Employment prospects dim over Obamacare
HealthCare.gov may be functioning better, but consumer and corporate acceptance of Obamacare may continue to bedevil the law, according to two recent surveys.
The Duke University/CFO Magazine Global Business Outlook survey, a quarterly poll of corporate finance chiefs, found that a significant percentage of companies will hold back on hiring full-time workers because of the impact of the Affordable Care Act.
Nearly half of U.S. companies said they are reluctant to hire full-time employees because of the law. One in five respondents said they are likely to hire fewer employees, another one in 10 may lay off current employees and 44 percent of companies said they will consider reducing health benefits to current employees in response to the health care law.
"I doubt the advocates of this legislation would have foretold the negative impact on employment," said Campbell R. Harvey, a professor of finance at Duke's Fuqua School of Business. "The impact on the real economy is massive. Nearly one-third of firms may either terminate employees or hire fewer people in the future as a direct result of ACA."
However, the overall economic prognosis from the Duke survey is relatively optimistic. Full-time employment is expected to grow 1.4 percent in the U.S., though that's down from 1.8 percent expected growth in last quarter's survey. Capital spending should increase by a robust 7.3 percent, up from the 4.8 percent projected growth last quarter. U.S. companies believe 2014 will be another strong year for profits, with anticipated earnings increases of more than 10 percent. The Duke/CFO Magazine survey, which is in its 18th year, polls more than 1,000 global corporate finance chiefs from around the globe.
Meanwhile, a survey by InsuranceQuotes.com found that four in 10 Americans would pay a fine rather than buy health insurance. However few understood the amount of the fine they might be subjected to if they violated the health law's mandate to buy a policy.
"One of the key questions surrounding the Affordable Care Act is whether or not young Americans -- especially healthy young Americans -- will sign up for health insurance," said Laura Adams, InsuranceQuotes.com's senior analyst.
Some 65 percent of respondents between the ages of 18 and 29 said they would buy health insurance, compared to just 57 percent of those age 30 and older.
When asked what the potential penalty might be if they didn't buy health insurance, the vast majority of respondents in every age and demographic category professed ignorance. Only two in ten guessed the cost range correctly, the rest either vastly over- or under-estimated the fines.
The fines for failing to buy health insurance in 2014 are the greater of $95 per person or 1 percent of household income above minimum thresholds ($10,000 for singles; $20,000 for married couples). The penalties will rise significantly in future years, however.
