Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Will Obamacare Cost You Your Job?

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Is your job in jeopardy because of Obamacare? Staunch advocates of the Patient Protection and Affordable Care Act would say absolutely not. Diehard opponents would maintain that many jobs are at risk because of Obamacare. What's the correct answer? It's a definite "maybe." Your job could be in jeopardy if your employer fits into one of these three categories.

1. Medical device companies
Several medical device companies have already slashed jobs or are planning to do so because of Obamacare. Abbott Labs (NYSE: ABT  ) began shedding the first of 1,900 jobs a few years ago. The company attributed the cuts partially to new fees and pricing pressures resulting from the Affordable Care Act.

Stryker (NYSE: SYK  ) executives placed blame squarely on the 2.3% medical device tax included in Obamacare as the reason for eliminating 5% of its workforce -- 1,170 jobs. Most of Stryker's cuts were implemented by the end of 2012 before the new taxes went into effect.

However, other medical device makers still have possible staff reductions looming on the horizon. Medtronic (NYSE: MDT  ) sent 500 employees home last summer and plans to cut another 500 jobs by the end of this year. Privately held Welch Allyn expects to eliminate 10% of its jobs over the next three years. 

If you work in the medical device sector, there is some hope, though, that further jobs won't be lost. Momentum appears to be building on both sides of the aisle in Washington to either repeal or modify this particular component of Obamacare. 

2. Small businesses
Obamacare requires that employers with more than 50 full-time workers provide health care coverage for employees beginning in 2014. For some small businesses, the extra costs for this coverage are forcing tough decisions. One alternative is to pay a $2,000-per-employee penalty for each worker over a 30-employee level. Some businesses will choose to pay the penalties because it's cheaper than providing insurance.

However, other small employers could cut jobs altogether to move below the 50-employee threshold established by Obamacare. For example, a small business with 54 full-time workers could decide that eliminating five jobs makes more economic sense than paying significantly more for health coverage or penalties. Another alternative that businesses could take is to keep employees but reduce their hours to less than 30 per week so that the workers won't be counted as full-time.

How significant are these risks of job losses from small businesses? Experts disagree, but the small businesses that appear to be most likely to face hard choices -- those with 20 to 99 employees -- account for more than 19 million jobs. A recent study from life insurance research organization LIMRA found that less than half of small business with fewer than 100 employees offer benefits to their employees currently. 

3. Organizations that can easily outsource jobs
There's one way that companies can avoid the additional health care costs from Obamacare but still keep the same number of workers: outsource the jobs. Temporary-employment agency Robert Half (NYSE: RHI  ) said in January that the company was receiving inquiries from employers with around 50 employees. These agencies don't have to provide health coverage unless the temporary worker is employed on a full-time basis for at least 12 months.

Another avenue for employers -- large or small -- to minimize added costs from Obamacare is to ship the jobs abroad. The health reform legislation doesn't require companies to provide health coverage for employees outside the U.S. Boston Scientific (NYSE: BSX  ) is one employer that, in addition to cutting jobs because of the new medical device tax, is also moving some operations to China.

Mixed bag
Despite studies from organizations such as the Urban Institute projecting that Obamacare wouldn't cost jobs, the reality appears to be otherwise. The Federal Reserve's Beige Book noted recently that "employers in several Districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff." Even an economist lauded in the past by the White House, Moody's Mark Zandi, says that the sluggishness in employment stems largely from small businesses not hiring because of the Patient Protection and Affordable Care Act.

However, Obamacare should create at least some jobs. The higher numbers of insured Americans will automatically increase demand for health care services, which will result in the need for more jobs for health care professionals, according to some pundits. Then there's the new requirement announced last week by the Department of Health and Human Services that could create thousands of jobs. All state-based health exchanges must hire "navigators" to assist individuals seeking insurance. What exactly will these "navigators" do? Explain Obamacare to people.

An even bigger issue?
Obamacare isn't the biggest issue facing America, according to billionaire Warren Buffett. What macro trend was Buffett referring to when he said "this is the tapeworm that's eating at American competitiveness"? Find out in our free report: What's Really Eating At America's Competitiveness. You'll also discover an idea to profit as companies work to eradicate this efficiency-sucking tapeworm. Just click here for free, immediate access.

Read/Post Comments (40) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 10, 2013, at 3:02 PM, watchhound wrote:

    Obama and the democrats both told us that " Obama care would not cost us jobs ". Looks like they both lied.

  • Report this Comment On April 10, 2013, at 3:07 PM, japohl wrote:

    It is not only going to cost us jobs but a LOT more money as well. I just finished reading an article about the first part of Obamacare failing. talks about how underfunded the first part of the act is underfunded and what may happen in 2014 when everything going live.

  • Report this Comment On April 10, 2013, at 3:11 PM, Paulson545 wrote:

    Not to worry. If obamacare costs you your job you can go on obamawelfare and obamafoodstamps and live in obamasection8housing while getting freeobamacare because you are now poor.

  • Report this Comment On April 10, 2013, at 3:13 PM, japohl wrote:

    Paul....don't forget about the ObamaPhones :)

  • Report this Comment On April 10, 2013, at 3:16 PM, ck63 wrote:

    Already has...

  • Report this Comment On April 10, 2013, at 3:16 PM, outoffocus wrote:

    I can tell you EXACTLY whats going to happen. It may cause some people to lose their jobs. But the even bigger impact is that it will cause alot of people to go from "employees" to "1099 contractors" and it may cause an even larger group of people to be paid "under the table". The high cost of compliance doesn't necessary stop economic activity. It will simply make noncompliance more lucrative.

  • Report this Comment On April 10, 2013, at 3:29 PM, KatDD wrote:

    My mother-in-law was laid off from her job of 19 years because they were cutting ALL full time employees due to this crap healthcare. GO OBAMA and congress! Keep on screwing over the people YOU serve. You said this would have no affect on jobs. Really? Do you think companies are going to tap into their profit to help others? Nothing better than having one idiot president after another.

  • Report this Comment On April 10, 2013, at 3:31 PM, 15111511 wrote:

    Be Careful America, This Guy Obama Whom Most Of Us Put All Our Hopes On Is Turning Out To Be The Real 'MANCHURIAN CANDIDATE!' After Promising Up and Down He Would NEVER Lower Social Security Benefits He Has Done A Turnabout And Planning To Do It ANYWAY!!! . . . He Is Not To Be TRUSTED!!!! . . . And Any DEMOCRAT Who Doesn't Vote This Betrayal Down In Congress Must Be Ousted In The 2014 Mid-Terms!! To Save America We Need Capitol Hill Representatives and Senators Who KEEP THEIR WORD TO THE PEOPLE WHO ELECTED THEM!!!

  • Report this Comment On April 10, 2013, at 3:33 PM, michaelmar wrote:

    Another increase in jobs...the 10000+ new IRS agents to audit for compliance with Obamacare.

    Obamacare was designed to fail, and once it does the Libs will tell us it failed because we need single payor govt health insurance. But it is govt interference in the market that actually causes all the problems.

    All of the consequences were foreseable and anticipated by anyone with common sense...more coverages never equals lower premiums. Lower reimbursements to doctors reduces the number of doctors, or they refuse patients on govt programs. Higher costs of employment cause fewer jobs. Taxes on medical devices will be paid by middle and low income patients through increased prices. Taxes on health plans will be passed on to insureds through higher premiums, etc, etc. Nothing Obama promised about the law is true...nothing!

  • Report this Comment On April 10, 2013, at 3:35 PM, puy wrote:

    so an employer lays off an employee rather than provide necessary healthcare( everybody has to see a Doctor sometime) and our President is the, some pretty stupid people posting here today.....

  • Report this Comment On April 10, 2013, at 3:39 PM, alwaysgrams1 wrote:

    Obamacare is going to collapse under its own weight. We'll see what's left of our current health care system when it does. Sebelious has even admitted it's not so easy to implement.

  • Report this Comment On April 10, 2013, at 3:40 PM, maradel65 wrote:

    I start beliveing that all Starting from, Mr O down to the Congressman are Blind, Deaf and Dumm.

    It is so tangible is is on their face that MEDICAID is absorbing all the money, it is absurd how people is missusing the system, unreal how undocumented and lazy's became leachs of the system. And it is not their fault it is the GOV faulty system. We must WAKE UP AMERICANS and start

    doing now before is too late...

  • Report this Comment On April 10, 2013, at 3:51 PM, MurphyG9 wrote:

    I was working along stupidly at "part time", which means that I was working 39 (sometimes 40) hours per week. Granted I know that my company was working me at the max that I could work without giving me benefits, but at least I was getting hours. Then BAM- obamacare says that if we average 30 hours per week, I must be given benefits. Soooo wonderful solution- I (and the rest of the "part time" people) am only allowed to work 27 hours per week. We are hiring many, many new people to make up the hours that we are no longer allowed to work. Sooooo come 2014, we will be forced to buy insurance or pay the fine all the while only working 27 hours per week. Thank you Redners Warehouse Markets!

  • Report this Comment On April 10, 2013, at 3:54 PM, texwldfire wrote:

    In 2010 when Obamacare was passed, my wife and a bunch ofother medical workes lost their job. They worked in the prison system and they had to increase the spending on all of the inmates who now got full medical care in the system. They used the money for employee pay to fund the extra costs.

  • Report this Comment On April 10, 2013, at 4:05 PM, Maria716 wrote:

    Obamacare has affected my job. As a result, the hospital I worked at lost $20 million dollars this year causing some positions to be eliminated, including mine. Thank you, Mr. President, for helping me lose my job. At least I have an interview for a new one soon.

  • Report this Comment On April 10, 2013, at 4:06 PM, whachamajig71 wrote:

    So let me get this straight. Because employers do not believe their employees deserve access to basic healthcare or, some greedy medical companies do not want to cut into their burgeoning bottom line, this is all Obama's fault? You people have an interesting way of thinking. And these small businesses that can't afford healthcare for their employees, I'm sure they pay them enough to pay their own, right? Selfish, greedy people!! EVERYONE should have the right to basic healthcare, period!!

  • Report this Comment On April 10, 2013, at 4:12 PM, strifle wrote:

    There just making room for other companies to sell medical equipment. It's not like the demand will expire. Thus, recruiting new hires will begin. These companies laying off are cutting their own throats if they don't play the game.

  • Report this Comment On April 10, 2013, at 4:12 PM, whachamajig71 wrote:

    Oh and by the way, if you would actually read the Affordable Healthcare Act, you would find a clause in their for companies that are economically strapped so that people will not have to lose their jobs. Also, those employers that already treat their employees like human beings and provide them with healthcare coverage will see their costs lowered. Don't believe me? Go ask some small business owners that already provide healthcare coverage. This is all a bunch of mumbo jumbo brought to you by corporate America and their greed.

  • Report this Comment On April 10, 2013, at 4:15 PM, curtis856986 wrote:

    at guy, you wrote, "so an employer lays off an employee rather than provide necessary healthcare( everybody has to see a Doctor sometime) and our President is the, some pretty stupid people posting here today....."

    The President is an idiot, and so is everyone who supported him and the ACA, because anyone with a high school diploma could tell that this was going to cost jobs AND hurt the economy, but Obama swore it would do neither...That is what people are stating, and you simply prove my statement above about being idiots with your post.

  • Report this Comment On April 10, 2013, at 4:17 PM, curtis856986 wrote:

    @Wachamajig71, that's strange, because I own a small engineering company, and not only are my costs going up, the premiums are going up for my employees, AND my provider is telling me that my employees will be getting taxed on their healthcare now as well, the triple whammy. So not sure what you are reading or talking about.

  • Report this Comment On April 10, 2013, at 4:20 PM, andreasjva wrote:

    whacham... it's the ignorance of people like you that is destroying this country. I won't try to explain anything rational to you, because you're too far gone to have a rational conversation. Everyone who owns a business is evil in your view, and our taxes should be increased so the government can provide more benefits to itself, and the inept. If it were up to you, everyone in the private sector would make the exact same amount of money. All pay and benefits would be created equal. It would sorta be like communism, with a touch a socialism.

  • Report this Comment On April 10, 2013, at 4:22 PM, andreasjva wrote:

    @curtis... Wachamajig71 he she has no idea that they're saying. You'd be better off debating a toaster oven.

  • Report this Comment On April 10, 2013, at 4:26 PM, Makikijoe wrote:

    This article is just another Motley Fool conservative business interests attempt to smear the Presdient and the Democrats.

    When the Repugnant-cans occupied the White House and had control of Congress during the first years of George W. Bush's time in office, the Repugs did NOTHING to get millions of more Americans covered by health care insurance.

    But when the Dems got control of both the Congress and the White House and actually DID something signifigant about helping millions to get coverage, the Repugnancans threw a hiissy fit.

    Why ?

    Because it wasn't THEIR plan !

    And because it would mean some raising of taxes, particularly on those who are more well off.

    Well, he-ll-oo-o ?

    Of course it's going to cost some money.

    You don't bring in an extra 30 million more people into the "medically insured" category without spending some money to do it.

    Health care should be a birthright for all Americans.

    It is already a birthright for people in most other developed countries.

    Canadian and British people look on us with amazement !

    They don't understand why we are having so much dispute about this. Especially when their own single payer system covers everybody and, generally speaking, works rather well.

    And they devote a SMALLER percentage of their economy to health care costs. How ?

    It's easy.

    Less bureaucracy and less fraud. Our "fee for service" system actually encourages over treatment and outright fraud.

    If it means we must pay a more in taxes to get closer to our goal of universal coverage, then so be it.

    Employers can pass on increased costs to their customers. They always do. And if they choose to drop their employees from medical coverage, the companies should then lose any and all tax deductions that businesses are normally allowed !

  • Report this Comment On April 10, 2013, at 4:27 PM, snuks wrote:

    And all of the experts who say that obamacare will not cost us jobs are Democrat. Any common sensed person can see how much damage this plan will do. Not only will employers cut hours, lay people off, but the people whose hours are cut down to part-time will still be paying tremendous tax increases and won't be able to afford to work.

    Bottom line folks; this is an outright disaster for America. But then again this is exactly what Obama is doing, he is purposely running this country into the ground so we can all bow down to him. What a puke.

  • Report this Comment On April 10, 2013, at 4:29 PM, vanishingpoint1 wrote:

    I and almost 100 others lost their jobs at a compnay I had worked at for 8 years. The reason? New taxes, levy's and fines intiated by ObamaCare. Thanks fools for voting this idiot in FOR A SECOND TIME! How can Americans really be that STUPID!

  • Report this Comment On April 10, 2013, at 4:42 PM, losttrucker wrote:

    and most of those 30 millions you quote..where are they??i have yet to work a job that didn't have some kind of heath plan ..sounds a whole like they are out of work..or not here legally..about the only way you can get those numbers..and guess what??..myself..i think you have to show you are it the tax payers who are picking up the not unreasonable to ask that ..your medical rights have always been cover a phone phone sometime and look at all the clinic' state fed..and no hosptail will turn you away if you are truely sick or hurt..but far to many go there for some of the silliess stuff

  • Report this Comment On April 10, 2013, at 4:42 PM, doco177 wrote:

    1. Millions are and will lose the insurance Obama promised they could keep. Because ObamaCare forces employers to offer expensive Cadillac plans but also offers the option of paying a fine for not providing health insurance that can be cheaper than providing it, between seven and twenty million Americans are likely to lose their health insurance coverage according to the Congressional Budget Office. The original estimate was closer to four million.

    2. The cost of healthcare premiums is about to further skyrocket. Premium costs have already exploded, but that is a slow-motion explosion. In the near future, we could see costs double or worse. Naturally, these costs will hit an already burdened middle class hardest.

    3. Lost jobs. Lost jobs.

    The Federal Reserve's March beige book on economic activity noted that businesses "cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff."

    Meanwhile, human resources consulting firm Adecco found that half of the small businesses it surveyed in January either plan to cut their workforce, not hire new workers, or shift to part-time or temporary help because of ObamaCare.

    4. Potential doctor shortages that will mean rationing: The healthcare industry is already a bureaucratic quagmire. ObamaCare is about to add steroids. As the profession becomes tyrannized by government, the talented people currently practicing medicine plan to get out sooner than expected. Who knows how many will choose not to get in.

    Doctor shortages are what lead to the nightmare known as rationed care. Here's an unsettling example already being practiced.

    5. Somewhere around $800 billion in tax increases will hit America's middle class. This added burden will not only further oppress a middle class already reeling from a drop in wages over the last few years, but could damage the overall economy.

    6. Inflation, the cruelest tax on the poor. When businesses get socked with added costs brought about by higher taxes and burdensome government mandates, they pass those cost along to the consumer in the form of higher prices.

    7. Added bureaucracy. Even those Obama lapdogs over at the Washington Post's Wonk Blog are admitting that applying for health care is about to get more burdensome than the byzantine paperwork involved in buying a home.

    8. To cut costs or to avoid having to provide insurance, workers on the economic margins are already losing hours, which means a lower paycheck. There are a million sad stories in ObamaVille; here are just a few of them.

    9. ObamaCare is projected to add $6.2 TRILLION to a deficit the GAO has already declared "unsustainable." That's "trillion" with a "t".

    10. More taxes than currently estimated are likely to hit because of situations like this one.

    Three years ago, Obama, Democrats, and his media lied to us about cutting the cost of health care, being able to keep our insurance, and not taxing the middle class.

    Today, those lies and what ObamaCare is and will do to the working and middle class are the biggest untold story in America.

  • Report this Comment On April 10, 2013, at 4:44 PM, losttrucker wrote:

    and in this day and age ..for most ..there is no way to past on the cost one has the money as thier hours have been cut

    ..that has got to be the dumbest thinking i have ever heard..if hrs are being cut..hello ..less money

  • Report this Comment On April 10, 2013, at 5:04 PM, bugmenot wrote:

    Obama bin Laden has hurt the US economy more than Osama bin Laden could have hoped for. The media is still hiding Obama's massive failures and his polarization of America. Assad, Mubarak, Morsi, Gadaffi, Obama ....

  • Report this Comment On April 10, 2013, at 5:27 PM, MsAbby wrote:

    107 of my employees are loosing their jobs. It's not just Obamacare, though that is the largest portion, it's regulations (mostly government reporting) and taxation.

    I no longer feel like I want to work for a government that support those that do nothing to contribute, rewards laziness and demeans producers. I choose to shut my doors until there is some sense back in this country. I refuse to be a government slave so people can sit on their lazy butts and collect the fruits of my labor.

  • Report this Comment On April 10, 2013, at 5:29 PM, MsAbby wrote:

    Workers who have lost their health care benefits are busy trying to sign up for state health care exchanges. (There are Internet sites available if your state has agreed to sign up to Obamacare).

    However, when these American workers, soon to be without employee provided health care, go to the Health Exchange to sign up, they are finding they are not qualified! It seems that during the signup process, applicants are required to fill in various income and benefit data, which then flows over to IRS computers who then are to spit out what your premium costs will be and how much federal tax credits you'll receive in order to receive subsidies to help you afford health care premiums that are as much as 30% more than you were paying under your employer’s plan!

  • Report this Comment On April 10, 2013, at 5:33 PM, Dadx7 wrote:

    I just became eligable for Medicare this month. I need to see a dermitoligist. My eligibility for my former health care ended when I became eligable for Medicare so I figured what the heck I'll just book and appointment with the doctor I was seeing. Well guess what, he DOES NOT accept Medicare. I called 7 others in my area and only one takes Medicare. That one got the lowest "points" based on patient surveys. I'm screwed.

  • Report this Comment On April 10, 2013, at 5:50 PM, gulfcoastrebel wrote:

    I would like to comment on another "Obamacare" article in Fool. The writer said the ACA would fail because there would be too much demand for medical providers. Now think about this: Everybody gets medical care either way. It might be at the ER, at life's end. But they are getting care. The ACA is only about how we pay for it, and who pays. The number of patients is the same. So how does it cause "failure" long-term if they go to the doctor instead of the ER? I believe the ER is more expensive, requires more medical service than a doctor visit. At least is shows up on my bill that way. There might be a period of adjustment as specialist become generalists. But "failure"?

  • Report this Comment On April 10, 2013, at 5:57 PM, cityperson wrote:

    Just like Obama's budget adds almost a trillion dollars more in taxes. But not fear he is looking out for the American worker. But, some will believe him and his liberal gang. We are in good hands. ha

  • Report this Comment On April 10, 2013, at 6:01 PM, kanina wrote:

    You better be able to show proof of insurance next year when you do your taxes. My tax man told me they will ask for proof and if you don't have insurance the first year you will be charged $500.00, the year after that it goes to $1,000.00.

  • Report this Comment On April 10, 2013, at 6:14 PM, patriots38 wrote:

    I think the whole healthcare system is wrong, because Doctors keep treating patients with some expensive medicines and no cure finally. secondly therapeutic duplication in patient profile is a waste of money. People go to prison and their Medicaid is still good and they keep smoking and drinking and get the prescriptions for Spiriva, Advair , think how much burden on taxpayer Americans.

  • Report this Comment On April 10, 2013, at 6:26 PM, Mike321973 wrote:

    My hours were recently cut from 35 to 25 so that the company could avoid paying for Obamacare at a 30 hour work week. Sad thing is that I am type 1 diabetic and have to pay out of pocket for everything with no insurance. My job is also a 40 mile commute, so my check goes toward student loans, gas, diabetes supplies, and the rest I'm defaulting on. Life is great.

  • Report this Comment On April 10, 2013, at 8:24 PM, doggone451 wrote:

    I can tell you exactly what is going to happen, My 40 employees have seen their contribution to healthcare costs go up year after year as the insurance companies and hospitals rip us off of our income. Obamacare is nearly up and running with a insurance exchange in my area and when it does my costs will go down. Thank Goodness for Obama.maybe just maybe because of him some small businesses may survive the great healthcare rip off going on in this country.

  • Report this Comment On April 10, 2013, at 10:43 PM, colin112 wrote:

    If it works and lowers costs, fine. If not..... crucifixion!

  • Report this Comment On April 10, 2013, at 11:42 PM, ferdiefor wrote:

    I just assisted a client of mine who is a medical equipment maker to work thru an 8% workforce layoff.

    The medical device tax simply cannot be passed on to customers in this weakened economic environment. Unfortunately, liberal democrats are finally going to have to accept the consequences of implementing taxes on the so-called rich medical equipment makers.... it is the working person that suffers; not the supposed rich company.

    How many more times must the little guy take it in the shorts because of liberal dreams of utopia and a perfect world and a more supposedly fair world?

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2354206, ~/Articles/ArticleHandler.aspx, 9/30/2016 1:30:21 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,328.53 185.08 1.02%
S&P 500 2,169.00 17.87 0.83%
NASD 5,314.83 45.67 0.87%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 1:15 PM
ABT $42.16 Up +0.72 +1.74%
Abbott Laboratorie… CAPS Rating: *****
BSX $23.67 Up +0.37 +1.59%
Boston Scientific CAPS Rating: ***
MDT $85.99 Up +0.59 +0.69%
Medtronic CAPS Rating: *****
RHI $37.79 Up +0.77 +2.08%
Robert Half Intern… CAPS Rating: *****
SYK $116.32 Up +0.62 +0.54%
Stryker CAPS Rating: *****