 Good morning. This hearing will come to order. Less than seven months ago the administration announced that they'd delay that they would delay the employer mandate for a year. They acknowledged that when many 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 reprie from the employer mandate the pain Obamacare is inflicting both on job creators and hard-working 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 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 health care 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 Berkeley Center for Labor Research and Education concluded and I quote those at highest risk are workers in predominantly low-wage industries that are right on the cusp of what is considered full-time work under the law end quote. These are Americans living paycheck to paycheck who are already paying more for food and more for their health care and are now being heard again by the burdens of the president's health care 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% of those impacted do not have college degrees. I'm sure every member that sits here today has heard stories from families who've 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'm 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 represented Michigan told his story of struggling to find a job as a result of the law writing and I'm quoting here I'm currently unemployed and seeking work in our greater mid-Michigan area. After looking for employment for some time now I've 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 denial 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's 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 towards 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 America and 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'll do today. Before I recognize Ranking Member Levin for the purpose 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. 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. Today this committee is holding a hearing on an issue that has been rehashed many times. 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% 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 Massano of St. 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 continue its endless pursuit of undermining the 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's what they are unlikely to say. First, a very small percentage of employers less than 1% 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% of businesses exempt, all but 5% 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 cut-off 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% 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. Two, since the Affordable Care Act was signed into law four years ago, private employers have added more than 8 million jobs. More than 90% 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 three million people who have enrolled now, can get private health insurance through the federal and state-based marketplaces. But unfortunately, for 1.6 million jobs 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, six 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. Thank you, Mr. Levin. I now want to welcome our panel of witnesses. First, I'd like to welcome Lonnie J. Chen, a research fellow for the Hoover Institution at Stanford University. And second, we will hear from Peter Anastas, the owner and co-founder of the main course hospitality group. And third, we will hear from Neil Troutwine, Vice President and Employee Benefits Council at the National Retail Federation. Fourth, we will hear from Thomas J. Snyder, the president of Ivy Tech Community College. And finally, we'll hear from Helen Levy, a research associate professor at the University of Michigan. And thank you all for being with us today. The committee has received each of your written statements. They will be made part of the formal hearing record. Each of you will be recognized for five minutes for your oral testimony. And Mr. Chen will begin with you. You are recognized for five minutes. 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 Lon Heatshaw. I'm 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'll 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 Kamp 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 disproportionately 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're 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 SeaWorld Entertainment, David's Bridal, several Subway restaurants, franchisees, and Land's End. Regal Entertainment Group, which operates more than 500 movie theaters across 38 states, cut hours for non-salary 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 11 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. Secondly, 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 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 record keeping and reporting requirements in complying with the 30-hour rule. Regulatory guidance issued recently by the Internal Revenue Service mandates complicated calculations and record keeping 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're expected to work full-time or are variable or seasonal employees. Even those employees that employers, excuse me, 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 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 health care 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. Thank you very much, Mr. Chen. Mr. Anasis, you are recognized for five minutes. Chairman Kamp, 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 Anasis, and I'm an owner and co-founder of Maincourse Hospitality Group, which owns and 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 over 500 people in the next 18 months. I appear here today on behalf of Maincourse Hospitality Group in 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'm 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 cost 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 on the company plan. We are taking on more costs per insured employee than ever before, and we are ensuring 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 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 one hour of work and going into it, going to an exchange is not nearly as bad as losing 11 hours of work, 27.5 percent of your work, and going to an exchange. We refuse to do that to our business or our workers who are only options 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 of 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 work week as a standard for workforce management. The ACA's provision requiring employees to provide coverage to full-time employees and defining a full-time work week 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 a half a century of established labor policy. Even though the employer mandate has been delayed for one 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 40 hours is a 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 try and to find ways to maintain financial stability while covering the deserving workers. Thank you for the opportunity to testify before you today and I look forward any questions you may have. Thank you Mr. Anastas. Mr. Troutline, you recognize for five minutes. Thank you Chairman Camp, ranking member 11 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 role for determining full-time employment. InterF 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 US jobs, 42 million working Americans. We believe that it's long past time to address specific problems with the ACA like the 30-hour definition. InterF 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 don't fit neatly into full and part-time categories. Compliance will be particularly challenging. The 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. InterF strongly supports the bipartisan interest in this issue and legislation like HR 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 maybe 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 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 real-time 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 one-year look-back. Ultimately it'll 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 in the Congress to consider specific changes to the ACA including the definition of full-time employment. It's 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. Thank you Mr. Troutline. I would now recognize the gentleman from Indiana Mr. Young for the purposes of introducing our next witness. Thank you Mr. Chairman. It's 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. Thank you. Mr. Snyder you recognize for five minutes. 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 Kamp and Ranking Member Levin for scheduling the hearings on this important matter and separately we'd like to thank Representative Young along with Representative Kind and Representative Paulson for sponsoring the bill to repeal the medical device tax with the goal of protecting thousands of very high paying job 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're to close the global attainment gap we must do all we can to keep it both affordable and accessible. Indiana as what said is a 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. 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 4500. Most are practitioners in their field working full-time in another job bringing their real-life real-time 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 four 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 adjunct faculty. We've done this with very limited guidance. Like most community colleges our funding does not provide for any large unfunded mandates such as the ACA 30-hour rule. The annual impact on us would be 10 to 12 million dollars with a total statewide health care bill today of 25 million so a 50% 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. More over 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 4500 adjuncts or what other aspects must be included in this determination. So to be cautious we have limited the hours of adjunct faculty that they 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 credential 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 due to 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 was 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're 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. Thank you Mr. Snyder. I love you recognize for five minutes. 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 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 was 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 insurance 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% of the U.S. workforce is part-time. This is a small effect 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 hours threshold than near the 30 hours 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 above 30 hours as Mr. Chen described in his testimony there are according to his calculations about two and a half million of these vulnerable workers right around the 30 hours 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 that 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 health care reform is likely to have important benefits for labor markets largely by alleviating the problem of job block. 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 one 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. 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 them to 29 they've lost seven 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% pay cut. My question is how does a 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. Chairman the 30 hour rule has a significant impact on someone like a part-time firefighter. 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 firefighters hours are cut back to 29 he or she would lose about $217 which is roughly a 30% pay cut. If the hours are cut from 35 to 29 the firefighters looking at roughly a 17% pay cut. So obviously the incentive to reduce those hours would be particularly damaging for the part-time firefighter. 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're 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 this rule is forcing local communities who can't afford to offer health insurance to them to impose 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 reference new research by the Hoover Institute. The research shows this rule impacts 2.6 million Americans, 89% of whom don't have a college degree and immediate income of under $30,000. Could you explain in more detail who this population is and why the 30-hour hits lower-income Americans so much harder than the rest of the population. The research that we've conducted is an update of the study from the University of California at 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 age of 19 to 64, currently working between 30 and 36 hours, family income below 400% of federal poverty which would make them eligible for the subsidies, the cost-sharing subsidies and 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% 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's 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 30-hour rule has the potential to hit quite hard. All right thank you. I now recognize ranking number 11 for for his questioning. 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 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% 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% 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. Andrews. Just Congressman Levin to go from an employer who's not offering insurance and he goes from 40 hours to 39 is barely a move at all whereas if you go from 40 to save all that money you certainly you certainly would be looking at lowering the amount of at lowering the amount of people you have at that level that you had to insure. Those are those people that don't insure them. But I certainly and all due respect it just seems like it flies in the face of almost rationality that if the it was 30 hours a week people would not be managing to that level to save so much money we're not it's just a large it's a large portion the health care is such a large portion of how much we have to pay to be doubly and tripling our cost our health care costs and to then 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. Yeah but that doesn't challenge the statement that in terms of the number of people you put at risk. Look I represent community colleges one of the largest in the nation. People work 35 hours how do they get insurance. Don't you want them insure. Representative Levin I think the issue for the community colleges are 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. Most of whom have full insurance and full time jobs and then then then add another you all you have to do is offer and they refuse. It's not going to increase your cost in most cases. We've done it. We've done for those who work 35 36 37 hours and don't have insurance. Don't you want them covered. So the 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 nine 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 4500 adjuncts or rely on an outside party. How many hours of work. That's an issue that has to be worked out. But you say in your testimony you want people covered. We want people covered. Okay now if they work 35 hours 36 hours and they don't have insurance do you want them covered. I think in general everybody in the country wants people to be working. So if they don't have insurance 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. Our concept really regarding our adjuncts is that they are part time and our expectation is we do not plan to give them insurance because we do 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. But that's an issue that has to be worked out. But that is the biggest issue for the community. Okay so then it should be worked out. But for you to say this is the problem with ACA and with health care 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 to a spouse. And you're essentially saying you want everybody covered but you don't want to cover them. We cover people working 35 hours or more with health insurance if they're working outside of the adjunct roles. We cover them today. All right thank you. Mr. Johnson's recognized. 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 twenties. 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 of work week. That's a loss of 12 working hours having worked at the grocery store for a long time. Jillian was up to nine dollars an hour. This meant she was losing 108 dollars a week. Worse that adds up to more than 430 dollars 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 and find part-time work to help make ends meet. How does the 30 hour rule impact waiters and waitresses? 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 nine dollars an hour working 39 hours a week they would earn approximately 350 dollars a week. If they're cut back to 29 hours they lose 90 dollars a week which is roughly a quarter, 26 percent pay cut. If the worker, if the waiter works 35 hours a week they earn 300 dollars. If you cut them to 29 hours a week they lose 54 dollars 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. Thank you and Mr. Nassos in your testimony you state that because of the 30 hour rule quote 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? Well Congressman I get out of the restaurant business and stick stuck with the hotels I found it a lot more profitable but for our people over 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 small business I'm not like Apple Computer or some sort of thing I have like basically 80 room hotels so you're a relatively small profit margin. When you're talking about doubling and tripling your health insurance costs you just there's got 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 you're going to cost four or 5,000 just to raise up a few hours it makes it extremely difficult to do. And one last thing small businesses in this country I just think sometimes we miss the point 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 and to drive it I feel like we're driving a wedge between us and it's just it's going to make it so hard when they want more hours to say no to them. Thank you. Thank you. Mr. Dr. Chen doesn't that cause a reduction in social security benefits and won't that have an effect on increasing poverty among seniors down the line? 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. That's disability also does it not? Yes sir. Thank you. Thank you Mr. All right Mr. Rangel. Thank you Mr. Chairman and let me thank this panel and sell them 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 country to give access to health care for 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 and 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 and are there any similarities between the ACA and the program that Governor Romney supported in Massachusetts? Congressman Rangel I believe that Governor Romney and President Obama share an interest in ensuring that as many Americans receive access to quality health insurance coverage as possible. I have no doubt that's a general feeling by Americans but the chairs restricted me to five minutes and I'd rather talk about the plan rather than the man in terms of the overwhelming belief that it would be good if we could afford it. So what are the similarities between the man as relates to the plan? Certainly there are elements structurally that are similar. I know that's what I'm asking and why are they? The creation of health insurance exchanges, the notion of individual responsibility, those are certainly similar between the plan. And the mandates? Pardon me? And the mandates? The individual mandate as well as the fair share responsibility are? Well let me ask you this then with those similarities is 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 Ramney's health plan? 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. So what would you suggest that we repeal the ACA? Yes sir, I would. How would you go up? 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? I would suggest the first step would be to have a replacement for it Congressman, that repeal alone would be insufficient. 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? Well. 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? I'd make two points Congressman. First of all, unfortunately many Americans have already had their plans canceled. Second of all. But I'm talking about the millions of people that just signed up. I think it's important that there be some mechanism to ensure that people who have insurance are able to retain that insurance. Now that's where we want to get some area of agreement. Could you give any idea rather than repeal of what we got? Because I think most all the Republicans and most of the witnesses, not this panel of course, believe in repeal. But unlike you, they have 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 on 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 would 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? Congressman, I would suggest one of the things we can do is fix the 30 hour rule which we're here talking about today. So what? Is to fix the 30 hour rule which is contained in clarion mandate which we're talking about. We're talking about people that work 40, 50 hours. They 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 nimes sound 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. 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. All right. Thank you. Mr. Brady is recognized. Thank you, 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. Come and yield. Would the gentleman yield? You know, I never yielded. He has a Canadian plan, a single payer reference. 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 just 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 if we go back 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 nine 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 rules forcing workers in a part-time work with less of a chance of health care. So Dr. Chen, what happens if we return to the 40-hour workweek? 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? 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. Thank you, Ms. Tran. So what happens to you if we do weigh with the 30-hour rule and you're able to bring your folks back up in their hours? Can you hit that microphone? Quite simply, it greatly simplifies our life. I mean, when I talk about doubling or tripling a cost, I'm not even talking about the administrative cost. I talked to our CEO before I came down here and asked him what he thought and he said anything. He said any relief at all to get close to 40 hours? Will workers' hours likely increase? It's your place? Absolutely. I mean, in other words, instead of having to manage all the time and always keep this ledger where you're always trying to figure out are they over 30 hours and therefore, as an average, you're going to cost you many thousands of dollars more. I mean, you have 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 against my interests. Mr. Trotline, Retail, does this help increase workers' hours if we do weigh with the 30-hour rule without a doubt? It makes the compliance cost easier, 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. Snyder, do you think adjunct professors at community colleges want to see this 30-hour rule changed? Absolutely, because the bulk of them are making decisions that are countered to their own best interests and certainly counted 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 would be offering health care to everyone and trying to get more people into that 40 hours because I think the 30-hour actually puts 40-hour plans at risk because somebody has to pay for that cost. Good point. Thank you, Mr. Chairman. Thank you, Mr. McDermott. Thank you, Mr. Chairman. Last week I read a headline did Obamacare break up the captain into Neil marriage? Now, a reasonable reader could write that off of sensational journalism but the way the right-ring media's 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 what think-tanks can come up with statistics to make their claim and what our panel is doing without any real evidence. They've got anecdotal stuff. I know more about the Community College in the state of Washington than I think probably anybody having been the chairman of the Ways and Meads Committee. They have used part-time employees and jerked their employees around for years to reduce their full-time equivalence. So it's not something new that's coming because of Obamacare. There are no penalties until 2016. So 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 today'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 and 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 would 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 ensure their employees? I mean is there no responsibility in this country? Are we supposed to we're talking in this committee we're going to lower taxes the corporate tax rate is killing America. We got to lower that corporate tax rate and we're not going to require to provide or offer insurance to their employees. Basically what this committee is deciding 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 for it till 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 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. It this is in my view a question that this committee has got to deal with whose responsibility is it for the health of American people and I like somebody said maybe this is the first hearing on single payer it probably is because if you keep working to kill what you've created under Romney care 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. All right you and I pay a thousand bucks a month. Mr. T. Berry is recognized. Thank you Mr. Chairman Mr. Chin 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 four 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 and a half 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 reduced the hours of 18 part time paramedics and fighter fighters public safety director Mike Michael Blackwell said and I quote we were scheduling most of our part time workers to about 39 hours a week with the Obamacare and the regulations that follow we 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 says make believe impact a typical paramedic who now is working less than 30 hours a week. Congressman Teaberry 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% of his or her pay in a similar fashion if it's cut from 39 excuse me from 35 down to 29 they lose about 17% of their pay so obviously there is a negative impact with respect to those folks. I ran into a lady at the grocery store who was working part time for a retail employer and she was provided healthcare. She lost her healthcare this month and her hours reduced to less than 30 hours a week and she was fine working part time her husband's an independent contractor did not get healthcare through his work and 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 on to 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 three million people who now are getting healthcare in the exchange who are forced off because they either no longer qualified because of 30 hour work week or as a spouse they lost their coverage through their working spouse. 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. So I received an email from a constituent you all but he heard 25 year old son-in-law was offered a full time position with a retail company in Ohio. He accepted the job eligible to receive healthcare benefits after six months on the job and according to her it was quote a godsend for him and her daughter who had an 11 month old baby at the time and her and her daughter was pregnant with another on the way after four months on the job because of the ACA requirement his employer cut his hours to less than 30 hours per week 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? Yes sir it is. Mr. Anastos pretty clear that the 30 hour rule is forcing employers to cut back on hours. You are beginning to talk about the food service industry white castles had quartered 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? In fact that grocery store was the same story I heard last week where a woman was looking off where she said the same thing and she or I always were cut. But you know I just like to say that we're not all record profits in 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 that so we're going to double and triple our health costs I mean small businesses like the golden goose and job creation I mean how much more can they put on us and but as far as managing to 30 hours yes those three new hotels which we'll be building and we're building them because we're building essentially with other people's money is that we will manage those to 30 hours because we have to find out how viable that business is. Thank you I yield back. Mr. Neils recognized. Thank you Mr. Chairman. This is not a big support 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? We've tried to keep the pit well we've tried to actually increase our percentage of full-time professors but the growth of the community college is not permitted so I'd say that we probably added about the ratios about the same we've gone from about 4,000 to 4,500 and from about 1,200 to 1,400 1,450. But it's generally a cost it's both a cost and an availability issue. Fair enough but as the trend line over this decade been to hire more part-timers than more full-timers? No I think our goal was to reduce our cost and actually hire more full-time on a percentage basis. And would it be conceivable that within the system that well let me ask you this what would a full-time faculty member carry for classroom hours? They're 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. So 15 hours? Full load, right. Okay is it conceivable that within the system that you would have two professors well teaching 15 hours where one might be considered full-time and the other might be considered adjunct? It might be. Okay that's kind of the point of this and I understand arguing this 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? 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. A tenured faculty member would sign a year-to-year contract? Ours are not tenured but they've always signed a year-to-year contract. Okay but generally if it would be the same it would be the same in a tenured agreement these would be the job requirements. Most tenured professors would sign a year-to-year contract? Well our professors all do. But I would suggest that that's probably not the case that most universities do. Well it's been that way for the school for decades so 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 of coursework then to be in class what would typically be nine to twelve 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. But in the state of New York today it's very clear that 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've not had to pay full-time benefits. I would say this having read the articles and I don't have all the detail I'm reading the article there's also the implication that there is a increase in professors who are non-tenured not exactly adjuncts which would be which would be a different page. Okay but fair enough okay fair enough right. I just wanted to see if we could clear some of that up. Dr. Levy productivity the whole notion of productivity of 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? It has, yes. Substantially? Yes I would say so. So could you link that notion of productivity gains perhaps to health care benefits and the security of one having health care? 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. But 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? Yes that's right. I mean so 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. All right. Thank you. Dr. Chen. I'm going to get thank you. I'm going to go two to one now so Mr. Reichert is recognized. Thank you Mr. Chairman. Dr. Chen how does the 30-hour rule impact school bus drivers? 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 35 hours to 29 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 100 school districts have reported making changes to hours for people like school bus drivers temporary and other workers or just outsourcing that work entirely. Thank you. Mr. Chairman and Dr. Chen of course we know this is not a make believe a 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 for bus drivers because of this rule. Without objection to order. 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 and Healthcare Coalition. Without objection so ordered. Thank you. Dr. Chen I'd like to follow up on a line of questioning that Mr. Johnson began as to what happens when people lose hours and earnings and as a result of the 30-hour rule. We know the businesses are reducing employers hours or reducing the size or the workforce in response to the 30-hour rule. So what happens to individuals unemployment benefits if they're laid off? Don't you unemployment checks for the unemployed go down if people work and earn less while they're employed? Yes sir that would be an impact. How about the 401k contributions based on earnings? Won't those go down as well? Yes sir that would also be affected. So wouldn't that cause retirement income to decline in poverty to increase down the line? There's no question that retirement security would be one of the side effects or less retirement security would be a side effect. Yes sir. Or are there any other examples of unintended consequences for the safety net from this misguided 30-hour rule that you can think of? You know the biggest one simply is the loss of wages. The other thing I would say is that the sort of 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. So we've seen recent examples of this target Home Depot other companies major companies have made the decision to migrate away from an offer of health insurance to part-time employees as well. And Dr. Chen from the data in the back of your testimony we find that the persons who are most vulnerable to Obamacure's 30-hour rule are young females with a high school education or less 59% of the vulnerable population are under age 35 63% are female 53% have a high school diploma or less. Is that true? Yes sir that is true. These are the groups who are most likely to lose hours and earnings as a result of Obamacure's 30-hour rule. Do you think the administration intended for these groups to lose hours and earnings? I would hope not sir. Won't many of them be single moms who are already struggling to raise children on a limited income? Unfortunately yes that may be the case. 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? Well I think that 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 that certainly will be the outcome. Mr. Chairman I yield back. Thank you. Dr. Rustani is recognized. Thank you Mr. Chairman. Leonard Frankes is a constituent of mine in Lafayette, Louisiana and 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 and 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 and 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 to a less than 30-hour work week. The company he made an economic decision the company is going to be penalized three to four million dollars per year under ACA if he didn't make this decision. Furthermore this 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? 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 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. Troutwine you represent the retailers is this the new normal? I fear it could be there is a one-year delay in the employer mandate penalties so I think that is softened glide 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 place that individual in my company so it's certainly not good from a standpoint of a part-time employee someone 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 for a time so again it's a question of how many dollars are in their pockets are they working under 30 hours or up towards 40 hours and certainly from that standpoint they're better off at that higher rate of compensation 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 without ejection so ordered Mr. Anastos it's been almost four years since the law passed and the employer mandate has been put on hold it would have gone into effect this month 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 it's funny you should ask I mean not funny you should ask but it's so I ask I've met with more people the head of 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 nail and jello to a wall to figure out really how much it's going to hurt us or not hurt us and it's 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 mean so I it's just so hard I don't know and that's so you're faced with tremendous uncertainty as you try to plan how to grow your business and create jobs that's the understatement of the area really truly truly thank you I yield back all right Mr. Doghead thank you Mr. Chairman thanks to our our witnesses there are those who believe that we're 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'd 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 in 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 hear this story about 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 three 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 College we have many adjunct faculty members that are working fewer hours than 30 they're 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% 9.5% 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 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 because of the exchanges in the Affordable Health Care Act I think of Ron Romero who is in the technology industry who talked about the advantages of avoiding job block that were offered by the Affordable Care Act that encourage the expansion and innovation in small business and it's to be remembered that this 30-hour rule did not come to us like mana 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 you know we really should not ask employers to cover halftime workers let's go with 30 hours as a reasonable compromise if we'd gone with 25 we'd be here today hearing about the 24-hour rule if we'd gone with 35 we'd be here today hearing about the 34-hour rule I think Dr. Levy you pointed out that if we'd used the 40-hour standard what would we have about three times as many people affected yes that's right three to five times as many workers potentially at risk of having their hours cut 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's the direction in which we have moved we have done so imperfectly we've done so with a considerable amount of bungling and the rollout of the Affordable Health 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 thanks gentlemen Mr. Smith you're recognized thank you Mr. Chairman and thank you to our panels all of you for sharing your insight and perspective I think it's very valuable and important and 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 at dishwashers earn $882 an hour just under $9 an hour I don't think anyone would say that provides a great deal of financial comfort but if they go from $39 a week earning $344 to $29 a week they would lose about $53 per week or the equivalent of a 17% pay cut and it's 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 and employers virtually everyone to contend with and so I would ask Dr. Levy can you point to perhaps some components of the healthcare law that reflect the differences between rural and urban areas of the country I'm not sure exactly when you're seeing urban and rural in terms of the labor markets do you mean? Well as it relates to this issue you know we know that unemployment rates vary drastically from one state to another not to mention regions of one state to another 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 Right and on the affordability topic would have you studied how the affordability of health insurance would impact the frequency of its purchase? Oh um yes we do know that people are more likely to buy things that when the price is lower yes but in terms of its practical application has that been a part of recent reviews or studies? I mean 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 take up 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 suggested 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 a better economic security Okay now you indicated in your testimony that because of the ACA such workers will be able to choose the schedules they prefer now right prior to that in context that you highlighted you know how people are in different situations are there some specific examples of people really being able to have more flexibility or more choice of the hours in the last few months I haven't heard any individual examples of someone saying you know saying 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 Okay because for a long time some folks have depending on their their personal situation have preferred to work part time would you agree with that The majority of part time employment is what's called voluntary part time employment yes people who work part time because they're 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's higher than usual at the moment because we're recovering from a recession still and even now it's less than half of the part time work force so the majority of part time workers are they want to work part time Okay and Dr. Chen have you ever affixed a dollar figure perhaps an hourly dollar figure on the value of health insurance I don't 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% affordability requirement contained in the ACA so I'm not sure if that gets at the exact question you're asking but I think the point is simply that it is more expensive for the employer to furnish to someone working 30 to 36 hours versus someone working 40 or more hours Okay thank you Mr. Chen Thank you Mr. Paulson's recognized Thank you Mr. Chairman you know this testimony really strikes home with me it's very similar very similar to what I'm hearing from a lot of folks in Minnesota employers particularly in the restaurant industry and retail industry in particular and also fire departments I mean there were there's no doubt that I've 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 fire departments volunteer firefighters or they're 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's a direct consequence that employees that have had good full-time jobs now have part-time jobs I know there's one restaurant tour that I spoke with in Minnesota he owns seven restaurants he's got 535 employees and many in this industry you think they only employ part-time folks right he actually has 41% of his workers working full-time but now because of the new law he's being forced to prove all of those folks nearly all of them into part-time status of 29 hours and that's just wrong that's the consequence again Mr. Chen let me just ask a question on retail sales workers though how does the 30-hour rule impact retail sales workers the research that we've 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 the retail industry is that workers in the retail industry are at significant risk and Mr. Charlie this just follows up with your area of expertise I mean 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 wall street firm big wall street firm that's really the nature of the retail industry frequently we're open seven 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's less expensive to have part-time employees then have full-time employees but from our standpoint you know this is not something that we're either for or against insurance coverage retailers were one of the first industries to come up with health insurance coverage so it's a question of 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 the effect that has on how people operate their businesses there are very very expensive ways to manage 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's a lot harder for them to manage that cost so a lot of what we what we retailers and chain restaurants worry about is the compliance cost of managing this thank you Mr. Chairman I yield back thank you Mr. Kind is recognized thank you Mr. Chairman I want to thank our witnesses for your testimony here today you know when I had supported the Affordable Care Act a few years ago I was one who did not believe it was a perfect bill it was going to be a bill that would be required constant updating and changes in reform as we learn what's working and what isn't so you know 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's a goal that's shared but the constant drumbeat of criticism about what is taking place I don't think is very helpful or constructive and trying to come up with some workable solutions recently I think there's been some misconceptions about Target's recent announcement that they released while 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're 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% of the workers that are now going into the exchange are better served in the exchange because there's more affordable coverage and so Mr. Chairman with your permission with the NAMM's consent I'd like to introduce the Target blog for the record for the sake of clarification at this time without ejection so ordered Dr. Levy let me ask you just a couple of questions with my time remaining anecdotally I've been struck by the number of people in Wisconsin that have come up to me talking about the job block issue that now for the first time they're able to branch off and start a business that they were reluctant to before for fear of them or a family member with a pre-existing condition and them losing health care coverage what are you seeing in the labor market in regards to job block 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've wanted to start a business for some time so there's 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 employers much of 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's 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've seen so far suggests that the the fact that the Affordable Care Act provides an alternative to employer-responsored coverage should increase mobility across types of employment and increase the rate at which people start businesses now I've got 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% of them were already providing health care coverage of course those small businesses up to 50 workers weren't required under the law to provide health care coverage but there were incentives to help small business owners be in a better position to extend coverage for their workers even what are you seeing with small business owners small businesses generally in the labor market their ability to start providing health care coverage for their workers so as you say the administration the Affordable Care Act has included and still includes premium tax credit to help offset the costs for small businesses that are providing health insurance it's also true that the tax code it's built into the tax code that there's assistance for employers providing insurance because health insurance isn't taxed as income to the worker so there's a significant advantage to employers who provide health insurance compared to providing that compensation in the form of wages that's one of the important that's 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 and we're hoping with the creation of small business health insurance marketplace too that there'll be a better choice for them with affordable rates that they'll be able to extend to their employees oftentimes this conversation is focused on some of the anomalies that's working its way through the system in that and you know about 30 hour week or 40 hour week and not enough focus about all right if it's not working then what's the alternative of making sure that those workers have access to affordable health care coverage we just saw one announced on the senate side but some republican senators and it's one big cost shift proposal is what they're offering in their plan and it's taking away the tax exclusion within the code making it harder than for businesses to be able to offer health care coverage and then shifting and this has been a trend I think with a lot of large businesses we're getting away from divine 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 health care coverage too is going to either continue to be shifted on their backs to higher deductibles and co-pays or they'll just go away entirely what trends are you seeing in that regard Dr. Levy well there's very little evidence that there will be sort of large scale dropping of employer sponsored coverage by large firms they've almost all always offered it even in the absence of requirement to do so the business case for doing so remains strong and in fact it's even stronger as a result of the individual mandate because now even more workers and we've heard that for Mr. Anastas 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 all right thank you Mr. Marchand is recognized thank you Mr. Chairman received a letter recently from Tom Hardiman who runs a McDonald's has a franchise in my district the Affordable Health Care Act must be repealed the financial impact of this law on my business will be devastating if not changed I don't 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 when these and Sonic is 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 its 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 in part-time employees Mr. Chen Dr. Chen not only is healthcare 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 39 hours to a 40-hour full-time position that it could add 30-35% cost to employ that person readily certainly the addition of the additional hours plus the additional benefits could could add up yes so that same 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 not in the 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 they are above some of the thresholds that are very important in the public assistance world if you take them from 29 hours 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 to their affordable health care act so they will pay much less into the self-security old age fund they will pay much less into the self-security disability fund and it will trigger all kinds of other public assistance so really does this law enable people to burst to 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 does this law really push those same people back into a dependence mode and 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 because 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 self-security threshold they can trigger the affordable health care act threshold and to me if you look at this in a long-term perspective the affordable health care act is not going to and 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's going to it's 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. Chair. All right, Mr. Reed. Thank you, Mr. Chairman. Mr. Chairman, thank you to the panel. I'm going to echo some comments from Mr. Marchen and those comments are to read to you a real letter from a real person from Western New York that's dealing with this situation. Last week I received from Victor Tirana in Jamestown, New York small town in my in my district who is the owner of a local coffee shop at Tim Horton sharing his frustrations with me as a small business owner who is trying to keep his restaurant afloat 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 restaurateur I am writing to urge you to work in a bipartisan way to address the challenges me and restaurant operators like me with the Affordable Care Act the definitions of full-time employee applicable large employer in the automatic enrollment provision. The health care 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 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's a real person. That's not some made up issue. That's not some made up fact or anecdotal case. That's a real person that is dealing with this law today. And that resonates with me. And it's 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's not something that needs to be dealt with that we're trying to blame everything under the sun on the Affordable Care Act. That's not the case. I care about these people. This isn't 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 eight dollar 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's dealing with on a day-to-day basis. That's 80 dollars less each week they are taking home and about 350 dollars 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 dollars a month because of some policy out of Washington D.C. Well, that's frustrating. So I guess I will turn to you, Mr. Trialine. You represent a lot of people in the retail industry is what Victor is explaining to me and reaching out to me for help. Is it real or is he just making this up? Unfortunately Congressman it is very, very real and the concerns I spent a lot of time trying to help my members understand what the various requirements of the Affordable Care Act when they need to start worrying about them. Now this issue of counting a variable hour employees in January I'm sure there are still companies who are not aware of that and then will be foreclosed from having as much as a one-year look back. But I want to your point their stock and trade is not healthcare. They want to run their business they want to run their restaurant and their compliance burden with this is tremendous. So figuring out if they're lucky they've got a licensed insurance agent who can kind of relieve them through this but the complexity of the different requirements are continuing to pile up and they are not happy with that compliance burden. Thank you. With that I yield back Mr. Chairman. Mr. Davis is recognized. Thank you. Thank you. Thank you very much Mr. Chairman. Dr. Levy as I've listened to the discussion this morning I'm reminded of myself that I have attended in the last two 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 a hundred thousand potential clients that they're 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? I think that's 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 I've 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 kind of figure out how do they best and they 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 I mean how would you respond to that, Nof? I think that's right and 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's why you want to have as few workers as possible at risk of having their employers cut their hours and that's one reason why it's 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 thank you very much and no further questions Chairman thank you Mr. Young thank you Mr. Chairman I ask permission firstly to submit to the record a statement by NFIB about the impact the 30 hour rules having on small business and in support of HR 25 75 to restore the traditional definition of full-time within the ACA without objection to order you know just last week I visited with the superintendent of the school in southern Indiana in my district on Salem Indiana and 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 she's concerned about the future the future of her substitute teachers and the ability to manage personnel she's concerned about the ability to schedule said teachers in the classrooms at the right time she's speculated that she may have to ask those teachers to come in late while students are in empty classrooms so that they can keep those teachers below the 30 hour threshold and very recently one of her best employees actually left citing this specific provision of the Affordable Care Act 39 Indiana school corporations have sued the federal government in reference to this 30 hour provision because the undue financial and administrative burdens it puts on them I've talked to representatives from Indiana University who said they'll cut the hours of a thousand employees over the coming year to comply with this act in this provision and of course we've heard the compelling testimony today from the largest community college system in the country a community college system known as Ivy Tech out of Indiana Mr. Schneider says President of Ivy Tech we've already heard from you today the impact of this 30 hour provision seems clear at least from your perspective that this impact has not been exaggerated it's not speculative it's very real and it's impacting your operations here and now has the delay of the employer mandate for one year to any significant degree made it easier to deal with this 30 hour provision well there's a proposal the part of the law is the look back provision so you actually have to keep the data now and we started keeping it at October 1st so the administrative burden on this is taking place as we speak what about the changes that were discussed here today there were some discussed to solve or at least solve any problems that are related to the 30 hour provision do you think that those those proposals that were put forward have you heard anything here today that would that would entirely solve the challenges you're dealing with no I think your proposal is probably directionally the way we have to go the current law is both prescriptive very prescriptive and vague at the same time so that people in our situation don't really have a compliance full compliance understanding and then I think the other thing which was brought up by your colleagues that the 40 hour benefit of healthcare is something that has throughout the land and I think that employers and having spent decades in the auto industry where competitive pressures are enormous employers are going to great lengths to preserve 40 hour healthcare for everybody and try to minimize the reduction in the benefit and I think this actually is counterintuitive and that is making the 30 hour week the threshold is going to force everybody in that same bucket and the additional cost for us which is 12 million on a 25 million dollar current spend are unachievable. Thank you. Mr. Troutwine you're here obviously representing the retail industry today maybe you could speak to the retail industry and whether the employer mandate is helped in a measurable significant way addressing with the challenges created by this 30 hour provision. I think it is a huge huge challenge congressman and we congratulate you on on your legislation we support it with the additional the the tight margins that I mentioned earlier in the retail industry it's very hard for us to take on additional labor cost and this question of managing people to a new threshold is something that is is very uncomfortable for our stores and restaurants. So from our standpoint it's a big problem. Thank you. I you know I hope we can move forward we can address this in a bipartisan way I'm proud of the bill that you referenced that I've introduced with Representative Kelly Representative Olson and Representative Wahlberg gets bipartisan support moving forward and we need to restore this traditional definition of full-time under the Affordable Care Act and I yield back. All right Mr. Griffin Thank you Mr. Chairman I'm going to start out by asking you Dr. Chen where did the 30 hour number come from? Congressman I believe there are different explanations some are that it was a product of legislative compromise some might say it was pulled out of a hat but it certainly doesn't seem to make much sense to me from where I sit sir. Yeah well in Arkansas we try to apply a little common sense and I don't know anywhere where 30 hours is full time if you just want to have some kind of requirement that's one thing but to call 30 hours full time I mean France it's not even full time and France is 35 hours and it's moving toward a 40 so that's 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 so in Arkansas Arkansas State University the alma mater of our Democrat governor they had to cut folks back to a maximum of 28 hours per week now I assume that those are people that the law or people that that wrote this law wanted to make sure had insurance so we want to give them insurance that's the goal what did they get no insurance and less pay genius that's a genius federal program right there and let me read you another one 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 so 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 numerous stories from back home Pulaski Technical College and the list goes on and on and on I don't 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 haven't been to Hawaii but I've seen pictures I don't think wise economy looks anything like Arkansas I'd probably dig a little deeper on that and you know when I look at who this hurts they're the people that folks up here in Washington talk about wanting to help the vulnerable I made a list of the people that you talked about and you're a sharp guy Stanford and all that and I look at all these stats here numbers I believe what you're telling me you talked about lower income folks vulnerable folks seniors jobs generally hurts jobs talked about school districts talked about colleges small businesses if I was to adopt the democrat language I would probably say that the 30 hour rule is a weapon in 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 doesn't it well that's the type of language that's used here and let me tell you the people that say they want to help those folks they're hurting them I have pages and pages and pages of letters people talking about the impact of this I don't buy your numbers Dr. Levy I'd like to take a closer look maybe we can sit down but but I hear so many voices from back home and it's no consolation to them that the jobs that they're losing in the private sector are being replaced by the county whatever expanding government jobs which aren't sustainable or with barred money anyway I mean this is ridiculous that's why I'm proud to support my colleague here his bill and I think ultimately we'll get there I mean the president has basically recognized a lot of these problems the number one person in terms of repealing Obamacare has been President Obama he does it unilaterally all the time he didn't like it like it when we do it maybe we can convince him to take a look at this thank y'all all right Mr. Mr. Pascrell is recognized for five minutes well Mr. Chairman after last dissertation I would hope there'd be growing support now to vote the unemployment insurance back for those 1,400,000 people who lost their long-term on insurance since you want to help those very people that you're talking about yeah don't hold your breath before I begin Mr. Chairman I'd like to address one issue raised earlier in this hearing by me 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 volunteer emergency personnel the Obama administration has since indicated that 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 without objections or 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 is that in addition to providing 32 million Americans with health insurance many for the first time and giving parents peace of mind knowing that they can take their sick child to the doctor without being suffocated by medical bills they can't afford the ACA is an investment in our citizens and in our economy Dr. Levy the expansion of Medicaid this is 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 expansion is an important component of the federal care federal care act the Affordable Care Act and I think it'll help millions of Americans gain coverage that's 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 my home state of New Jersey the expansion of the Medicaid program will ensure nearly 400,000 residents 400,000 that will result in more than one billion dollars in new federal funding and support 14,500 jobs by 2016 unfortunately not expanding the Medicare programs is just one way some of the governors are priding themselves on being impediments God knows we've seen enough here of the ACA success 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 seven million dollars in federal funding to help educate our residents about the ACA if he doesn't spend it we should get it back I'm fighting for this in every state and let private organizations educate the public Dr. Livy can you discuss some potential positive economic effort effects just on that portion of the ACA Medicaid expansion absolutely I think that's a very important piece of this story I am also fortunate enough to live in a state where we have an enlightened Republican leadership that has taken up the Medicaid expansion and in Michigan we expect this to provide coverage to 400,000 new Medicaid enrollees 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's 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 so by reducing what the state has to pay the state currently pays a lot for mental health and community healthcare for people who will become folded into Medicaid and as a result it lifts some of the pressing burden on the state we can then spend more money on education or highways or any many other things that in Michigan we'd like to spend money on all right Mr. Renacey just a few seconds and Levy what was the situation with mental patients before when they were not covered by Medicaid well the state spends a considerable amount of money on community mental health spending so mental healthcare that's provided through public clinics those patients would now have access through Medicaid to other providers and the state's commitments through the community mental health system are reduced all right Mr. thank you Mr. Renacey's recognized thank you Mr. Chairman I want to thank the witnesses today also you know 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 that many times legislation comes out of Washington by people who have never have to live with it but as a small business owner for almost three decades I had to and I understand the struggles of small business owners are going through on a day-to-day basis especially with the ACA and with the our requirements and I also realize that every day they have to make decisions on whether they lay people off whether they can are going to add people what are they going to do next and I also coming from Ohio Cleveland opportunity to go back on a weekly basis so I'm talking to these people and it is shocking when I hear many of my colleagues on the other side say this isn't affecting some of these people so let me just give you some examples in my district and in my in the Cleveland Canton Akron area of what's going on with the hours and the Affordable Care Act the Cleveland Clinic which was ranked among the top four hospitals has announced layoffs of employees as a direct result of the Affordable Care Act Summa Health Systems laid off 58 workers in September and another 25 in December Akron General Health Systems Summit County second largest employer laid off 132 workers in February and another 30 in September the city of Akron the city of Medina the city of Feralon the city of Talmage the city of Westlake are limiting part-timers to fewer than 30 hours per week Kager County Community College capped hours for 1,559 part-timers at 20 hours per week Kent State University limited course load of adjunct faculty Medina City Schools cut weekly hours for cafeteria workers and teachers' aides from 30 to 28 hours per week Stark State College capped 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% increase in its projected premiums after the employer mandate was delayed if their 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 and is concerned over losing her employer-sponsored health coverage after previously being laid off from a full-time job she accepted a part-time job at JC Pennies 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 he 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 you know but most recently and this is what's when I say go back and I hear a woman working at the counter at a local restaurant in my hometown said to me congressman I've been here for 22 years I've 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've been told that all of our staffing will be reduced to approximately 28 hours per week that's a approximately a 15 to 17 percent pay cut plus she's going to lose her health insurance so now she said to me I have to go on the Affordable Care Act she looked at me she said I'm scared she says can you help me can you overturn this law these are the kind of things that you hear when you go back to the district but when I'm in Washington and I hear some of my colleagues I never hear that but this is what you actually hear when you're dealing with these people and you're in your back they're listening to them it's amazing you know I worked in the healthcare industry most of my career I had nursing homes I saw your statistics that how they're going to be affected I think of those over a thousand employees that I employed and look at those nursing assistants many of them single moms 35 hours per week that earn approximately $411 if the nursing assistant hours are cut back to 29 hours he or she would lose $71 per week or equivalent of 17 percent pay cut that's unheard of when we're thinking of these single mothers and fathers that are trying to provide for their family 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 in this hour situation brings certainty and predictability to the small business owner absolutely not congressman no not at all no sir no sir but your large business owners for small business owners now their workers can get health insurance from another source if they have to can I just senator can I just say one thing I mean yes senator I'm sorry representative that's it we're large business owners I mean that is there's large business owners like general corporations wall street and such and then there's small business owners like us and that's a big difference and I might I just add the hardest thing to understand here is this this idea that the change in the rule to 40 hours is going to cause more certainly there are more people closer to 40 hours but as somebody who's worked many years on the floor by the hour I would much rather lose one hour of pay go from 40 to 39 than 40 to 29 thank you Mr. Kelly thank you chairman and again panel thank you for being here I know that sometimes we talk about well these are just anecdotal but I also like Mr. Renacey Mr. Young Mr. Griffin people back home Barbara Wilson works for the Ark of Mercer County Pennsylvania this is a phenomenal organization to assist people with developmental disabilities Barbara is a part-time employee who used to work 30 to 35 hours a week now she was recently informed in her coworkers that all part-time employees will be having their hours cut to around 20 hours a week because of the Affordable Care Act the Barb tells me that she was shocked and she heard this news because of her hours being cut she says she will no longer be able to afford the cost of living now let me tell you there's also a lot of private companies I've talked to I think the chilling effect of this current run is that these people say you can use our story but you can't use my name because I'm afraid of some type of a of a retribution and so Mr. Anastas thanks for being here I know it's tough but I and I have people back home to tell me look at how about a guy 92 of his 93 employees work more than 30 hours a week now all 92 of those employees 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 now it's not only affecting the private sector also the public sector in our school district where I come from Butler area school districts they had to implement procedures to keep all of its part-time employees working less than 30 hours in the entire Lawrence 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's absolutely ridiculous for anybody to say there is no impact I am a small time small-time businessman we spend about $400,000 a year on health care now Mr. Anastas if you could just relate because I don't think people get the picture of 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 out in the market in competing against every single person that does what you do so when you talk about it also talk about social security contributions about and your wage taxes and about Medicaid contributions it's a lot more than people think I know in our place somebody comes to me and says we need to hire this person and I say fine do you know what it's going to cost this and they say this is what we'll be paying them per hour I said that's not my total cost you can add about 40% to that with wage taxes in benefits so would you just talk a little bit about that because you do it every day you have to cut checks that you signed the front of not the back of thank you representative it does add about 40% it adds quite a bit I'd have to look at it to see exactly what it costs and it's different levels for different amounts but of course the thing about health insurance is that if you have people that are you're paying $12 an hour it's a much bigger percentage that it adds to it all the time and like I said we're small businesses in America I mean we may be large and considered over 50 but at the same time I mean to expect us to do two and a half times our health care costs and then expect and say that you know that we're large businesses and therefore don't we want to cover everybody well of course you do but at the same time you can't you can't use the survivability of businesses first and foremost yeah and and Dr. Chen this idea the 40 hours of the 30 hour I have no idea where this came from I also wonder how it will impact impact over time pay what are we going to use now as as a definition for when we go to overtime 40s to 30 we have no idea how this came about I mean why did it come about how do we change from 40 to 30 anybody know well it certainly doesn't match precedent that we have in the Fair Labor Standards Act which sets 40 hours as a threshold for the payment of non-exempt employees to have them receive overtime pay so this is inconsistent with that and one of the reasons why it raises employer costs okay well then here's my question because I know we're watching now since we've cut the work week from 40 hours a week to 30 hours a week that's about a 25 percent reduction in the number of hours so using the president's terminology look it's just arithmetic so if I cut your hours by 25 percent then I'm going to have to raise your wage by 25 percent and I see this pivot to the minimum wage now which kind of it's kind of funny how it kind of matches the 25 percent less hours match by 25 percent increase in the minimum wage that the government wants to establish I think that's the Judas Goat that's making people to think that okay we're going to raise your wage I don't believe that that's the right approach to this and so Chairman I thank you so much for holding this to me this is not a republican issue or democratic this is an American worker issue listen when when Mr. Hoffa jumps on this and says you're destroying the backbone of the American middle class then there's a concern this effect there's a very chilling effect that I really am concerned about the gap now that's widening between what the people to have faith and trust in and what we're coming out with policy why Mr. Anastos thanks for being here Mr. Snyder thank you Mr. Troutwine Mr. Dr. Levy Dr. Chen thanks for being here but I have a greater concern today really better be how we're destroying the American people's confidence in the government that continues to come out with policies that destroy our middle class and then somehow come out with another narrative and say no no that's not the problem the problem is we're just not paying enough at the minimum level it should never be a minimum wage that we we try to get to it should be a market wage where we allow all workers with their skills and their ability to make as much as they can so thank you all for being here Mr. Chairman thank you and I yield back thank you Ms. Jenkins has recognized thank you Mr. Chairman and I too thank the panel you've 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 and she informed us that everything was proceeding according to schedule then 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 the healthcare coverage and full-time status of their employees and these decisions will ultimately hurt employees not employers I have a letter here from a Kansan John Rolf who operates 64 restaurants across the Midwest and several in my congressional district and I'd request Mr. Chairman that this letter be entered into the record without objection so ordered Mr. Rolf here who's a restaurant employee hundreds of people he's made a good faith effort in the path 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 the 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 than 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. Rolf worries that 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 their options are either to 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. Rolf worries that many of these employees will actually request to work fewer than 30 hours a week so that they will not be offered health insurance by the company and can obtain subsidies over the exchange and 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. Rolf and others of my constituency as somebody in the hospitality industry do you have comments regarding how true this letter is Yes, congresswoman that letter is right on the money I think congressman Reed had similar comments that I thought were right on the money and you know a couple of things about it to me it's almost hurts the I have to look at it from the employer's side but like I said I mean I've worked on factory floors and that sort of thing for many years and I actually think I truly think it hurts the worker more than it hurts us because they're the ones who are going to with a they're going to be having their hours knocked down by a significant amount and secondly that whole idea about the relationship between us small employers or even large employers and our employees it just creates this wedge and division that it's just totally unnecessary and it's I just certainly re-emphasize everything that that gentleman said Mr. Chen would you care to comment on if you agree that this provision will disproportionately hurt the employee there's no question that the biggest loser from this is the employee particularly the vulnerable population we've talked about today that we look at in our research and others have looked at as well you're talking about millions of Americans who will be adversely impacted because the incentives created by the law frankly are perverse thank you I yield back Mr. Chairman all right thank you very much and I want to thank our witnesses for their testimony today and 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 and if any members submit questions after this hearing I would ask the witnesses witnesses to respond in a timely manner thank you very much and with that this hearing is adjourned