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Author: erikinthered100 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 4333  
Subject: Re: Sticking it to the lower-income folks Date: 1/9/2013 1:19 AM
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Figure in hiring costs (not trivial), the training costs, and all that you can easily get to a dollar an hour per each new employee. I highly doubt he is saving any money by adding employees. Every employee requires more supervision, more overhead, etc. More shifts means that there is more potential for an employee to be late or call in sick or what have you. Adding employees is not a good way to control costs.

True but there are likely a number of companies which will find it advantageous, indeed economically necessary, to lower full time employees due to the disincentives/penalties for full time employees in Obamacare. In some cases, this might mean a few extra part timers or just fewer employees overall.

Here is some even more elementary math. The employer is figuring health insurance costs roughly $2000 per employee per year. But he could skip that and simply pay $750 in higher taxes. I bet he'd come out way ahead.

Yes, as has been pointed out here before, Obamacare encourages companies to just drop health insurance coverage for employees. A number of companies have plans to do so. I'm not sure exactly how this will play out. But it looks like it will shove many more millions from good private health care into Medicaid (especially since the law has no free market reforms or tort reform and only makes private coverage even more unaffordable). That's not sustainable for an already bankrupt and heavily indebted government with tens of trillions in current unfunded health care liabilities.

But all that aside, the author of the blog post is making a critical competitive mistake due to lack of understanding:

But most of my competitors are small businesses that are exempt from the Obamacare hammer.

That's not true. Because small businesses necessarily pay more for health insurance, they get some tax breaks. But they still have the same requirements to provide health insurance. So if his competitors are offering insurance and he isn't, he'll have a problem attracting and retaining employees.


As the last poster points out, the author of the blog post is correct. Obamacare exempts companies with less than 50 employees.

It is true that a market where employees are in high demand might favor providing insurance. But with expansion of eligibility/subsidies for government provided health care insurance this is less of an issue. And if you haven't noticed lately, unemployment is quite high and employers don't need to compete hard for employees.

Disastrous government policies are responsible for the current link of health care insurance to employment. They discriminate against an individual purchasing health care insurance and have driven the cost of health care to insane levels. Why should your health care depend on your employer? It's absolutely crazy. Instead of increasing the link of health care insurance to employment, real health care reform would do the exact opposite. In doing so, it might also increase portability and affordability.

FWIW, I ready industry boards on Linkedin and such every day and I have yet to seen anyone mention Obamacare as an industry consideration.

Obviously, economic reality rules and whether it's mentioned or not, it is a consideration. Actually, since Obamacare is such a huge almost incomprehensible monstrosity, nobody knows exactly how its implementation will affect companies and the economy. But the current prognosis is almost universally very bad to very very bad.

dave
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