BILL ANALYSIS �
ACR 95
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ASSEMBLY THIRD READING
ACR 95 (Gomez)
As Amended April 28, 2014
Majority vote
HIGHER EDUCATION 9-3
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|Ayes:|Williams, Bloom, Fong, | | |
| |Fox, | | |
| |Jones-Sawyer, Levine, | | |
| |Medina, Quirk-Silva, | | |
| |Weber | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Ch�vez, Olsen, Wilk | | |
| | | | |
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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 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) ACR 138 (Nava), 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,
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d) Individual college and university employers across the
United States (U.S.) 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
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 United States Code Section 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 the Internal Revenue Code (IRC)
Section 4980H.
Shared Responsibility for Employers Regarding Health Care
Coverage. Beginning in 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 the IRC
Section 4980H (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
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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
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
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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 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."
Arguments in opposition. None on file.
Related legislation. 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.
Analysis Prepared by : Jeanice Warden / HIGHER ED. / (916)
319-3960
FN: 0003326