October 19, 2010

ObamaCare News In Review: More Turbulence for Businesses

[] As ObamaCare Prepares For Take-off, Boeing And Other Businesses Strap In For A Bumpy Ride

Boeing Will Require 90,000 Nonunion Employees To Contribute "Significantly" More To Their Health Care Plans In Part Due To ObamaCare. "Aerospace giant Boeing is joining the list of companies that say the new health care law could have a potential downside for their workers.  In a letter mailed to employees late last week, the company cited the overhaul as part of the reason it is asking some 90,000 nonunion workers to pay significantly more for their health plan next year. A copy of the letter was obtained Monday by The Associated Press." (Ricardo Alonso-Zaldivar, "Citing Health Care Law, Boeing Pares Employee Plan," The AP, 10/18/10)
  • Boeing Vice President For Human Resources Says ObamaCare Is "Adding Cost Pressure As Requirements Of The New Law Are Phased In." "'The newly enacted health care reform legislation, while intended to expand access to care for millions of uninsured Americans, is also adding cost pressure as requirements of the new law are phased in over the next several years,' wrote Rick Stephens, Boeing's senior vice president for human resources." Ibid
  • Boeing Is Worried About A 40 Percent Tax On "Cadillac" Health Care Plans. "Spokeswoman Karen Forte said the Boeing plan is more generous than what its closest competitors offer, and the company was concerned it would get hit with a new tax under the law. The tax on so-called 'Cadillac' health plans doesn't take effect until 2018, but employers are already beginning to assess their exposure because it is hefty: at 40 percent of the value above $10,200 for individual coverage and $27,500 for a family plan." Ibid
"3M Co. On Friday Informed Retirees And Workers It Will Stop Offering A Group Health-Insurance Plan To Retirees Not Old Enough For Medicare By 2015, Citing The Federal Health Overhaul As A Factor." (Janet Adamy, "3M To Change Health-Plan Options For Workers," The Wall Street Journal, 10/4/10)
  • 3M Will Change The Plans Of Retirees Who Are Too Young To Qualify For Medicare And Those That Qualify For Medicare. "The St. Paul, Minn., manufacturing conglomerate notified employees on Friday that it would change retiree benefits both for those who are too young to qualify for Medicare and for those who qualify for the Medicare program. Both groups will get an unspecified health reimbursement instead of having access to a company-sponsored health plan." Ibid
  • "'In Addition, Health Care Reform Has Made It More Difficult For Employers Like 3M To Provide A Plan That Will Remain Competitive,' The Memo Said." Ibid
Caterpillar Inc. Said Obama's Health Care Bill Would Increase Their Costs By $100 Million In First Year, "Place [Them] At A Disadvantage Versus [Their] Global Competitors." "Caterpillar Inc. said the health-care overhaul legislation being considered by the U.S. House would increase the company's health-care costs by more than $100 million in the first year alone. ... 'We can ill-afford cost increases that place us at a disadvantage versus our global competitors,' said the letter signed by Gregory Folley, vice president and chief human resources officer of Caterpillar. 'We are disappointed that efforts at reform have not addressed the cost concerns we've raised throughout the year.'" ("Caterpillar: Health Care Bill Would Cost It $100M," Dow Jones Newswires, 3/19/10)

White Castle Predicts ObamaCare Will Consume More Than Half Its Profits. "The White Castle hamburger chain fears that a health insurance reform law adopted earlier this year will put its profits on a downward slide. The Columbus-based family owned restaurant chain - known for serving small square hamburgers called 'sliders' - says a single provision in the bill will eat up roughly 55 percent of its yearly net income after 2014." (Sabrina Eaton, "Ohio Hamburger Chain Says Insurance Reform Will Bite Into Profits," The Cleveland Plain Dealer, 7/4/2010)
  • ObamaCare Will Make It Hard For White Castle To Maintain Current Jobs, "Let Alone Create New Jobs." "The financial hit will make it hard for the company to maintain its 421 restaurants, let alone create new jobs, says company spokesman Jamie Richardson. White Castle employs more than 10,000 people nationwide, and more than 1,200 in Ohio." Ibid
"A New Study By Accounting Firm PricewaterhouseCoopers Found That Nearly Half (47 Percent) Of Executives Surveyed Expect The New Healthcare Law To Have A 'Notable Financial Impact On Their Businesses.'" (Jay Heflin, "Study: Healthcare Reform A Financial Hit To Firms," The Hill's "On The Money" Blog, 10/14/10)

Businesses Are Trying To Adjust To ObamaCare And The Tax Hikes Contained In ObamaCare. "One issue troubling executives is adjusting to reform while trying to accommodate for the coming tax hikes included in the new law. 'It's possible this could create a cash flow issue as CEOs look to continue reinvesting in their business,' said Ken Esch, a partner in the firm's Private Company Services practice, in prepared remarks." Ibid

A Majority Of Employers Are "Likely To Change Employee Contributions For Medical Coverage." "Over half of the respondents (52 percent) are likely to significantly change employee contributions for medical coverage. Of the 11 percent of respondents whose healthcare plans cover retirees, 46 percent are likely to significantly change their current retiree plans because of healthcare reform." "Ibid

"'The Potential Business Impact Of Health Reform Is Just One Among A Host Of Issues, Regulatory, Legislative, Economic, That's Creating Uncertainty For CEO's Right Now,' Esch Said." Ibid

Employers Are Dragging Their Feet When It Comes To Hiring Citing Uncertainty Surrounding Taxes And Regulation. "Increasingly, though, economists and job seekers are identifying another problem: Employers are being pickier, or not trying as hard as they usually do to fill the openings they have. The reasons for the foot-dragging are closely related to the reasons employers aren't creating many openings in the first place. Companies lack confidence about the outlook for consumer demand, they're not sure what the government will do with taxes and regulation, and they want to keep squeezing as much output from their current workers as they can." (Mark Whitehouse, "Unfilled Openings Frustrate The Jobless," The Wall Street Journal, 10/11/10)
  • Delay In Hiring Could Last For Another Year. "'What we're seeing is delay' says Jeff Joerres, chief executive of staffing firm Manpower Inc., noting that clients are taking a lot longer to fill positions, even when they've been presented with the right candidate. He says he expects the problem to persist at least through next year." Ibid
Almost Half Of Likely Voters Have An Unfavorable View Of ObamaCare. "Public support for healthcare reform ticked downward in October, suffering from an especially negative opinion among likely voters. Almost half of likely voters in next month's elections said they have an unfavorable view of Democrats' signature legislation -- a more negative take on healthcare reform than the general public. Forty-nine percent of likely voters said they have an unfavorable opinion of the healthcare bill, according to the Kaiser Health Tracking Poll, compared to 39 percent who have a favorable opinion. Twelve percent of likely voters said they have no opinion." (Michael O'Brien, "Almost Half Of Likely Voters View HealthCare Reform Unfavorably," The Hill, 10/18/10)

"An Earlier Poll By The Hill Also Pointed To Problems For Democrats With Healthcare. In The Hill Poll Of 12 Battleground Districts Won By Freshman House Democrats In 2008, A Majority Of Those Surveyed Favored Repeal. Even 23 Percent Of Democrats Polled In The Dozen Districts Favored Repeal." Ibid

Sixty-Two Percent Of Voters Think That The Tax On "Cadillac" Health Care Plans Should Be Repealed. "Another poll, conducted earlier this month by Bloomberg News, found that some of the most central pieces of the legislation fare poorly with the public. Sixty-two percent of voters said in that poll that the tax on high-value insurance plans (the so-called 'Cadillac tax') should be repealed, and 51 percent favored repeal of the requirement that each individual have health insurance." Ibid

Missouri Voters Overwhelmingly Passed A Ballot Initiative That Exempts The State From The Unpopular Measures Of ObamaCare. "Missouri voters approved the initiative with just over 71 percent in favor of the ballot language, which looks to exempt residents from the new rules requiring individuals to have health insurance, and also businesses, which have to provide health insurance options to employees or face stiff penalties."(Michael O' Brian, "Top Republicans Trumpet Missouri Ballot Initiative On Health Reform," The Hill's "Healthwatch" Blog ,
  • The Passage Of Proposition C Is "The First Tangible Demonstration Of How Unpopular The President's Signature Achievement" Is In Missouri. "The overwhelming vote in favor of Proposition C, a measure crafted to reject a portion of the law that requires most people to carry health insurance by 2014 or pay a fine, is the first tangible demonstration of how unpopular the president's signature achievement remains in the Midwestern state." (David Catanese, "Proposition C Spells Trouble For Robin Caranhan," Politico, 8/6/10)
  • "Equally Worrisome Is The Fact That In Some Traditionally Democratic Counties, Like Jefferson County, Which Is Part Of Democratic Rep. Russ Carnahan's Southside St. Louis District, The Initiative Passed With Over 70 Percent." Ibid

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