Article Saf Lobbyist Discusses Legislative Victory

Katie Hendrick

Contributing Author
Jan 19, 2014
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Last Thursday, April 3, Congress passed H.R. 2575, commonly known as the “Save American Workers Act,” which raised the definition of full-time employment from 30 hours a week to 40 hours a week. This is very promising news for small business owners, especially florists, who have worried about how the Affordable Care Act will affect their employees’ schedules and their flexibility in hiring seasonal workers.

We caught up with Corey Connors, senior director of government relations for the Society of American Florists, who’s immersed himself in the Affordable Care Act to help floral industry professionals better understand it and stay in compliance. He shared a little about what’s going on and what it means for the industry.

KH: What is the "Save American Workers Act"?

CC: H.R. 2575, the "Save American Workers Act," was introduced by Rep. Todd Young (R-IN-8) in June 2013 after Rep. Young heard concerns from the employer community about the definition of full-time employment under the Affordable Care Act (ACA). The ACA's definition of full-time: "with respect to any month, an employee who is employed on average at least 30 hours per week." This definition of full-time employment represents the first time in American history that a set number of hours was established concerning full-time employment.

Before the ACA, employers were permitted to determine what constituted full-time employment within their own business and offer wages/benefits accordingly. Typically, across many industries, the basic 40-hour standard was indirectly established, due to overtime regulations in wage law.

In many regards, the basic framework of the ACA's employer provisions were designed with large corporations and standard Monday-Friday, 9-to-5 jobs in mind. Unfortunately for our industry, and many like it, our employees do not work standard Monday-Friday, 9-to-5 jobs. There's considerable variability in hours worked, seasonal employment, with peaks and valleys throughout the year, nights and weekend event work, etc.

KH: Why does it matter for florists?

CC: It matters for florists in several regards. To be plain, 30 hours is simply not a standard of full-time employment that is utilized across the industry segments that SAF represents. Some choose 32 hours, some choose 35, some choose 37.5, some choose 40.

Prior to the ACA, companies would offer wages and benefits designed to attract/retain employees. Now, large employers with 50 or more full-time equivalent employees (note: equivalents, not only full-time workers) are required to offer health benefits coverage to their full-time employees (working more than 30 hours/week in a particular month) that meet ACA standards or face a potential tax penalty. Those plans are benefit rich, which, on its face, would be a good thing for an industry that has had issues securing affordable benefits for its employee population. But there's a cost associated with those benefits, and that's where the 30-hour definition kicks in.

Mid-size floral industry employers (wholesalers, large retail florists) are not necessarily equipped to assume additional overhead that would be mandatory by providing coverage to employees that they had previously considered part-time. Their ACA compliance options are few: they can offer benefits and increase overhead costs to anyone working more than 30 hours a week, which has a trickle down effect on the price of products and services provided at wholesale/retail. Or, they can reduce the hours of employees below the 30-hour standard to not trigger the employer mandate penalties with certainty. But that might have the effect of diminishing product or services for businesses with razor thin profit margins competing in a challenging marketplace.

It's important to note that SAF did not and continues not to advocate against the ACA. Back when the original law was debated, the then SAF Government Relations committee made the conscious choice not to oppose the law in the hopes that it might reign in rapidly escalating premium costs, while providing smaller employers with avenues to offer coverage that they had been unable to do before. As the law was enacted and industry businesses began developing and implementing compliance strategies, the 30-hour rule became a major sticking point as it was not in line with traditional standards of employment across the industry. By in large, the florists and industry businesses I've spoken with want to offer coverage to their full-time employees and want to comply with the ACA without penalty. But the 30- hour standard was detrimental to both businesses that can't absorb the costs and employees that are seeing their hours reduced. In the end, SAF's volunteer leadership authorized the GR department to engage on the issue.

KH: What did SAF and its members do to lobby for the Save the American Workers Act?

CC: SAF members have done a tremendous job in supporting this legislation. Attendees at our 34th Congressional Action Days back in March took to Capitol Hill in support of H.R. 2575, urging their members of Congress to support it. SAF members also engaged in a significant grassroots campaign, one of the largest since I've been here, sending emails and making phone calls to their member of Congress in advance of the vote. In fact, one of our members had their letter to their Representative read on the floor of the House just moments before the vote. It has been an absolute textbook demonstration on why industry engagement on public policy matters and demonstrates the strength of our membership in the advocacy realm.

For its part, SAF continues to participate in coalitions of business trade groups in Washington that are continuing to fight for employer-sponsored coverage. Prior to the ACA, employer-sponsored health benefits were the largest source of health benefits coverage in the country. And while new doors have opened for the poor, the uninsured and those with chronic conditions that could previously not obtain coverage, it is imperative that employers continue to have choices and affordable options for attracting and retaining the best talent that they can by offering attractive wages and benefits. So SAF and its coalition partners continue to work with Congress and the Administration to ensure that employer-sponsored coverage remains viable and affordable, even with these highly regarded changes in the individual marketplace.

KH: What do you think will happen next?

CC: That's a great question. Obviously the House passed H.R. 2575 with some bipartisan support, but in the face of a veto threat by President Obama. It would appear that Senate Majority Leader Harry Reid (D-NV) is not inclined to bring up the 40-hour bill, as he is a close ally of the President and opposed to raising the number that significantly. However, and at the behest of moderate Democrats, Majority Leader Reid has left the door open a crack for targeted "fixes" to the law, including some potential movement of the full-time number up from 30.

What happens next is a very careful reading of the political tealeaves to determine how the ACA might impact the upcoming mid-term elections, where Democrats are fighting to retain control of the upper chamber. The enrollment numbers on the Exchange before the March deadline surpassed the modified target, which provided a slight bump in the law's popularity. But as the data subsets roll out (who's actually paying for coverage, what's the mix of people that have enrolled and how will that affect premium costs in 2015, how many were previously uninsured, etc.), it will be interesting to see if there will be any Senate action on targeted fixes moving forward. More interesting will be whether or not the President will get on board with significant changes to anything.

So in short: time will tell.