 
revealed that job loss from the law might be considerably worse 
than the CBO predicted which was 800,000 jobs lost by the end 
of the decade.
    Today, we will hear from professionals in the staffing and 
temporary worker industry that will highlight the negative 
impact of Obamacare on their industry and the economy as a 
whole. This hearing will provide a better understanding of the 
vital role that staffing firms and temporary workers play in 
our economy and will also reveal the negative effects of 
burdensome statutes in President Obama's healthcare law.
    American staffing companies are an extremely important 
component of our economy. As a sector, they employ nearly 3 
million workers per day and over 10 million workers annually. 
For many workers and businesses, staffing firms provide an on-
the-job interview that often leads to permanent employment. 
Even workers who do not gain permanent employment from their 
position earn a paycheck and improve upon a skill set.
    Perhaps most importantly, staffing firms promote 
flexibility in the labor market which is an essential feature 
of job creation. In fact, between June 2009 and June 2011, the 
staffing industry added nearly half a million jobs accounting 
for over 90 percent of all total non-farm job growth.
    Unfortunately, this industry is threatened. The new 
healthcare law was bad for temporary workers and it will harm 
America's ability to have a more flexible labor force to better 
compete in the global economy.
    The President's healthcare law, Obamacare, contains many 
reasons for this pessimism. The employer mandate provision 
places a tax penalty on businesses that fail to offer their 
full-time workers a health insurance package with terms 
dictated by the Department of Health and Human Services. This 
employer mandate places the burden of carrying out the 
President's vision of healthcare reform on the backs of 
businesses.
    The law defines a full-time worker as an employee who works 
at least 30 hours per week with respect to any month. Because 
of the high administrative costs of doing calculations for each 
worker each month, the Department of Treasury does not think 
this provision is workable and is proposing a lookback period 
of 3 to 12 months for the purposes of calculating the employer 
mandate tax penalty.
    The law's non-discrimination rules prohibit an employer 
from providing different health insurance to different classes 
of workers. The penalty for violating this non-discrimination 
rule is $100 per day per affected employee. The administration 
is currently writing this regulation and is seemingly oblivious 
that it is commonsense to compensate different classes of 
workers differently.
    However, there is a common sense economic principle that 
everyone can understand. As something gets more expensive, 
people tend to buy less of it. With the employer mandate tax 
penalty, the minimum essential benefit package and the non-
discrimination rules, this healthcare law has made the cost of 
labor more expensive. These provisions will result in fewer 
jobs and lower wages for many Americans and unfortunately, 
those most affected will be younger workers and those with 
fewer skills.
    Many of these workers are just now starting their career 
paths and because of this irrational law, they will have more 
difficulty getting their feet in the door which will delay or 
prevent them from learning the skills necessary to move up the 
economic ladder. In reality, for many Americans, the American 
dream will be replaced by government dependency.
    The witnesses before us today may testify about the urgent 
need to exempt temporary workers from the employer mandate and 
non-discrimination rules. They may also call for a longer look-
back period. In essence, there will be more calls for Obamacare 
waivers. A government by waiver environment, as Richard Epstein 
calls it, creates uncertainty and breeds favoritism. 
Uncertainty translates into economic stagnation and only 
promulgates the distrust in our Federal Government.
    Rather than issuing waivers to particular industries, the 
healthcare law should be repealed and common sense reforms at 
lower healthcare costs should be pursued. This is the only way 
to combat the negative effects of the Affordable Care Act 
currently rippling across our economy.
    With that, I will recognize the distinguished gentleman 
from Illinois, the ranking member of this committee, Mr. Davis.
    Mr. Davis. Thank you very much, Mr. Chairman.
    I want to begin by thanking the witnesses for their 
appearance today. I appreciate the fact that you traveled quite 
a distance to share your concerns about the Affordable Care Act 
and for that, we are grateful.
    We want to listen to you. Our discussions with the American 
people led to the Affordable Care Act. We learned there is 
nothing more important and precious than good health. This 
should not be a privilege afforded to just a few. The Patient 
Protection and Affordable Care Act provided a pathway to 
accessible health care for the masses.
    In an effort to balance the needs of businesses and 
workers, we understand that the administration is listening too 
and it has opened the process for crafting the implementation 
of ACA. Innumerable hours have been spent communicating with 
stakeholders, employers and employees. Several government 
agencies, including the Internal Revenue Service, have 
solicited public comment on a range of employment issues. This 
has been and continues to be a fair, transparent and flexible 
process.
    The ACA was clearly designed with temporary workers in 
mind. Because in America, most people have obtained health 
insurance through their employer, and temporary workers have 
been at a disadvantage. For many temporary work has meant 
working for minimum wage or slightly higher, by the hour with 
generally no access to health care. These are among the workers 
receiving primary care in the emergency room. These are among 
the workers that are forced into bankruptcy due to a tragic 
accident.
    The ACA has provided a solution to that problem for 
temporary workers. The ACA is immeasurable progress, but no one 
here believes that it is perfection. That is why the public 
input is crucial in this process of developing and implementing 
regulations for this law. Let us not lose sight of the major 
achievement for temporary workers that the ACA represents.
    We look forward to your testimony. Again, I thank you for 
your appearance.
    I yield back the balance of my time.
    Mr. Gowdy. I thank the gentleman from Illinois.
    It is my pleasure now to introduce our witnesses. I would 
ask you to come up at this time. On behalf of all of us, we are 
delighted to have you. We appreciate your willingness to lend 
us your expertise. I will introduce you from my left to right, 
your right to left, and after the introductions are complete, 
you will be recognized for your 5 minute opening statement.
    There may be a series or panel of lights in front of you. 
Those lights mean what they traditionally mean in society--a 
green is go; yellow is speed up and see if you can get through 
the stop light quickly; and red means, see if you can wind up 
your thought. By way of reminder, make sure you turn on your 
mic so we can hear you loud and clear.
    Mr. Ed Lenz is senior vice president, American Staffing 
Association. Thank you for joining us, Mr. Lenz. John Uprichard 
is president/CEO, Find Great People International and a 
resident of the State of South Carolina, I hasten to add. Mr. 
Tav Gauss, president/CEO, the Action Group-Human Resources 
Solution. Mr. Christopher Spiro, managing director, health 
policy, the Center for American Progress Action Fund. Welcome 
to each of you.
    We will now recognize Mr. Lenz for his opening remarks.

    STATEMENTS OF ED LENZE, SENIOR VICE PRESIDENT, AMERICAN 
STAFFING ASSOCIATION; JOHN UPRICHARD, PRESIDENT/CEO, FIND GREAT 
  PEOPLE INTERNATIONAL; TAV GAUSS, PRESIDENT/CEO, THE ACTION 
GROUP-HUMAN RESOURCES SOLUTION; AND CHRISTOPHER SPIRO, MANAGING 
   DIRECTOR, HEALTH POLICY, THE CENTER FOR AMERICAN PROGRESS 
                          ACTION FUND

                      STATEMENT OF ED LENZ

    Mr. Lenz. Thank you, Mr. Chairman. We greatly appreciate 
the opportunity to testify this morning. I appreciate your 
excellent overview of the issue that confronts the staffing 
industry and I do appreciate Mr. Davis' comments as well. Thank 
you to the other members of the subcommittee as well.
    I am senior vice president for Legal and Public Affairs of 
the Association which represents staffing firms throughout the 
United States. I will try not to repeat all of the points the 
chairman made but I will try to touch the highlights.
    Staffing firms play a vital role in the economy, as you 
mentioned, Mr. Chairman. We provide critical employment 
flexibility for employees and businesses. We provide services 
in every sector of the economy in a wide range of jobs. Mr. 
Davis noted the low income workers but I think it is also 
important to point out that staffing firms today provide 
services in health care, information technology, engineering 
and scientific sectors including professional and managerial 
services. The low income worker is certainly a part of our work 
force but by no means is necessarily representative of it.
    We are also playing a vital role in the current economy by 
keeping people working. Without the temporary work option, U.S. 
unemployment rates would be much higher. You noted, Mr. 
Chairman, that almost 3 million people work on any given day 
but over the course of a year, 10 million go through our doors, 
showing the high turnover in the temporary work force.
    The reason for that primarily is that most people use 
temporary work as a short term, stop gap on their way to 
permanent employment. We facilitate that. One of the things we 
are most concerned about the impact of this law is it would put 
a dampening effect on our ability to bridge people into 
permanent work.
    Of course we are concerned about the impact of the employer 
tax penalties. As you mentioned, they are assessed in one of 
two ways. If you do offer coverage to your workers, you only 
pay a tax on those people getting subsidies. If you don't offer 
coverage, you pay the tax on all of your full-time employees.
    Staffing firms are uniquely exposed to the penalties for 
two reasons. One is the unpredictable nature of temporary work 
which means that staffing firms have no way of knowing who will 
be a full-time employee and therefore, won't have any way of 
knowing what their penalties will be or who to enroll in 
coverage.
    The second is that they have limited health insurance 
options for covering their temporary workers which means they 
might not have a practical way to offer coverage to everybody 
which means they would pay penalties on all their full-time 
employees, not just those getting subsidies, so it is a 
conundrum.
    The historical reason for why there is limited overage for 
temporary employees is simple. It stems from the fact that they 
are short term, high turnover workers and when given the option 
of health coverage, they generally refuse it. Only a tiny 
fraction of temporary employees accept coverage from their 
employer even when it is available. It is hard to get insurance 
companies to write that kind of coverage.
    The result has been that the low cost, so-called mini-med 
plans have been the only practical option for most staffing 
firms. If they are abolished, staffing firms may not have an 
economical way to offer coverage, especially if the new non-
discrimination rules limit their ability to provide flexible 
coverage for workers as they need it and to the extent they 
need it.
    To address these issues, we need two things to happen. I 
should say parenthetically and without minimizing the point, we 
are strongly in favor of health care insurance for people and 
for reform in general. We think many of the aspects of this 
bill are sound and to be applauded but as structured, it 
creates enormous problems for employers that need to be 
addressed and we are hoping that they can be.
    First, we need a sensible definition of who is a full-time 
employee. You mentioned the look-back rule Treasury is 
currently considering. We strongly support that. It ought to be 
a look back of at least 12 months we believe.
    Second, we need to have viable health insurance options for 
temporary employees meaning that the non-discrimination rules 
have to be drafted so as to permit that. We are working with 
the administration, as I mentioned to do that but our concern 
is that the statute may not afford enough leeway for them to do 
what they need to do to fix the problem. Our preference would 
be for the employer penalties to be repealed entirely or 
substantially reduced or modified.
    Staffing firms operate on razor thin margins and they 
cannot afford to put those costs through to employers. If they 
do, as you pointed out, the result will be fewer temporary 
jobs. The elimination of the penalties would resolve that 
problem and we hope that Congress would consider doing that.
    We appreciate the opportunity to testify. We look forward 
to working with you in the future. Thank you.
    [The prepared statement of Mr. Lenz follows:]

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    Mr. Gowdy. Thank you, Mr. Lenz.
    Mr. Uprichard.

                  STATEMENT OF JOHN UPRICHARD

    Mr. Uprichard. Mr. Chairman, and members of the committee, 
thank you for the opportunity to be here today to discuss the 
impact of health care reform on the staffing industry and my 
company specifically.
    My name is John Uprichard and I am the president and CEO of 
Find Great People. We are a temporary staffing and executive 
search firm headquartered in Greenville, SC with offices 
throughout the Carolinas. We have actually been in business or 
30 years and have provided job opportunities and stability to 
thousands of people throughout the Carolinas as well as 
nationwide. We work very hard to take good care of our 
employees and as a result, we have been recognized as Best 
Place to Work in South Carolina for 3 years in a row.
    In order to help clarify the ramifications of health care 
reform on my organization, I would like to give you some 
background on my company. We currently have 50 internal 
employees with an average salary of $64,000 a year and an 
average tenure of 5 years. Our internal payroll for 2010 was 
$2.9 million. Our temporary payroll was $7.4 million.
    We provide 100 percent of our internal employees health 
insurance and long term disability insurance premiums. We also 
give them access to our 401(k) retirement savings plan and in 
addition, they have generous time off as well. We believe our 
internal employees are vital to the success of our organization 
and we are very committed to their individual financial success 
and stability.
    Moving to the folks who work with us on a temporary basis, 
we also recognize the need to provide fair, competitive wages 
and benefits to them. We currently have 400 people working for 
us on a temporary basis at one time. The average wage is 
$14.28, well above the national minimum wage.
    We provide these temporary employees with access to mini-
med coverage that is not dependent on their temporary work 
schedule because we know their hours will fluctuate and we want 
them to have consistent access to medical care. In addition, 
they have access to our 401(k) program.
    The average assignment length for one of our temporary 
employees is 5 months. In most cases, the temporary assignments 
serve as a bridge to a full-time job opportunity either with 
one of our clients or a different employer of their choice. 
Those full-time job opportunities are usually dependent upon 
their performance with the opportunity given by one of our 
customers.
    As we began to study the impact of health care reform on 
our business, we quickly recognized there were some very 
significant and unintended consequences. First is cost. Based 
upon historical volumes, our monthly health care costs would 
increase by $62,000 to $76,000 per month. That is a 
mathematical problem for us.
    In addition, the administrative cost to comply with the 
regulatory and compliance aspects would be over $40,000 
annually. Offering coverage to temporary employees will be 
difficult because their hours fluctuate and they are moving in 
and out of coverage constantly. Also, it is essential to note 
that we do not control the hours. Those are controlled by the 
clients to whom we provide the service.
    Ultimately, health care reform legislation imposes large 
employer costs in infrastructure on staffing firms like FGP 
because we cannot qualify as a small business. We technically 
have 400 employees but only 50 are regular, full-time staff.
    You might ask why can't we pass on this cost to our 
customers? This is a question we have studied the feasibility 
of. We do not believe it is a viable solution based upon our 
recent experience with increased cost from our State 
unemployment taxes. In 2011 in the State of South Carolina, we 
had a 300 percent increase in our State unemployment taxes. We 
had to have this conversation with our customers and we 
received significant pushback. Our volume started to drop as a 
result of these conversations.
    Once we take into account the increased cost from health 
care reform and unemployment taxes, we really hit a ceiling on 
price where the client actually looks at the cost benefit 
analysis and says it doesn't make sense and it is an 
affordability issue. As a result, jobs are going to be 
impacted. Unfortunately, those jobs will be impacted within our 
own organization for the full-time and temporary folks that 
work with us. This could result in hundreds of jobs per year. 
That is what keeps me up at night, that is difficult.
    The people who have helped us build this company, 
especially the 50 employees that are with us internally who 
have been with us several years, if we are unable to move 
forward, we have to make a business decision. We will not close 
as a company but we will more than likely get out of the 
temporary staffing business which means we will have to down 
size those employees who have worked with us for many years.
    I appreciate the opportunity to come before the committee 
today. I would ask that the committee strongly support the 
look-back rule the Treasury Department is now considering.
    [The prepared statement of Mr. Uprichard follows:]
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    Mr. Gowdy. Thank you, Mr. Uprichard.
    Mr. Gauss.

                     STATEMENT OF TAV GAUSS

    Mr. Gauss. Mr. Chairman, distinguished members of the 
committee, thank you for having me here today.
    I am Tav Gauss. I am from eastern North Carolina. I started 
my business 30 years ago after going to the University of North 
Carolina, the real Carolina, and then Wake Forest University 
and then being a commercial banker.
    So as not to repeat what you have already heard, it is in 
my testimony but let me get down to some brass tacks. I have 16 
permanent people in my company whose payroll is over $1 million 
a year. We are in eastern North Carolina. I think two of my 
folks have a college degree; the rest are high school degreed 
or associates. The average tenure with the company during the 
30 years is 18 years.
    These people are benefited with health insurance for which 
they pay a premium, a significantly large premium. We have a 
huge deductible. We have a 401(k) plan that is open to our 
permanent staff as well as our field staff. The field staff, to 
my knowledge, there have been fewer than 50 people who have 
wanted to contribute to that in the 30 years we have been in 
business. We match the 5 percent match or whatever and we do 
that for field staff as well. We have a lot of vacation time 
for our permanent staff and we have paid vacation for our 
temporary staff who have been with us over 1,500 hours and it 
continues on as long as they live with us at certain levels.
    We have 1,700 field staff this year. Mini-med plans have 
been offered to them since 1992. I cannot tell you the numbers 
that have come across our desk and the ones that would work and 
wouldn't work, and so forth. To my knowledge, we have never had 
a temporary staffer take their portion of the mini-med plan. I 
can say that with 99 percent positivity. They would rather have 
the money.
    My temporary staff makes an average of $9.25 an hour which 
is significantly above the prevailing minimum wage in North 
Carolina and the Federal Government. We live in, I wouldn't say 
a rural part of the State, but we are not in the metropolitan 
part of the State. If you take $9.25 an hour, that annualizes 
at a little less than $20,000 a year. They would much rather 
have that extra $30 or $40 a week, or whatever, than to pay for 
medical care. Some are young and think they are bullet proof 
and think they don't need it, and some would rather have the 
money.
    If the health care plan goes in as it is written now, my 
premiums for health insurance will go from $80,000 a year to 
$711,000 a year. I would close my doors. All of my people would 
be out of work, temporary and permanent staff. If I was able to 
pass some of that cost onto my temporary staff, say 20 percent, 
I am still out of business because it goes from $80,000 to 
$500,000.
    In an effort to skip ahead if I may say this, I know this 
bill was passed with good intentions by everybody who signed 
off on it. There is no doubt in my mind we need reform in 
health care. When I look at my personal situation with the 
$5,000 and $10,000 deductible, that is pretty high, but when 
you take the health care plan and put it on top of the 
increases in Federal unemployment taxes, State unemployment 
taxes, regulatory more and more rules and laws and fees being 
charged and fines being raised and charged, this is a piling 
on.
    I ask that you please put it off for a while until we get 
the loose ends tied up. We cannot figure out how to stay in 
business the way this plan is written now. By the way, the 
Treasury's idea on look back is not a bad idea, but it needs to 
be 12 months. Three months is way too short a period of time 
for a lot of obvious reasons that I won't go into here.
    Thank you for your time and thank you for listening. I 
appreciate it.
    [The prepared statement of Mr. Gauss follows:]
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    Mr. Gowdy. Thank you, Mr. Gauss.
    Mr. Spiro.

                 STATEMENT OF CHRISTOPHER SPIRO

    Mr. Spiro. Mr. Chairman, Ranking Member Davis, thank you 
for the opportunity to testify today.
    Starting in 2014, all Americans will have access to 
affordable health insurance. Carl Camden, president and CEO of 
Kelly Services, one of the largest employers of temporary 
workers, explains why this is so important: ``The United States 
remains the only advanced nation in which individuals lack 
access to affordable group health coverage outside the 
employment setting. As a result, health insurance related job 
lock afflicts millions which is bad for entrepreneurship, worse 
for economic dynamism and frustrating for an industry that 
relies on a free agent work force. Simply put, non-traditional 
workers are treated badly by the current model. Any policy 
choice that enhances the availability and mobility of talent is 
a good thing for the staffing industry and the economy as a 
whole.''
    As Mr. Camden observes, access to affordable health 
insurance will benefit not only workers, but also their 
employers. Preventive care will reduce absenteeism and increase 
and the productivity of workers. Health care costs for the 
uninsured will no longer be shifted onto employers through 
higher premiums and for staffing firms, millions of newly 
insured Americans will create demand for health care workers of 
all types.
    In addition to these economic benefits, many temporary 
workers who work long, hard hours but may be struggling to pay 
the bills and cannot afford health insurance through no fault 
of their own, will not lay awake at night out of fear that a 
family member will become sick, sending the family over the 
edge into bankruptcy.
    If you agree with Mr. Camden that access to affordable 
health insurance is a good thing, as I do, then employer 
responsibility is an essential piece of the puzzle. It provides 
an incentive for employers that currently offer coverage to 
maintain that coverage. Otherwise, many employers might drop 
coverage and allow taxpayers to pick up the tab, which would 
increase the Federal deficit by billions of dollars. In fact, 
the non-partisan Congressional Budget Office concluded that the 
absence of employer responsibility would significantly erode 
employer-based coverage.
    Simple financial comparisons of potential penalty 
liabilities to the cost of coverage may not drive employer 
decisions. Many employers offer coverage because their 
employees expect them to do so and they want to remain 
competitive in the labor market. Since individuals will have a 
responsibility to maintain coverage, there will be much more 
demand for their employers to offer it.
    Finally, the cost of coverage will still be excluded from 
income and payroll taxes. In fact, in Massachusetts, enrollment 
in employer-based coverage actually increased even during the 
recession. Therefore, it is not surprising CBO concluded that 
the Affordable Care Act would have very little effect on 
employer-based coverage.
    Congress carefully targeted employer responsibility under 
the Affordable Care Act and the Treasury Department is 
carefully examining how to implement the law so that it is 
practical and flexible for employers. I want to highlight 
several aspects of the statute and its implementation that 
demonstrate this careful approach.
    First, and most importantly, employer responsibility only 
applies to large employers with at least 50 full-time 
employees. As a result, the vast majority of employers will be 
exempt from employer responsibility altogether. Second, small 
employers do not become large employers just because they hire 
seasonal workers. Third, since penalties apply with respect to 
full-time employees, the definition of full-time employee is 
important. Treasury has proposed a safe harbor in which an 
employer can generally look back up to 12 months to determine 
whether employees averaged at least 30 hours per week.
    Employers for Flexibility in Health Care, a coalition of 
employers that rely on large numbers of temporary workers, 
strongly supports Treasury's proposal, commenting that it ``has 
the potential to provide flexibility employers need to preserve 
flexible work arrangements, provide a stable source of coverage 
and allow for the practical administration of benefits.''
    In addition to proposing the safe harbor, Treasury has 
requested comments on alternative methods. Of course any method 
must not undermine the purpose of employer responsibility that 
I discussed earlier to prevent erosion of employer-based 
coverage which would be disruptive and increase cost to 
taxpayers.
    In closing, employers of temporary workers need not fear 
employer responsibility. It is an essential part of health 
reform which will expand access to affordable health insurance 
to millions of Americans. Mr. Camden of Kelly Services writes, 
``Someone suggested that higher penalties imposed on staffing 
firms will narrow the cost advantage of using temporary 
employees and thus, weaken demand for our services. I think 
that concern is misplaced.'' Rather, Mr. Camden sees 
significant opportunity that the Affordable Care Act will 
``accelerate the growth of non-traditional workers and remove 
longstanding barriers to employment options.''
    Mr. Chairman, this concludes my testimony and I am happy to 
answer any questions you may have.
    [The prepared statement of Spiro follows:]
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    Mr. Gowdy. Thank you, Mr. Spiro.
    Pursuant to committee rules, all witnesses are to be sworn 
before they testify, so I would ask you to please rise and 
raise your right hands.
    [Witnesses sworn.]
    Mr. Gowdy. Let the record reflect that the witnesses 
answered in the affirmative.
    All of us are subject to being called for votes at any 
minute, so in that case, we will go as quickly as we can to 
vote and then come back as quickly as we can so that we can all 
be good stewards of your time. We do not control the floor and 
the timing of votes.
    Mr. Spiro, are you familiar with the phrase pyrrhic 
victory?
    Mr. Spiro. Yes, I am.
    Mr. Gowdy. What is a pyrrhic victory?
    Mr. Spiro. It is a victory that at first is small but turns 
out to be not a victory.
    Mr. Gowdy. Right. It when you win the battle but all your 
soldiers die.
    Mr. Spiro. Correct.
    Mr. Gowdy. The gentlemen to the right of you just testified 
that they are going to lay off workers if this is not changed 
and yet you, and I would assume you would agree with me, they 
have better access to information with respect to their 
businesses than you do? Do you agree with that?
    Mr. Spiro. I agree he probably has more access to 
information about his workers than I do.
    Mr. Gowdy. That is not a trick question. They have better 
access to the numbers within their own business than you would 
have and they both testified that they are going to lay off 
workers if this isn't changed. I guess my question, and it may 
be a rhetorical question, are you better to have access to full 
health care and no job or are you better to have a job and a 
mini-med plan?
    Mr. Spiro. Mr. Chairman, they are still implementing the 
law. Treasury is still carefully implementing the law, so they 
do not have full information about how the law will be 
implemented.
    Mr. Gowdy. Which raises another point. Did you testify 
before any committee or subcommittee when they were debating or 
considering the Affordable Care Act?
    Mr. Spiro. No, I did not.
    Mr. Gowdy. Do you know anyone who did?
    Mr. Spiro. Yes.
    Mr. Gowdy. You do? How many committee hearings did they 
have?
    Mr. Spiro. There were several committee hearings over a 
span of many years leading up to the passage of the Affordable 
Care Act.
    Mr. Gowdy. And amendments were able to be offered?
    Mr. Spiro. I can't speak to that.
    Mr. Gowdy. Do you know if any representatives from the 
businesses to your right were able to give their perspective on 
it?
    Mr. Spiro. I am happy to go back and search through the 
hearing record.
    Mr. Gowdy. What do you think the Speaker meant when she 
said ``We will have to pass it to see what is in it?''
    Mr. Spiro. I think she meant perhaps that the benefits of 
the Affordable Care Act only will be realized in 2014. It will 
take some time for the general public to become comfortable 
with this law, but I think I agree with the Speaker that once 
people have experience under the law, as they have had in 
Massachusetts, the public overwhelmingly supports that law.
    Mr. Gowdy. Mr. Uprichard, you have such a good reputation 
in the State of South Carolina personally and your business 
does as well. The thing I was struck by when you and I met and 
talked is there wasn't a partisan comment that came out of your 
mouth. There wasn't an ideological comment that came out of 
your mouth. There wasn't a political comment that came out of 
your mouth. To this day, I do not know your politics. Frankly, 
it is none of my business.
    The entire extent of our conversation was your concern for 
whether or not you were going to have to lay off your workers 
because of this. I would like you to tell me--take a minute or 
minute and a half--tell me this has nothing to do with politics 
from your perspective. This is all about saving your business 
and allowing you to provide jobs to people that you care deeply 
about and you are genuinely fearful that if this is not 
changed, you are not going to be able to keep them.
    Mr. Uprichard. You are correct, that is really what keeps 
me up at night. When we look at our staffing business, the 
margins are not significant, they are thin. When we have 
significant increased costs we can't pass on to our customers, 
it becomes a mathematical problem.
    We also take on significant risk with our staffing 
business, personal guarantees that I personally guarantee 
millions of dollars in working capital for this staffing 
business to run. As a business owner, one of the things I have 
to do is a cost benefit and risk analysis. As the margins 
erode, the risk is too great and it doesn't make sense to move 
forward.
    The challenge with that is we have built a great company 
and I have 50 employees who have been with us for several 
years, people that I am friends with. I coach their kids in 
soccer, I see them all the time out in the community and they 
earn high wages. The challenge will be that we will no longer 
be able to move forward with temporary staffing as part of the 
services that we offer which means I will reduce my 
infrastructure resulting in probably at least half our 
employees losing their jobs.
    With the impact on our industry, they really aren't able to 
go get jobs with other staffing companies because they will 
also be impacted as well. That is what keeps me up at night and 
that is what is important because that is what I am responsible 
for, is making sure we provide a paycheck to those 50 employees 
as well as the temporary employees we have out on billing on a 
weekly basis.
    Mr. Gowdy. Thank you, Mr. Uprichard.
    I would now recognize the gentleman from Illinois, the 
ranking member of the subcommittee, Mr. Davis.
    Mr. Davis. Thank you very much, Mr. Chairman.
    Again, I want to thank the witnesses for being here.
    Mr. Lenz, let me ask, what would you say are the basic 
reasons for temporary employment?
    Mr. Lenz. That is a broad question and there are many 
answers. Some of them are from the worker standpoint and others 
from the business standpoint. Employees use temporary help most 
often as a stop gap when they are out of work, looking for new 
work or simply looking for a different kind of opportunity. 
Students, retired people make up a huge portion of the work 
force. In the current environment, lots of people are 
unemployed and the only work they can find is temporary work.
    The reason why temporary jobs constitute such a huge 
portion of the new jobs that have been created since the 
recession technically ended in June 2009 is precisely because 
of business uncertainty or concern about making a commitment to 
permanent hire, but they still need to get the job done, so the 
temporary employees are a way for them to get the job done and 
a way to keep a substantial portion of the population employed. 
That is a unique situation in the current environment.
    From the business standpoint, more generally, I think the 
key word is flexibility. Most labor economists recognize that 
flexible labor markets is one reason why we have had in the 
past and hopefully will again soon in the future, such a 
dynamic economy because employers can make employment decisions 
based on the needs of their businesses and the conditions in 
the economy and use labor as needed.
    I think it is also important to point out that temporary 
jobs represent a relatively small percentage of non-farm jobs 
on a daily basis, really less than 2 percent, but we play a 
disproportionate role in the economy because we provide that 
flexibility to both employees and to employers.
    Mr. Davis. Let me ask, would a diminution of temporary work 
foster an increase in full-time work?
    Mr. Uprichard. I don't think so, perhaps at the margin, 
some, but there is such reluctance on the part of businesses to 
over hire and to burden themselves with workers they cannot 
sustain and cannot support because the business is not there 
that I do not think that shortfall would be made up in 
permanent jobs by any means.
    Mr. Davis. Mr. Gauss, do you think seasonal work becomes a 
big factor in this as well?
    Mr. Gauss. Yes. Seasonal work, where I come from, usually 
has to do with agriculture and you do not find temporary 
employees, by definition, in the agricultural seasonal work but 
I have friends in Miami and New York and the seasons for the 
hotel workers, the restaurant workers, and once the season is 
over, then they go someplace else and put them wherever else 
they are needed. Could I expand a little on your question?
    Mr. Davis. Yes.
    Mr. Gauss. When I first started this years and years ago, 
basically when someone would call us it was because someone was 
going to be out on vacation. As time has gone by, most of my 
business is manufacturing. Light industrial is what we call it 
in our industry. Industries, especially with the global 
economy, have to be more flexible.
    To answer your question, if our industries were only doing 
business in the United States of America, there may be more 
permanent hiring--they are scared to death--but it is not and 
we are competing against a lot of low wage countries. For our 
manufacturers to stay flexible, it protects the jobs of their 
permanent employees. If they have too many permanent employees 
onboard, they have to lay off a ton of people. If they layoff 
temporary staff here, we can put this temporary staff someplace 
else.
    Mr. Davis. Finally, quickly, do you think that under the 
Affordable Care Act more small businesses will be able to 
provide some form of health care for their workers than without 
it?
    Mr. Gauss. Small business is defined as what?
    Mr. Davis. Individual companies with 25 or less employees?
    Mr. Gauss. It doesn't apply to me. Actually, I am two 
businesses. I am considered a large business by statute, yet we 
have less than 50 permanent employees.
    As I said, my portion right now is $80,000 a year; my staff 
pays about $40,000 a year. We have 16 people and there is a 
$5,000 deductible and a $10,000 family deductible. To answer 
your question, I have no earthly idea. I would love to think 
mine would come down.
    Mr. Davis. Thank you very much, Mr. Chairman.
    Mr. Lenz. Mr. Chairman, may I respond to Mr. Davis briefly 
on the small business aspect of this? I think it is an 
important question and a good question.
    The problem is the definition of small business rarely does 
a staffing firm very much good and the reason for that is most 
staffing firms have very small permanent staffs and large 
numbers of temporary employees that come and go. If you were to 
measure the size of the company by revenue, they might be small 
under Small Business administration standards, but by head 
count standards, they almost always exceed 25 and even 50 and 
with respect to the State health insurance exchanges, they have 
more than 100, and you have to be awfully small to meet those 
head count thresholds. The vast majority of staffing firms 
cannot meet them.
    Mr. Davis. Thank you, Mr. Chairman.
    Mr. Gowdy. I thank the gentleman from Illinois.
    The Chair would now recognize the distinguished gentleman 
from Arizona, Dr. Gosar.
    Dr. Gosar. Mr. Chairman, I would like to submit for the 
record, testimony from a ski area in Flagstaff, AZ which I 
would like to highlight that talks about temporary workers.
    Mr. Gowdy. Without objection.
    [The information referred to follows:]
    [GRAPHIC] [TIFF OMITTED] 73613.029
    
    Dr. Gosar. This letter basically highlights what we do in 
the west when we have temporary solutions as far as utilizing a 
ski area that may operate as little as 6 weeks out of a year, 
and as many as 4 months out of a year. That gives us a great 
idea.
    Mr. Spiro, have you ever run a business?
    Mr. Spiro. No.
    Dr. Gosar. So you have never signed the back end of a 
paycheck?
    Mr. Spiro. That is correct.
    Dr. Gosar. Mr. Gauss, you have been in business for 30 
years; I was in business for about 27 years in health care, by 
the way. How much has your overhead gone up in the 
administrative aspect in regard to rules and regulations?
    Mr. Gauss. I would say a good 75 percent over the last 
eight or 9 years.
    Dr. Gosar. Interesting.
    Mr. Spiro, do you think the government has a right to turn 
out the lights on a business?
    Mr. Spiro. No, but I do not think they are turning out the 
light on business.
    Dr. Gosar. How would you answer these two gentlemen if 
these rules go into effect, and they are fairly nebulous rules, 
how would they stay in business?
    Mr. Spiro. Congressman, I have not seen all the numbers and 
assumptions they have used. All I can tell you is that the CBO 
studied this issue comprehensively. They looked at all the 
studies out there and concluded that the effects of the 
Affordable Care Act on the labor markets would be purely 
marginal.
    Dr. Gosar. It actually shows--lets us go back and 
recalibrate that. It actually shows that we lose a significant 
amount of jobs and costs incredibly more than what was 
originally orchestrated. Is that true?
    Mr. Spiro. I disagree with your conclusion.
    Dr. Gosar. That isn't what the CBO said?
    Mr. Spiro. They said there would be marginal effects.
    Dr. Gosar. Let me ask you a question. You are familiar with 
the Massachusetts model?
    Mr. Spiro. I am somewhat familiar but I am not from 
Massachusetts.
    Dr. Gosar. But you cited it, did you not?
    Mr. Spiro. That is correct, I did cite it in my testimony.
    Dr. Gosar. Have premiums gone up?
    Mr. Spiro. They have gone up as they have gone up 
everywhere around the country.
    Dr. Gosar. So it is not a solution?
    Mr. Spiro. It was never intended to lower cost. They are 
now engaging in a second round of payment reforms intended to 
lower costs.
    Dr. Gosar. What you are saying to me--you actually 
highlighted it for me--it was a solution process but it is not 
a solution process because we have seen these premiums going up 
all over the place.
    Mr. Spiro. It was a solution to the problem of the 
uninsured and on that score, Massachusetts has been found to be 
wildly successful and popular, reducing the uninsured rate to a 
couple of percent.
    Dr. Gosar. Let me ask you the question, where was that 
money dumped? Was it on the backs of the businesses or on the 
taxpayer? Let me answer it for you--on the taxpayer.
    Mr. Spiro. It was from taking the cost of uncompensated 
care and redistributing it so that it was not being shifted 
onto higher premiums for employers.
    Dr. Gosar. So let me ask the next question. Premiums went 
up then or went down? From what you just said, it should have 
gone down. They went up, sir. When you run a business you 
understand how those dynamics work and obviously you need to 
spend some time in the private sector before you start pulling 
out rules.
    How do you feel about that, Mr. Gauss? Does the government 
have the right to turn your lights off by these rules and 
regulations?
    Mr. Gauss. No, sir, they do not.
    Dr. Gosar. It seems to me there was a lot of nebulism in 
this. We talked about mini-med plans. We asked the Secretary to 
define the number to use in mini-med plans and holy cow we went 
off on tens of millions of dollars and gave waivers to 1,500 
industries, picking and choosing. Do you think that was fair?
    Mr. Gauss. No, I do not.
    Dr. Gosar. How do you feel about that, Mr. Uprichard?
    Mr. Uprichard. I would agree with Mr. Gauss, I do not think 
it is fair. We are trying to run a for profit business, we are 
trying to make a difference in peoples' lives. As we have seen 
over the last few years, even with our current economy, it is 
not easy. More regulations, more increased costs that we cannot 
pass on to our customers will force us out of business.
    Dr. Gosar. A business is run on a somewhat fairly certain 
environment. You have to have some variance in making sure you 
are able to, God forbid, make a profit because that is the only 
way you can open your doors, keep your doors open to do that. 
Do you see the environment that was created by this law making 
it more certain or less certain?
    Mr. Uprichard. I see it becoming less certain because the 
forecasting will be much more difficult. We look at hours right 
now but we will have to look at hours in a very different way 
because of the fluctuation in hours of the temporary workers, 
it will be incredibly difficult to forecast and people moving 
in and out of coverage will also be very difficult to forecast. 
The administrative and compliance piece will really be 
problematic for our business.
    Dr. Gosar. Thank you.
    Mr. Gowdy. I thank the gentleman from Arizona.
    The Chair would now recognize the distinguished gentleman 
from Maryland, the ranking member of the full committee, Mr. 
Cummings.
    Mr. Cummings. Thank you, Mr. Chairman.
    I have been listening to all of this and I was just 
wondering, Mr. Uprichard, you are from South Carolina?
    Mr. Uprichard. Yes, sir.
    Mr. Cummings. You realize in 2009, 16 percent of the people 
in South Carolina had no insurance? Did you know that?
    Mr. Uprichard. No, sir, I did not know that.
    Mr. Cummings. It is a fact. I ran a small law firm for 
years and we had to do some sacrificing to provide our people 
with insurance but we also wanted healthy people. I know you 
are a responsible business person and I respect what you are 
doing. I know business is hard. If you were to testify before 
folks in a hearing like this, I know you would want people to 
be insured, would you not? You would want people generally to 
be insured?
    Mr. Uprichard. Yes, sir.
    Mr. Cummings. Because if they are not insured, in many 
instances, as in my district, they die. I want you to 
understand that, dead, gone. I am just wondering what solution 
would you have, if any, you don't have to answer this, to help 
people get insurance? I am not saying this is the answer. Do 
you have an answer on that or does it matter? Do we just let 
them die?
    Mr. Uprichard. No, sir, we do not let them die, but we 
create a model that is practical and provides flexibility and 
has, for example, a 12-month look-back rule.
    Mr. Cummings. Mr. Spiro, they asked you about the 
Massachusetts model. I find it so interesting that obviously 
when Governor Romney was the Governor, he must have felt there 
was a need for some kind of care act and opponents of the 
Affordable Care Act ignored the reality that the health reform 
law could have positive impacts on the economy in addition to 
reducing the deficit over the next two decades, the ACA could 
result in significantly improving health outcomes in this 
country.
    The number of people without health insurance rose in 2010 
and is estimated to be 49.9 million Americans, an increase of 
900,000 from 2009. Expanding health coverage definitely 
improves health outcomes by helping people obtain preventive 
care. A large part of the Affordable Care Act of course is 
trying to help people stay well so they can have employees, am 
I right, because if you are sick, you can't work?
    Mr. Spiro. That is correct, Congressman. Of course it 
benefits employees and improves their health but we can't 
forget how that also benefits employers. As I said in my 
testimony, it reduces absenteeism and increases productivity. 
That will ripple through the economy. It also deals with the 
problem of job block where people feel like they can't move to 
another job where they might be more productive. All those 
benefits are for workers but also their employers.
    Mr. Cummings. The ACA also includes a provision in which 
certain employers, those with at least 50 full-time employees, 
would pay a penalty for not offering health care coverage or if 
the insurance they offer does not meet certain criteria and at 
least one of their workers receives a subsidy from individuals.
    My colleagues on the other side have argued that this 
penalty would dramatically lead to sharp reductions in 
employment. In contrast, the CBO has concluded that such 
penalties on firms with 50 or more employees that do not offer 
health insurance would have little effect on hiring.
    Mr. Spiro, do you believe that such penalties will force 
employers to dramatically change their hiring practices? I have 
heard the testimony of these gentlemen. This is the other part. 
Mr. Spiro, the State of Massachusetts also had an employer 
responsibility provision in their health plan which served as 
the model. I think we need to make sure it is clear. Mr. 
Romney, who is now running for President, who now acts like he 
doesn't like his own plan, some have called it Romneycare but 
my understanding is that the employer responsibility provisions 
of Romneycare are much stricter than those in the ACA with 
penalties applying to employers with 10 or more full-time 
employees. Has Massachusetts seen a decline or increase in 
enrollment in employer-based coverage?
    Mr. Spiro. You are right to point out that the 
Massachusetts employer penalty is much broader in scope. Even 
so, the vast majority of employers are exempt. That is the key 
to remember that the employer responsibility under the 
Affordable Care Act will exempt the vast majority of employers.
    As you said, the CBO has studied this issue. It will have 
very marginal effect on the labor market and employment.
    Mr. Cummings. Thank you. I see my time is up.
    Thank you, Mr. Chairman.
    Mr. Gowdy. I thank the gentleman from Maryland.
    The Chair would now recognize the distinguished gentleman 
from Indiana, Mr. Burton.
    Mr. Burton. Who was the chairman of this committee for 6 
years. That is my ugly face up there on the wall. I have been 
around here for a long, long time, 29 years. How old are you, 
young man?
    Mr. Spiro. How old am I?
    Mr. Burton. Yes.
    Mr. Spiro. Thirty-six.
    Mr. Burton. You were 7 years old when I came to Congress.
    Let me start off by saying to my colleague, my good buddy 
down there, that in Indiana we don't let people die. If people 
don't have insurance, they still get to go to the emergency 
room and they do get coverage. I think it is probably that way 
in every part of the country.
    There is no question about it, Mr. Spiro, we need to make 
some changes in health care. You are absolutely right. We have 
come up with a bill that we think solves that problem in a 
little more effective way than the Affordable Care, we like to 
call it the Obamacare Act.
    We believe that small businesses ought to be able to band 
together to buy insurance like major corporations do so they 
can get the better rate. We believe you ought to be able to buy 
insurance across State lines so that companies out West or in 
the Midwest can compete with companies in the East.
    We believe there ought to be medical savings accounts with 
tax deductible options in there so that people and the 
employers put money into an account; if the people don't use 
that money, say $3,000 a year, it is carried over to the next 
year and the next year. Then there is a major medical policy 
above that which takes it to $100,000 or more. There are a 
whole host of things in our bill that does not cause the 
Federal Government to start sticking its nose into the private 
sector, but you are absolutely right, we do need to make 
changes.
    I am now the chairman of Europe and Eurasia on the Foreign 
Affairs Committee. I just got back from Greece. Greece has had 
a government that has from cradle to grave taken care of 
people. They stuck their nose into everything. Do you know what 
they are doing to salaries today? They are cutting them by 40 
percent. Do you know what they are doing to retirement 
benefits? They are cutting them by 40 percent. They are raising 
taxes on property and doing it through the utilities over 
there. I talked to a policeman who was very supportive of the 
government until they started doing this and realized that 
government control over the private sector only leads to chaos.
    The same thing is happening in Italy, in Spain, and in 
Portugal. In Ireland, they had a little different situation but 
they are in bad trouble as well. All those things do have an 
impact on the United States of America.
    I guess the thing I would like to get across is the private 
sector is the engine that drives this country, that makes this 
country great, not government, not government regulation or the 
government sticking its nose into the private sector. We need 
to get government out of the way so the private sector can 
flourish and create jobs.
    The only way our government can create jobs is to take 
taxpayers' money. You mentioned the term redistribution of 
wealth. The only way the government can do that is to take 
money away from the guy that is an entrepreneur that's creating 
jobs and give it to somebody else from the government. It just 
creates a big mess.
    Right now I do not know how many regulations we have added 
to the mix in the last couple of years but I think it is about 
500 to 600 or more. That is another albatross around the neck 
of the private sector. It is just really sad.
    When I hear a businessman like Mr. Gauss and Mr. Uprichard, 
I did not hear you, Mr. Lenz, I apologize because I was late 
getting here, when I hear them telling us that they are going 
to lay off people because of government intrusion into their 
business, whether healthcare or anything else, it really 
bothers me. I had my own business, and I started it by myself, 
and I know what it means to have government sticking their nose 
into your business.
    You are absolutely right. We need to do everything we can 
to make it more affordable for people. The way to do that is, 
as I said, to get government out of the way, to create 
incentives for business and industry to provide insurance, to 
give tax incentives for people to do that, not to have the 
government come in and say you have to do this, because it only 
leads to a really big problem.
    I hope that you and other young people like you who are 
interested in doing good for the country will take a little 
look at history and look at what is going on in other countries 
around the world where the government has been very intrusive 
because it does not work. It didn't work in Russia, it does not 
work in Greece, it will not work in Spain, it has not worked in 
Italy and it is not going to work here.
    What will happen is government will cause the free 
enterprise system to collapse. We need to be a help to the 
private sector by creating incentives for them to do the things 
that need to be done. That is why the approach we think needs 
to be taken is to create incentives for the private sector to 
do the right thing without government intrusion.
    I will not ask any questions. I just thought I would get 
that off my chest, Mr. Chairman. Thank you.
    Mr. Gowdy. Thank the gentleman.
    Mr. Spiro. Mr. Chairman, may I respond?
    Mr. Gowdy. Let me do this because they have a call for 
votes and only because the gentleman from Missouri, Mr. Clay, 
is such an efficient questioner and is a pithy with both his 
questions and knows you will be with your answers, we will try 
to get the gentleman from Missouri in so we do not have to go 
vote and waste a hour of your time. With that, the 
distinguished gentleman from Missouri.
    Mr. Clay. Thank you so much, Mr. Chairman. I will be 
efficient and keep it brief.
    Some have argued that employers face considerable confusion 
and uncertainty about the ACA including what it will cost 
employers in 2014, thus making planning for the future 
difficult. However, the Federal Government Web site 
www.healthcare.gov was launched after the ACA was enacted. 
Managed by the Department of Health and Human Services, this 
Web site provides comprehensive information about the 
provisions of the ACA, including a small business site with up-
to-date guidance on small business tax credits, coverage 
options and reinsurance for retirees, among other things.
    Mr. Spiro, do you believe there is a lack of information 
available for small businesses explaining the provisions of the 
ACA?
    Mr. Spiro. Congressman, there is a wealth of resources, as 
you mentioned, www.healthcare.gov, there are calculators so 
that small businesses can figure out if they are eligible for a 
tax credit. In addition, on this very issue with respect to 
temporary workers, you can see the Treasury Department is being 
very responsive and they sent out a Notice for Request for 
Comment before even issuing a proposed rule. They are gathering 
those comments and they are going to then issue a proposed 
rule, then get more comments before issuing a final rule. It 
has been a very transparent process and they have gone out of 
their way to solicit feedback from stakeholders such as the 
other witnesses at the table.
    Mr. Clay. Could the Federal Government do a better job of 
making sure the necessary information is available for 
employers as they seek to comply with the ACA's requirements?
    Mr. Spiro. I think there is lots of information out there 
and I think hearings like this are an important piece of that 
to make the public aware of issues surrounding implementation. 
Obviously, always more can be done but I am very pleased with 
the way the administration has been transparent and seeking 
comments and being responsive.
    Mr. Clay. On that point, for the entire panel, the IRS, HHS 
and Treasury have all conducted outreach to stakeholders to 
provide comment and guidance on a broad range of employment 
definitions. Did any of you provide comment to the agencies or 
departments promulgating these guidelines to express your 
concerns? Mr. Lenz.
    Mr. Lenz. Yes, sir, we have. We have been working very 
closely with the administration and we do appreciate the 
efforts that are being made, but it is a complex subject and we 
are concerned they may not get it right or may not have the 
legal authority to do what they need to do to fix the concerns 
that we have.
    Mr. Clay. Thank you. Mr. Uprichard.
    Mr. Uprichard. Yes, sir, Mr. Clay, we have. As a matter of 
fact, I have been working closely with the Deputy of Health and 
Human Services for the Southeast, Anton Gunn. He is actually 
coming to Greenville to speak to some of our customer base on 
November 15th. When I was coming to D.C., he did try to make 
some introductions for me to the folks at the Treasury 
Department and Internal Revenue Service but they were 
unresponsive with the request for a meeting.
    Mr. Clay. Thank you. Mr. Gauss.
    Mr. Gauss. Yes, sir, I did, mostly through Mr. Lenz because 
I have been fighting on the State level because of unemployment 
taxes going through the ceiling.
    If I could answer about the Web site information, it is 
thorough enough for me. That is where I got the $711,000 that 
is going to put me out of business. That is how I understood it 
and I am in the trenches. I am on the ground, boots on the 
ground.
    Mr. Clay. Thank you for that response. Mr. Spiro, would you 
care to respond to Mr. Burton's comment?
    Mr. Spiro. Do we have time, Mr. Chairman?
    Mr. Gowdy. You have to solve all the world's problems in 37 
seconds.
    Mr. Spiro. I would just respond that the Affordable Care 
Act is fundamentally a market-based solution. It is not single 
pair healthcare as you would find in Europe. I think that is 
why Mitt Romney supported it in Massachusetts. I would say when 
you raise the issue of Greece and debt problems in Europe, that 
is exactly why the Affordable Care Act was necessary. The CBO 
found that it reduced the deficit $143 billion over the first 
10 years and continues to reduce the deficit in subsequent 
decades. I think repealing the Affordable Care Act would have 
the opposite effect and would worsen our debt problems.
    Mr. Gowdy. On behalf of all of us, we want to thank our 
witnesses for your expertise, for your collegiality toward one 
another, and for your helpfulness to this committee on what is 
a very important issue. Thank all four of you.
    I am not singling out anyone, but Mr. Uprichard, safe 
passage back to Heavens Gateway in the up State of South 
Carolina.
    With that, the committee is adjourned. Thank you.
    [Whereupon, at 10:39 a.m., the subcommittee was adjourned.]

                                 
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