By Dr. Susan Berry
The start of the New Year means obamacare tax hikes for many and the countdown to the health reform law’s official inauguration on Jan. 1, 2014.

Twelve months from now, most Americans will face a “tax” via the individual mandate. There will supposedly be new online insurance marketplaces called “exchanges,” and American companies and businesses with at least 50 workers will owe penalties if they don’t cover full-time employees. Oh, and one more thing: Did you know that “full-time” means working at least 30 hours per week?

For American employers, the magic number of “50” will mean the coming year will be spent exploring options to comply with the new regulation while keeping costs down so as not to infringe on profits.

To make things even more difficult, a brand new obamacare regulation, released by the administration last week, requires employers to extend health insurance coverage, as well, to their workers’ children who are under the age of 26.

Interestingly, the new regulation does not require that employees’ spouses be covered, yet another curiosity that suggests an administration that does not recognize the traditional family unit.

Nevertheless, beginning in 2014, employers that do not offer coverage to their “full-time” employees will pay a penalty of $2,000 per worker, per year.

Smaller businesses with at least 50 full-time employees may choose to opt out of providing health insurance completely, since the penalties are less costly than the insurance itself.

Many employers, however, will likely choose to fire some full-time workers and/or drop workers to permanent “part-time” status, in order to be under the magic number of “50” full-timers. In fact, some economists believe that the health reform law will create a high level of competition among part-time workers. In addition, the cuts of entire full-time positions and reductions to part-time will likely produce some significant negative effects.

First, those full-time employees whose positions have been entirely cut will be unemployed and in need of unemployment benefits. Unless you are Nancy Pelosi and believe that unemployment benefits are a great economic stimulus, suffice it to say that more people on unemployment means less economic growth and less tax revenues paid on income.

Those workers reduced to part-time status will obviously have less income and, therefore, be able to spend less, and perhaps not be able to keep their homes. These workers will then also be among the “underemployed,” Americans who never seem to be considered when the unemployment rate is published. As the number of part-timers increases, the unemployment rate stays the same. Funny how that works.
Finally, in the obamacare scheme of things, those who are not insured at work will be insured in the exchanges; that is, if and when the exchanges are set up.

So far, obamacare looks like a long road to nowhere.

About Your Uncle Fester

American. III. Sheepdog. First Responder at Camp Keebler.
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