Business Briefs

Duke survey: Health care law to crimp US hiring

Posted December 11, 2013

— Corporate financial chiefs say they expect to reduce hiring and also move more jobs to part-time status as a result of the Affordable Care Act, according to a new survey from Duke University and CFO Magazine.

Many companies also are considering a reduction in health care benefits for employees.

"The results were startling to us. This will significantly impact employment," said Campbell Harvey, a professor of finance at Duke's Fuqua School of Business. "I think the people who drafted the bill probably never anticipated such a negative effect on employment, especially in a time when we really need employment growth."

Almost half of the 500 companies surveyed are "reluctant" to hire full-time employees, the survey found, and one in 10 may lay off current employees in response to the law.

Some people could see their hours cut below 30 hours a week because the Affordable Care Act requires companies with 50 or more employees to provide health insurance to those working 30 hours or more a week or pay a penalty.

More than 40 percent of CFOs surveyed say their companies will consider switching some full-time jobs to part-time jobs in 2014.

"For the employee, often what that means is you have to get a second job, or you just take a hit in the amount of money you make. So, it is quite disruptive," Harvey said.

Fallout also will hit benefits at many companies, with 44 percent of the CFOs surveyed saying they will consider reducing benefits.

Harvey said it boils down to companies trying to cut costs related to the health care law.

"For any policy, there are benefits and there are costs, and this is a cost that we simply need to be aware of," he said.

While the Obama administration struggles to get the HealthCare.gov website running effectively after a botched start, employers are already reacting to how changes in the law are affecting their bottom line.

U.S. unemployment just last month fell to 7 percent – the lowest in five years – but Duke and CFO magazine project only a 1.4 percent increase in hiring in 2014, which they said is unlikely to make a dent in the jobless rate.

“The inadequacies of the ACA website have grabbed a lot of attention, even though many of those issues have been or can be fixed,” said John Graham, a finance professor at Duke who also is the director of the survey. “Our survey points to a more detrimental and potentially long-lasting problem. An unintended consequence of the Affordable Care Act will be a reduction in full-time employment growth in the United States."

Corporate enthusiasm other than health care

Despite concerns about the health care law, 52 percent of U.S. CFOs do enter 2014 expecting the economy to improve. However, that is down from more than 60 percent in the previous quarterly survey.

The biggest concerns among global CFOs include:

  • Maintaining profit margins
  • Finding, hiring and retaining qualified employees
  • Worries about employee morale and productivity.
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  • siliencedogood Dec 12, 4:39 p.m.

    A look at the cost structure of the ACA, for those who are interested. Any feedback would be greatly appreciated. Good luck.

    https://www.youtube.com/watch?v=j7Y-5rjsaJY&list=TLwn2NMJ8hLdAigXPQ0Tv7DmB5gWbqDWLC

  • busyb97 Dec 12, 2:53 p.m.

    Shocker....who would have thought?? Duh, anyone wth common sense could see this coming.

  • stonky Dec 12, 12:35 p.m.

    Stupidest Survey ever!! Most common NON-Liberals have already figured this out! Duh....Tell us something we dont already know.

  • scvmcdoc Dec 12, 12:01 p.m.

    We really need junk to come on and update us for the day.....

  • BGJ Dec 12, 11:48 a.m.

    "Yet you constantly refer to the 125K BCBS individual policies like they are the only policies in NC."

    Not the only but the majority (375/435 = 86%)

  • BGJ Dec 12, 11:47 a.m.

    435K Individual policies - total for the state, of which about 375K are BCBS individual policies.

    Of those 375 BCBS individual policy holder, 1/3 (125K) will see rate increases that are more significant than what they've seen in prior years (which happends to also be quite significant, ranging from 6 to 18%).

  • scvmcdoc Dec 12, 11:37 a.m.

    Seems WRAL has completely removed this story from it's current pages, I could only find it by using the search option. Once again they are showing who they work for!

  • PanthersFan45 Dec 12, 10:58 a.m.

    "But the less than 2% number is DIRECTLY FROM BCBS themselves.

    125,000 total in a state of 10 million will see significant net increases in healthcare premiums this coming year."-JUNKMAIL

    AGAIN, for the UMPTEENTH time, the 125K figure from BCBS NC was the number of their (and ONLY their) individual subscribers that were seeing large increases. They have 375K individual subscribers in NC. 30 PERCENT of those subscribers are seeing large increases. The same percentage goes for Coventry, Cigna, and all of the other health insurance companies that carry individual policies in this state. 4.6M in NC receive insurance through their employer. 1.6M Medicare, 1.4M Medicaid, 435K Individual policies and 1.5M uninsured. Yet you constantly refer to the 125K BCBS individual policies like they are the only policies in NC. Classic Junk. - misschris234

    But ... but ... but ... Junkmail is NEVER wrong. He's the only one who knows how the ACA works (according to him).

  • misschris234 Dec 12, 9:57 a.m.

    And I DO have friends that will be getting cheaper insurance on the exchange because of subsidies/cost sharing. However, they are all in the service industry, or commissioned employees. Some of them are going to struggle if their actual income is above that 10% threshold in 2015.

    What gets me are articles like this. One of my favorite lines is "You can also consider reducing your 2014 income by working just a bit less" (you have to remove the space after "net" in the article because WRAL thought it formed a bad word, LOL

    http://www.sfgate.com/business/networth/article/Lower-2014-income-can-net -huge-health-care-subsidy-4891087.php#page-1

  • admyank Dec 12, 9:45 a.m.

    Well, we just notified all of our staff that they have a Christmas Bonus this year, but no Job on January 1. Obamacare would make it so any profit that was set up for small businesses does not allow for anything, so now no profit, no hiring.

    That is how it crumbles. Profits go for buying improvements, construction, Research and Development, hiring folks, you name it - it is used for all of it.

    Now that profit is eliminated in Small Businesses, they can't stay ahead - so all of those big businesses that Democrats hate? Just got BIGGER.

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