Is Obamacare a ticking time bomb for some businesses?
The implementation of Obamacare has meant a big change for many businesses and it's not just the small companies that are potentially being hurt. Numerous businesses in several industries are feeling the burden.
The Affordable Care Act or Obamacare, as it's often called, affects companies with 50 employees or more and requires them to provide healthcare coverage. However, it only affects those who work 30 hours or above.
One way many companies have avoided the law by cutting down their full-time staff and giving them less than 30 hours.
While the number of people who are employed went up in 2013, the number of those with 30 or more hours actually decreased. This is a strong indication of how the Affordable Care Act is affecting businesses in many industries.
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How businesses are coping
Many companies in the food industry are responding by hiring part-time workers instead of full-time to avoid paying for healthcare.
Some companies that make medical devices are looking at moving overseas. They have already let go many employees. Stryker has cut its workforce by 1,000.
State governments are also dealing with the same issue by cutting staff. They are also cutting hours. For instance, the Alpine School District located in Utah gives employees 27.5 hours per week at most.
Hospitals are another industry that is making cuts to deal with Obamacare.
They are cutting jobs and figuring out how to make a budget that is prepared for the additional costs. For instance, the premiere Cleveland Clinic announced that it would reduce its $6 billion budget by five to six percent.
Colleges also have to figure out how they are going to handle the additional expense. Some of them are cutting workers' hours while others are reducing staff.
How businesses can prepare
It's not too late to begin preparing for the ramifications of the Affordable Care Act. Talk to your accountant to find out what you are required to do and what kind of credits you can claim.
For instance, some small businesses can receive tax credits if they offer health care plans to their staff. You also need to know how many employees you have. While this is a simple process for some small businesses, it can be confusing to companies that employ temporary or seasonal staff.
Talk to your accountant about creating a budget that covers your expenses if you are required to participate.
You may have to look at some cuts in other areas. While this may mean cutting workers or their hours, you may be able to find other ways to afford the extra expense.
Businesses and organizations are finding different ways to deal with the effects of Obamacare.
Many times it impacts those who work for the companies. This only adds fuel to the fire for the opponents of the healthcare act who say it will hurt jobs and the economy.
Regardless of anyone's opinion of the law, everyone must deal with it one way or another.
About the author
Joyce Morse covers an array of subjects, among which include small business, marketing and social media.