H.R. 2575

Save American Workers (SAW) Act

Sponsor
Rep. Todd Young

Committee

Date
April 2, 2014 (113th Congress, 2nd Session)

Staff Contact
Kimberly Betz

Floor Situation

On Wednesday, April 2, 2014, the House will begin consideration of H.R. 2575, the Save American Workers (SAW) Act, under a closed rule.  H.R. 2575 was introduced on June 28, 2013 by Representative Todd Young (R-IN) and has 210 cosponsors.  H.R. 2575 was marked up by the Committee on Ways and Means on February 4, 2014 and favorably reported by a vote of 23-14.[1]

Bill Summary

H.R. 2575 repeals the 30-hour definition of full time employee in the Affordable Care Act for purposes of the employer mandate and replaces it with a 40-hour definition for full time employee.  “Under the proposal, full time employee means, with respect to any month, an employee who is employed on average at least 40 hours of service per week. In addition, the number of full-time equivalent employees for a month is determined by dividing the aggregate number of hours of service of employees who are not full-time employees for the month by 174 (rather than 120 as under present law).”[1]



[1] See id. 

Background

Obamacare subjects large employers, defined as those who employ more than 50 full-time equivalents, to a tax penalty if they do not offer affordable health care coverage or one or more of its full-time employee(s) is certified as receiving a premium subsidy for health care[1].  A full time employee is defined under Obamacare as an employee who works an average of at least 30 hours per week.  For those employers that do not offer health care coverage and at least one employee receives a premium subsidy, the tax penalty is $2,000 multiplied by the total number of full time employees employed minus 30.  With respect to those employers who offer minimum essential benefit health care coverage to employees and at least one employee receives a premium subsidy because the employer’s offer is not “affordable” to the employee, that employer may be subject to a tax penalty of $3,000 multiplied by the number of employees who receive premium subsidies capped at the total amount had the employer not offered health insurance coverage at all.[2]

On December 28, 2014, the Administration issued proposed regulations on the employer shared responsibility requirement, which were finalized on February 10, 2014.  The regulation delayed yet again the employer-reporting requirement for those employers with 50-99 employees until 2016.  The delay was the second within eight months.[3]  On July 2, 2013, the Department of Treasury announced that it was delaying the reporting requirements for 2014.  On its website, Assistant Secretary for Tax Policy, Mark Mazur, blogged that the Administration was providing an additional year for the mandatory and insurer reporting requirements to allow the government time to assess ways to simplify the reporting process and to allow businesses additional time to adjust health coverage.[4]

Cost

According to CBO and Joint Committee on Tax, passage of H.R. 2575 would result in penalty payments that are “$63.4 billion lower over the next 10 years” and “an estimated $9.3 billion increase in off budget (Social Security) revenues.”[1]

Additional Information

For questions or further information contact the GOP Conference at 5-5107.