Save American Workers Act Would Increase Individual Sales

Shortly after being sworn into office, the new Congress was hard at work on a bill that would change the definition of “full-time employee” from 30 hours to 40 hours per week. Supporters of the bill argue that it will help reduce the number of employees being shifted to part-time so that the company doesn’t have to offer them health insurance, while opponents, including President Obama, who has threatened to veto it, say that the bill will increase the very problem it is attempting to correct.

The opponents may just be right on this one. It’s certainly easier for an employer to cut an employee back from 40 to 39 hours per week than it is to cut the employees hours to 29 per week. Nonetheless, the bill is almost certain to pass the House and, if it can overcome a threatened filibuster, the Senate as well. The President will likely veto the bill, and it’s unclear what would happen after that.

If the bill does pass, what we can expect is a massive shift to part-time among large employers. A lot of employees will start working 38 hours per week and will therefore be eligible for government subsidies. This further highlights the fact that brokers need to understand the provisions affecting both groups and individuals and need to have a private exchange solution that will allow them to enroll a lot of employees and their family members in individual market plans very quickly. If it passes, the Save American Workers Act could hurt bigger agencies that focus exclusively on group health insurance while helping brokers who sell both group and individual. Brokers who sell both will be in a good position to help employers regardless of what they decide to do.

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