BILL ANALYSIS �
ACR 95
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Date of Hearing: May 6, 2014
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Das Williams, Chair
ACR 95 (Gomez) - As Amended: April 28, 2014
SUBJECT : California Community Colleges: part-time faculty and
classified employees.
SUMMARY : States legislative intent that community college
districts (CCD) not reduce the hours of part-time faculty or
part-time classified employees for the purpose of avoiding
implementation of the federal Patient Protection and Affordable
Care Act (PPACA). Specifically, this resolution :
1)Makes the following declarations and findings:
a) The provisions of the federal Patient Protection and
Affordable Care Act (PPACA) relating to employer shared
responsibility require large employers, including
California community college districts, to provide minimum
essential health care coverage for anyone working an
average of at least 30 hours per week;
b) Assembly Concurrent Resolution (ACR) 138 (Chapter 142,
Statutes of 2010), expressed the intent of the Legislature
that part-time and temporary faculty receive pay and
benefits that are equal to those of specified tenured and
tenure-track faculty, to the extent funding is provided;
c) The Internal Revenue Service's (IRS) final ruling in the
Shared Responsibility for Employers Regarding Health Care
Coverage defines service hours to include work paid outside
of the classroom, including office hours and preparation,
for purposes of calculating full-time employment status;
and,
d) Individual college and university employers across the
United States have reduced the hours of part-time faculty
and part-time employees specifically to avoid compliance
with the provisions of the PPACA relating to employer
shared responsibility, the operation of which has been
delayed until January 1, 2015.
2)Resolves that it is the intent of the Legislature that CCDs
ACR 95
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not reduce the hours of part-time faculty or part-time
classified employees for the purpose of avoiding
implementation of the federal PPACA.
EXISTING LAW requires, among many, that businesses with at least
50 full-time and/or full-time equivalent employees to provide
affordable health care coverage that meets a minimum level of
coverage to their employees, or otherwise pay a penalty.
Defines full-time employees as an employee who works an average
of 30 hours per week (42 U.S.C. 300gg-11).
FISCAL EFFECT : Unknown. This resolution is keyed non-fiscal
by the Legislative Counsel.
COMMENTS : Background . The IRS, in its interpretation of
PPACA, as signed into law by President Obama on March 23, 2010,
issued final regulations on February 10, 2014, on the Employer
Shared Responsibility provisions under Section 4980H of the
Internal Revenue Code.
Shared Responsibility for Employers Regarding Health Care
Coverage . Beginning in the year 2015 and after, employers
employing at least a certain number of employees (generally 50
full-time employees or a combination of full-time and part-time
employees that is equivalent to 50 full-time employees) will be
subject to the Employer Shared Responsibility provisions under
section 4980H of the Internal Revenue Code (added to the Code by
the Affordable Care Act). As defined by the statute, a
full-time employee is an individual employed on average at least
30 hours of service per week. An employer that meets the 50
full-time employee threshold is referred to as an applicable
large employer.
Under the Employer Shared Responsibility provisions, if these
employers do not offer affordable health coverage that provides
a minimum level of coverage to their full-time employees (and
their dependents), the employer may be subject to an Employer
Shared Responsibility payment if at least one of its full-time
employees receives a premium tax credit for purchasing
individual coverage on one of the new Affordable Insurance
Exchanges, also called a Health Insurance Marketplace.
To note, the IRS regulations define service hours to include
work paid outside of the classroom, including office hours and
ACR 95
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preparation, for purposes of calculating full-time status.
Purpose of the resolution . According to the author, in February
2014, the U.S. Department of the Treasury issued final
regulations and rules regarding the determination of full-time
status for the purpose of the employer penalty for failing to
provide full-time employees with health coverage. The author
states, "The final regulations mention the situation of adjunct
faculty, but do not resolve the question of how their full-time
status should be determined. Until further guidance is issued,
by the U.S. Department of Treasury or the IRS, employers are
required to use a "reasonable method" for crediting hours of
service for adjuncts."
The author contends, "This new ruling has caused some districts
to open up the discussion to move employees from employer based
health care, or to simply reduce the number of hours faculty and
classified employees teach in order to avoid having to provide
them with health care." The author argues, "Part-time faculty
and classified employees who are represented by a union have
significantly more protection through local collective
bargaining agreements, but districts may still avoid providing
benefits through the hiring of additional part-time faculty and
instructional aids as new courses become available, rather than
offering them to current employees so they can be eligible for
the maximum amount of benefits and any coverage that would
include them in PPACA requirements."
This resolution expresses that the Legislature does not support
any practice by a CCD that would reduce the employment and
benefits of part-time faculty and classified employees in an
attempt to avoid compliance with PPACA.
Composition of community college faculty . According to the
Faculty Association of California Community Colleges Education
Institute's "Faculty Profiles 2012 Community Colleges," as of
fall 2012, the California Community Colleges had a faculty
headcount of 55,383. To note, 38,135 were part-time faculty.
Arguments in support . The California Labor Federation argues
that, "The PPACA penalty does not apply to part-timers who work
less than an average of 30 hours per week. This loophole in the
PPACA creates a perverse incentive for employers to reduce
workers' hours below 30 per week and eliminate benefits, thus
not paying for health care and shifting the cost onto
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taxpayers?.Faculty, whether part-time or not, teach the state's
future leaders and workforce; they deserve the dignity of
sufficient hours and employer-sponsored coverage."
Related legislation . AB 2705 (Williams, 2014), which will be
heard in this committee today, changes the name "part-time"
faculty to "contingent" faculty.
ACR 138 (Nava, Resolution Chapter 142, Statutes of 2010), which
expressed the intent of the Legislature that part-time and
temporary faculty receive pay and benefits that are equal to
those of specified tenured and tenure-track faculty, to the
extent funding is provided.
REGISTERED SUPPORT / OPPOSITION :
Support
California Labor Federation, AFL-CIO
California Teachers Association
Faculty Association of California Community Colleges (sponsor)
Opposition
None on file.
Analysis Prepared by : Jeanice Warden / HIGHER ED. / (916)
319-3960