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The Coming ObamaCare Shock

Millions of Americans will pay more for health insurance, lose their coverage, or have their hours of work cut back.

In recent weeks, there have been increasing expressions of concern from surprising quarters about the implementation of ObamaCare. Montana Sen. Max Baucus, a Democrat, called it a “train wreck.” A Democratic colleague, West Virginia’s Sen. Jay Rockefeller, described the massive Affordable Care Act as “beyond comprehension.” Henry Chao, the government’s chief technical officer in charge of putting in place the insurance exchanges mandated by the law, was quoted in the Congressional Quarterly as saying “I’m pretty nervous . . . Let’s just make sure it’s not a third-world experience.”

These individuals are worried for good reason. The unpopular health-care law’s rollout is going to be rough. It will also administer several price (and other) shocks to tens of millions of Americans.

  • Start with people who have individual and small-group health insurance. These policies are most affected by ObamaCare’s community-rating regulations, which require insurers to accept everyone but limit or ban them from varying premiums based on age or health. The law also mandates “essential” benefits that are far more generous than those currently offered.
  • Single adults age 21-29 earning 300% to 400% of the federal poverty level will be hit with an increase of 46% even after premium assistance from tax credits.
  • Six million of the 19 million people with individual health policies are going to have to pay more—and this even after accounting for the government subsidies offered under the law.
  • In total, it appears that there will be 30 million to 40 million people damaged in some fashion by the Affordable Care Act—more than one in 10 Americans.

Determining the number of individuals who will be harmed by changes to the small-group insurance market is harder. According to the Medical Expenditure Panel Survey, conducted by the Department of Health and Human Services, around 30 million Americans work in firms with fewer than 50 employees, and so are potentially affected by the small-group “reforms” imposed by ObamaCare.

Around nine million of these people, plus six million family members, are covered by employers who do not self-insure. The premium increases for this group will be less on average than those for people in the individual market but will still be substantial.

  • According to analyses conducted by the insurer WellPoint for 11 states, small-group premiums are expected to increase by 13%-23% on average.

While some firms (primarily those that employ older or sicker workers) will see premium decreases due to community rating, firms with younger, healthier workers will see very large increases: 89% in Missouri, 91% in Indiana and 101% in Nevada.

Because the government subsidies to purchasers of health insurance in the small-group market are significantly smaller than those in the individual market, I estimate that another 10 million people, the approximately two-thirds of the market that is low- or average-risk, will see higher insurance bills for 2014.

Higher premiums are just the beginning, because virtually all existing policies in the individual market and the vast majority in the small-group market do not cover all of the “essential” benefits mandated by the law. Policies without premium increases will have to change, probably by shifting to more restrictive networks of doctors and hospitals. Even if only one third of these policies are affected, this amounts to more than five million people.

In addition, according to Congressional Budget Office projections in July and September 2012, three million people will lose their insurance altogether in 2014 due to the law, and six million will have to pay the individual-mandate tax penalty in 2016 because they don’t want or won’t be able to afford coverage, even with the subsidies.

None of this counts the people whose employment opportunities will suffer because of disincentives under ObamaCare. Some, whose employers have to pay a tax penalty because their policies do not carry sufficiently generous insurance, will see their wages fall. Others will lose their jobs or see their hours reduced.

Anecdotal evidence already suggests that these disincentives will really matter in the job market, as full-time jobs are converted to part time. Why would employers do this? Because they aren’t subject to a tax penalty for employees who work less than 30 hours per week.

There is some debate over how large these effects will be, and how long they will take to manifest. However, the Bureau of Labor Statistics reports on a category of workers who will almost surely be involuntarily underemployed as a result of health reform: the 10 million part-timers who now work 30-34 hours per week.

These workers are particularly vulnerable. Reducing their hours to 29 avoids the employer tax penalty, with relatively little disruption to the workplace. Fewer than one million of them, according to calculations based on the Medical Expenditure Panel Survey, get covered by ObamaCare-compliant insurance from their employer.

When that reality becomes clearer, the law is going to start losing its friends in the media, who are inclined to support the president and his initiatives. We’ll hear about innocent victims who saw their premiums skyrocket, who were barred from seeing their usual doctor, who had their hours cut or lost their insurance entirely—all thanks to the faceless bureaucracy administering a federal law.

The allure of the David-versus-Goliath narrative is likely to prove irresistible to the media, raising the pressure on Washington to repeal or dramatically modify the law. With the implementation of ObamaCare beginning to take full force at the end of the year, there will be plenty of time before the 2014 midterm elections for Congress to consider its options.

For those like Health and Human Services Secretary Kathleen Sebelius, who told a gathering a few weeks ago at the Harvard School of Public Health that she has been “surprised” by the political wrangling caused so far by ObamaCare, there are likely to be plenty of surprises ahead.

*Modified from a WSJ article by Daniel Kessler

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Survey: Fewer Calif. Firms Offer Health Insurance to Workers

The proportion of California employers that offer health insurance to workers declined significantly in the previous decade, according to a new survey by the California HealthCare Foundation, the Sacramento Bee’s “Capitol Alert” reports.

  • The survey found that the proportion of employers in the state offering health coverage to workers declined from 71% in 2002 to 60% in 2012
  • According to the survey, the cost of health insurance has increased by nearly 170% since 2002, which is more than five times the 31.5% increase in the state’s overall inflation rate
  • The survey found that the average premium for single-person health coverage was $545 per month in 2012, compared with the national average of $468. Meanwhile, the average premium for family coverage was $1,386 in California, compared with the national average of $1,312.
  • According to the survey, larger employers with high proportions of full-time workers were most likely to offer health coverage to employees. It also found that deductibles were more likely to be significantly higher among small employers than among large employers
  • Meanwhile, 21% of employers said that they increased workers’ share of premium costs during 2012, while 17% said that they reduced benefits or absorbed increases .

*Modified from a CaliforniaHealthline.com article

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Humana CEO: Health insurance will go the way of pensions

The health care system of the future will likely come with fewer guarantees, said Bruce Broussard, CEO of Humana Inc.

  • In other words, rather than offering a health plan, employers will probably begin offering specified payments and telling their employees to buy their own insurance.
  •  “What happened to retirement is probably going to happen to health care,” Broussard told me Wednesday. The shift, from defined-benefit to defined-contribution plans, is exactly what happened when 401k retirement accounts replaced pensions.

Broussard figures that change will take a decade to kick in fully. Corporations will increasingly use wellness offerings, he said, to differentiate themselves in recruiting.

Questions that insurance companies already face, such as whether their customer is the employer or the individual, will be amplified. “Our role becomes a role around health more than just the financing of health care,” he said.

*Modified from a Cincinnati Business Courier article

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Little hope seen for millions priced out of health overhaul

Millions of Americans will be priced out of health insurance under President Barack Obama’s healthcare overhaul because of a glitch in the law that adversely affects people with modest incomes who cannot afford family coverage offered by their employers, a leading healthcare advocacy group said on Tuesday.

  • In its rule making, or final interpretation of the law, the IRS said affordability should be based strictly on individual coverage costs.
  • Tax credits are a key component of the law and the White House has said the credits, averaging about $4,000 apiece, will help about 18 million individuals and families pay for health insurance once the Affordable Care Act takes full effect, beginning in January 2014.
  • The tax credits are geared toward low and middle-income Americans who do not have access to affordable health insurance coverage through an employer. The law specifies that employer-sponsored insurance is affordable so long as a worker’s share of the premium does not exceed 9.5 percent of the worker’s household income.
  • That means that, even if family coverage through an employer-based plan far exceeds the 9.5 percent cutoff, workers would not be eligible for the tax credits to help buy insurance for children or non-working dependents.
  • “It could mean the difference between being able to move in to purchasing private insurance and not purchasing private insurance.

“It’s an issue. It needs to be fixed,” Ron Pollack, executive director of Families USA, an influential healthcare advocacy group said on Tuesday, referring to what he called “the family glitch problem.”

“The tax credit subsidies are a game changer. They will help make health coverage affordable for huge numbers of uninsured families who would have been priced out of the health coverage and care they need,” Pollack said.

Speaking after the call, Families USA health policy director Kathleen Stoll told Reuters recent studies showed that anywhere between 2 million and 4 million people across the United States would be adversely affected by the federal rule limiting aid and the IRS interpretation of whether an employer’s health plan is affordable.

 

*Modified from a Reuters article

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Obamacare Insurance Plans Will Be Bare Bones — And Expensive

There’s mounting evidence that come fall, the health plans sold through the Obamacare exchanges will be bare bones affairs – with narrow networks of providers to select from, and heavy co-insurance once patients go “out of network.”

In many ways these plans will be a throwback to insurance schemes of the late 1990s, when managed care was dominant and restrictive networks standard fare. With one difference: The Obamacare plans won’t be cheap.

Quality of coverage is just one issue. Price is the other. There’s mounting evidence that even though the new health coverage will be austere, it’ll still be pricey.

Health plans have ample incentives to price the Obamacare coverage high, which is precisely what they’re likely to do.

  • For one thing, insurers will want to protect against the risk that individuals entering the exchanges are those who most need health insurance because of pre-existing illness. If this sort of “adverse selection” occurs, it will raise costs to insurers. To guard against this, insurers are likely to price the coverage at a premium.
  • Second, health plans want to reduce uncertainty around how all the risk-sharing provisions in Obamacare will eventually play out. The legislation puts in place mechanisms that forces Washington to share with health plans some of the cost of the covering the sickest beneficiaries. But the regulations outlining these parameters were only released last Friday. Nobody yet trusts how they’ll work.
  • Third, health insurers will want to reduce the incentive for employers to drop coverage and dump employees into the exchanges. This is especially true when it comes to insurers’ lucrative small group and large group segments. If insurers price the exchange products too low, they’ll give employers another inducement to do this sort of dropping. By pricing exchange products higher relative to the insurance offered in the private market, they reduce this incentive.
  • Finally, the providers that Obamacare plans must contract with are unlikely to offer significant price cuts to attract this volume. Since the Obamacare plans are likely to pay providers less than rates offered by standard private coverage (and maybe even less than Medicare rates) many doctors could also refuse to accept Obamacare, just like they refuse Medicaid. Or refuse to offer insurers discounts for these patients.

To mitigate uncertainty, plans will price their products high. Insurers know that any excess profits they earn will have to be paid back to the government, anyway (owing to caps that Obamacare places on how much profit health plans can earn). Health plans are better off aiming high, and owing money back, then getting underwater. After all, Washington takes away “excess” profits, but it doesn’t share in losses.

The architects of Obamacare designed the scheme without much thought to how its overlapping incentives would discourage competition on the price of the new coverage. Health plans will try to drive down costs by offering very narrow networks of providers that they can more easily control. It will be a race to the bottom to see which plan can offer the cheapest benefit, while still meeting minimum standards. But it won’t be a race to the bottom on price.

Plans have too many reasons to price their products cautiously, and not automatically pass along any cost savings to consumers.

If the Obamacare plans are priced higher than initial assumptions made by the Congressional Budget Office, it will burst the estimates placed on Obamacare’s total costs. It could also make these plans unappealing to consumers.

 
* Modified from a RealClearMarkets.com article by Scott Gottlieb

 

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Seven million will lose insurance under Obama health law

President Obama’s health care law will push 7 million people out of their job-based insurance coverage — nearly twice the previous estimate, according to the latest estimates from the Congressional Budget Office released Tuesday.

  • CBO said that this year’s tax cuts have changed the incentives for businesses and made it less attractive to pay for insurance, meaning fewer will decide to do so. Instead, they’ll choose to pay a penalty to the government, totaling $13 billion in higher fees over the next decade.

But the non-partisan agency also expects fewer people to have to pay individual penalties to the IRS than it earlier projects, because of a better method for calculating incomes that found more people will be exempt.

Overall, the new health provisions are expected to cost the government $1.165 trillion over the next decade — the same as last year’s projection.

With other spending cuts and tax increases called for in the health law, though, CBO still says Mr. Obama’s signature achievement will reduce budget deficits in the short term.

During the health care debate Mr. Obama had said individuals would be able to keep their plans.

*Modified from a Washington Times article

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Will some families be priced out of health overhaul?

Some families could get priced out of health insurance due to what’s being called a glitch in President Barack Obama’s overhaul law. IRS regulations issued Wednesday failed to fix the problem as liberal backers of the president’s plan had hoped.

As a result, some families that can’t afford the employer coverage that they are offered on the job will not be able to get financial assistance from the government to buy private health insurance on their own. How many people will be affected is unclear.

The problem seems to be the way the law defined affordable.

  • Congress said affordable coverage can’t cost more than 9.5 percent of family income. People with coverage the law considers affordable cannot get subsidies to go into the new insurance markets. The purpose of that restriction was to prevent a stampede away from employer coverage.
  • Congress went on to say that what counts as affordable is keyed to the cost of self-only coverage offered to an individual worker, not his or her family. A typical workplace plan costs about $5,600 for an individual worker. But the cost of family coverage is nearly three times higher, about $15,700, according to the Kaiser Family Foundation.
  • So if the employer isn’t willing to chip in for family premiums _ as most big companies already do _ some families will be out of luck. They may not be able to afford the full premium on their own, and they’d be locked out of the subsidies in the health care overhaul law.

Employers are relieved that the Obama administration didn’t try to put the cost of providing family coverage on them.

“They are bound by the law and cannot extend further than what the law provides,” said Neil Trautwein, a vice president of the National Retail Federation.

The Obama administration says its hands were tied by the way Congress wrote the law. Officials said the administration tried to mitigate the impact. Families that can’t get coverage because of the glitch will not face a tax penalty for remaining uninsured, the IRS rules said.

“This is a very significant problem, and we have urged that it be fixed,” said Ron Pollack, executive director of Families USA, an advocacy group that supported the overhaul from its early days. “It is clear that the only way this can be fixed is through legislation and not the regulatory process.”

But there’s not much hope for an immediate fix from Congress, since the House is controlled by Republicans who would still like to see the whole law repealed.

The affordability glitch is one of a series of problems coming into sharper focus as the law moves to full implementation.

Starting Oct. 1, many middle-class uninsured will be able to sign up for government-subsidized private coverage through new health care marketplaces known as exchanges. Coverage will be effective Jan. 1. Low-income people will be steered to expanded safety-net programs. At the same time, virtually all Americans will be required to carry health insurance, either through an employer, a government program, or by buying their own plan.

Bruce Lesley, president of First Focus, an advocacy group for children, cited estimates that close to 500,000 children could remain uninsured because of the glitch. “The children’s community is disappointed by the administration’s decision to deny access to coverage for children based on a bogus definition of affordability,” Lesley said in a statement.
*Modified from an AP article

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New regulations shed light on looming health-care reform costs for businesses

January 16, 2013

The ramifications of health care reform for business owners are coming into focus as regulators float new rules to govern employer-sponsored coverage.

  • Lost in the political fervor over the fiscal cliff, the Internal Revenue Service recently proposed new regulations to govern what has been dubbed the “employer mandate” section of the Affordable Care Act. The provision, which takes effect next year, requires companies with 50 or more employees to either provide adequate and affordable coverage to their workers or pay tax penalties.

But just how are those 50 to be counted?

Business owners have been waiting to find out how part-time and seasonal employees will count toward staff totals, how owners of more than one business are supposed to tally their workers, and of course, exactly how steep the penalties will be for failing to provide coverage.

The IRS addresses several of those issues with its newly proposed regulations. Here’s a look at what we now know about the employer health care requirements, as well as three key questions that remain unanswered.

Included in the proposed rules

A formula for calculating full-time equivalents: The health care law set the threshold for large-employer penalties at 50 full-time employees and full-time equivalents, but left the definition of those terms up to the IRS.

  • The agency has proposed counting all employees who work an average of 30 hours per week as full-time workers and calculating full-time equivalents by adding up the total number of hours worked by part-time employees each month and dividing by 120. Thus, a company with 45 full-time employees and eight part-timers who each work 85 hours per month (about 20 hours each per week) would be subject the large-employer coverage mandate (5.66 full-time equivalents + 45 full-time employees = 50.66 employees).

A slim margin-of-error for no-coverage penalty: The law states that a no-coverage penalty shall apply to any eligible large company that “fails to offer [coverage] to its full-time employees,” and the penalty has been pegged at $166.67 per month multiplied by the number of full-time employees, excluding the first 30. By that formula, a firm with 51 full-timers that doesn’t provide coverage would generally pay $3,500 per month (21 X $166.67).

But while that language granted regulators permission to penalize large firms that do not immediately provide benefits to each and every full-time employee, the IRS has granted some leniency. The new regulations would only enforce the non-coverage penalty for employers who fail to offer coverage to more than 5 percent of their employees (or five workers, whichever is larger).

  • The inclusion of paid-leave hours: But what about paid vacation, holidays or extended leaves—do those hours count toward monthly totals for each employee?

This was a pressing question for many business owners, and most of them won’t like the answer. Regulators have suggested that hours used to determine full-time status will include hours worked and hours for which employees are entitled to compensation even if no work is performed. That means time spent away for paid vacation, illness, maternity leave and even jury duty can push workers over the threshold for full-time benefits.

  • A transition rule for determining employer-size status: Business owners must make their own large- or small-employer determination on an annual basis by counting the number of full-time employees and equivalents they had during each month of the past calendar year.

But for the first year, to ease the transition, regulators have included a provision that allows them to count their employees for any six-month period in 2013 to determine their size status for 2014. The rules also delay the penalty for failing to provide coverage to employees’ dependents until 2015 so long as large employers that don’t yet offer those benefits take steps toward implementing them by 2015.

  • A delayed start for non-calendar year plans: The law states that the employer mandate provisions will take effect on January 1, 2014, which left business owners with fiscal-year (rather than calendar-year) health care plans wondering whether they would be held to that start date (which may fall right in the middle of their current plan) or permitted to wait until the start of their 2014 fiscal year. The proposed regulations grant them that break, noting that large businesses will not be subject to penalties until the start of their plan year for 2014.

Still up in the air

What constitutes a controlling interest in a business? The language in these latest proposals remains vague for owners of multiple businesses and part-owners of a single business. For example, if a pair of business partners share ownership of two companies, each taking a two-thirds majority stake in one firm and one-third ownership of the other, the regulations do not specify whether they will each be forced to count only one entity’s employees toward their respective totals or whether they will both count all workers.

What constitutes a seasonal employee?

The regulations leave the term “seasonal employee” open to interpretation when calculating their contribution to a company’s size status and their eligibility for health benefits. In one case, the regulations refer to definitions of “seasonal employee” set by the Labor Department, but later, regulators state that through at least the end of 2014, employers will be responsible for using a “reasonable good faith interpretation” of the term to determine which of their workers should be considered seasonal.

What constitutes adequate and affordable care? While the IRS has started to clarify the tax penalty side of the health reform equation, plenty of large employers are still waiting for the Department of Health and Human Services to define the law’s essential health benefits package — in other words, they haven’t yet been told what type of medical and health-related expenses their plans must cover for full-time employees. Until then, projecting future health costs for many businesses remains difficult.

*Modified from a Washington Post article

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Insurers’ 2014 hikes already taking toll

If you work for a small business, your next health insurance premium may give you sticker shock.

Many of the small-business and individual insurance policies are working the health reform law’s 2014 fees into their 2013 bills, contributing to double-digit premium increases for some people.

All those new consumer benefits packed into the health reform law — birth control without a co-pay, free preventive care and limits on when insurers can turn down a customer — had to be paid for somehow.

So the law’s drafters included a new tax on health insurers, starting at $8 billion in 2014 and increasing to $14 billion within four years, to help meet the new expenses. And insurers in 2014 will also have to pay a “reinsurance contribution” to cushion health plans that end up with a lot of sick customers under new rules requiring them to cover people with pre-existing conditions.

Some health insurance companies are getting a jump-start, passing on those 2014 fees to consumers in policies that start in 2013. While insurance rates have been going up for years — and not all of the new increases can be pinned to the health law — the hikes will certainly give more fuel to Obamacare critics.

  • Insurers say they have no choice but to increase premiums to cover those costs. But it’s hitting pocketbooks sooner than some people expected, and that’s causing controversy.

Everyone, even many of the law’s supporters, admit premiums are going to go up under the health law — although many people will get subsidies to help pay for coverage. Many of the costs — and the priciest benefits — were pushed beyond the 2012 election to 2014. But if the public revolts when they see 10 percent,15 percent or 20 percent rate hikes, already shaky support for the health law could suffer.

That means there’s a lot at stake for insurance companies and the law’s supporters when consumers see their health insurance bills. The law’s backers have a history of using steep rate increases to garner public support for health reform — and against insurers. One turning point that helped the law’s passage was when Democrats blasted a 39 percent rate increase requested by Anthem Blue Cross in California in early 2010.

Now, insurers are being proactive, arguing the health law is driving the increase in prices.

  • “There’s a massive new health insurance tax that starts in 2014,” said Robert Zirkelbach, a spokesman for industry group America’s Health Insurance Plans. “For policies that are sold in 2013 and extend into next year, there’s going to be taxes imposed. … As a result, like all taxes, they will be reflected in premiums charged.”

But insurers are already getting in trouble with at least one state insurance commissioner. California Insurance Commissioner Dave Jones said this week that Anthem Blue Cross is “unlawfully” including the 2014 fees in its 2013 rates.

“California state law requires that premiums bear a relationship to the insurance sold to a particular customer,” Jones told POLITICO. “In this case, what’s happening is that Anthem Blue Cross is collecting from customers … a fee that Anthem Blue Cross doesn’t have to pay until 2014.”

Anthem spokeswoman Kristin Binns said the company has to collect the fees in yearlong policies that start in 2013 because they’ll extend into 2014. And the fee is prorated in a customer’s premium so they’re paying for only the 2014 part of the policy.

Jones said that doesn’t make it right. “They should wait until 2014 to do it.” Anthem’s not alone. A review of rate filings posted on a website managed by the Department of Health and Human Services shows many insurers are charging 2014 fees in new policies and renewals issued in 2013.

Premiums for small group policies from CareFirst BlueChoice in the District will rise an average of 11.8 percent after April 1.

The price of an Aetna small group plan in Illinois will jump 13 percent in 2013 and 16.5 percent in Pennsylvania. A small group policy from Anthem in Connecticut will increase 13.8 percent this year, too. All of those plans said in their filings that the 2014 health reform law fees account for at least a portion of the price spikes .

The health insurance tax is going to have the largest impact. It is expected to increase premiums by about 1.9 percent to 2.3 percent in 2014, according to a study by Oliver Wyman that has been touted by the insurance industry.

Insurance giant Aetna said in its rate filings that the tax on health insurers accounts for 1 percent of its proposed premium increase, and the reinsurance fee accounts for 0.5 percent. Several insurers also said the new preventive care requirements, such as birth control coverage without a co-pay, contribute to their new rates. And they point to medical costs, which are increasing more slowly than they used to but still faster than the overall economy is growing.

CareFirst BlueCross BlueShield spokesman Michael Sullivan said the fee increases in its policies will be prorated for the portion of the yearlong policy that extends into 2014. He called it a “fairly common industry practice.” “The approach that we’re taking here is making sure that the share of those things we have to pay in 2014 is reflected in the premiums,” Sullivan said.

* Modified from an article by By JENNIFER HABERKORN | 1/11/13

 

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OBAMACARE LAYOFFS, HIRING FREEZES BEGIN

Obamacare opponents warned that forcing companies employing 50 or more full-time workers to buy healthcare would prompt employers to slash jobs and worker hours. And that’s exactly what’s happening, says one of President Barack Obama’s favorite economists, Mark Zandi of Moody’s Analytics. “It will have a negative impact on job creation” this year, says Mr. Zandi.

The Obamacare employer mandate doesn’t go into effect until January 1, 2014, but the government requires businesses to track worker schedules for three to 12 months in advance. That means many employers plan to get a jump start on avoiding Obamacare’s $2,000 per-worker fine by firing workers now, reducing employee hours, or replacing full-time employees with part-time workers.

A survey by the International Franchise Association finds that 31% of franchisees say they plan to cut staff to duck under Obamacare’s 50-employer mandate. And another study by Mercer consulting firm found that half of businesses who don’t presently offer health insurance plan to reduce employee hours to avert triggering Obamacare’s penalties.

As Breitbart News has reported, Pennsylvania Community College of Allegheny County has already slashed the hours of 400 adjunct instructors, support staff, and part-time teachers to sidestep the Obamacare fines. Doing so will save the already cash-strapped college an estimated $6 million.

Other Obamacare provisions, like the medical devise excise tax, have forced Stryker medical supply to cut 1,170 positions, despite the fact that the founder of the company’s grandson was among Mr. Obama’s biggest campaign donors. Other medical device makers like Boston Scientific, Dana Holding Corp., Welch Allyn, Medtronic, Kinetic Concepts, and Smith & Nephew have similarly forecast the needs to cut hundreds of jobs each as the result of Obamcare.

The day after Mr. Obama’s reelection, a Las Vegas employer fired 22 of his 114 employees citing Obamacare regulations as the culprit. Christine Ippolito of Compass Workforce Solutions says companies just under the 50 employee threshold now plan to hold off on hiring to avoid triggering the $2,000-per worker penalty. Ernie Canadeo, the president of EGC Group advertising agency, agrees. Mr. Canadeo says he had planned to hire 10 workers this year, but may wait so as not to cross the 50-worker mark.

The looming Obamacare layoffs and hiring freezes come as a Labor Department report announced today that the unemployment rate remains at 7.8% (revised up from the originally reported 7.7%). Presently, 22.6 million Americans are either unemployed, underemployed, or marginally attached to the work force.

*Modified from an article by Wynton Hall published January 5, 2013

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