[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]


                  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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                        U.S. GOVERNMENT PUBLISHING OFFICE
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2016
                     
                      
                      
                      
                      COMMITTEE ON WAYS AND MEANS

                     DAVE CAMP, Michigan, Chairman

SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
KEVIN BRADY, Texas                   CHARLES B. RANGEL, New York
PAUL RYAN, Wisconsin                 JIM MCDERMOTT, Washington
DEVIN NUNES, California              JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio              RICHARD E. NEAL, Massachusetts
DAVID G. REICHERT, Washington        XAVIER BECERRA, California
CHARLES W. BOUSTANY, JR., Louisiana  LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois            MIKE THOMPSON, California
JIM GERLACH, Pennsylvania            JOHN B. LARSON, Connecticut
TOM PRICE, Georgia                   EARL BLUMENAUER, Oregon
VERN BUCHANAN, Florida               RON KIND, Wisconsin
ADRIAN SMITH, Nebraska               BILL PASCRELL, JR., New Jersey
AARON SCHOCK, Illinois               JOSEPH CROWLEY, New York
LYNN JENKINS, Kansas                 ALLYSON SCHWARTZ, Pennsylvania
ERIK PAULSEN, Minnesota              DANNY DAVIS, Illinois
KENNY MARCHANT, Texas                LINDA SANCHEZ, California
DIANE BLACK, Tennessee
TOM REED, New York
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
TIM GRIFFIN, Arkansas
JIM RENACCI, Ohio

        Jennifer M. Safavian, Staff Director and General Counsel

                  Janice Mays, Minority Chief Counsel


                            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

 
                  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:]

ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS 

CONTACT: (202) 225-3625 FOR IMMEDIATE RELEASE

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.

    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/.

                                 

    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 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 full-time 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.
    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.

  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.
    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 
Hilton-branded 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 exchange is not nearly as bad as losing 11 hours of 
work, 27\1/2\ 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 
common-sense 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, technically, the counting for look-back purposes should 
have already 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 full-time 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 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 2\1/
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 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 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 of the number of people you put at risk. Can I represent 
community 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.
    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. 
When you're talking about doubling and tripling your health 
insurance 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?
    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?
    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?
    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 
full- and 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, 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 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 single-payer. 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 32\1/2\ 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 part-time. 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 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.
    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.
    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.
    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 migrate 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, first-time 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 full-time 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 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 
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--9\1/2\ 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 reasonable 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?
    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 
part-time 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.
    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.
    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 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.
    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 
full-time, 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?
    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 
labor-intensive, 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.''
    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 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.
    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 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 to the passage of ObamaCare, they had been taking 
part in a program 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.
    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 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.
    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 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.
    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.
    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 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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