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IMA: Business Hiring Plans Won’t be Impacted Much by Affordable Care Act

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May 7th 2015
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A recent survey from the Institute of Management Accountants (IMA) found that the impact of the Affordable Care Act on business hiring decisions for the coming year is expected to be minimal.

Of the 170 IMA members who participated in the survey, 83 percent said they expect the Affordable Care Act to have little or no impact on their hiring decisions, while 17 percent believe the healthcare law will negatively impact their hiring plans, according to the report, The Impact of the Affordable Care Act: An IMA Survey.

Respondents from companies with more than 10,000 full-time employees indicated that the Affordable Care Act would either have minimal negative impact on their number of employees or lead to an increase. The biggest squeeze appears to be for small to mid-sized firms. Approximately 19 percent of respondents at firms with 51 to 1,000 full-time workers said they expect a decrease in employees.

“Paradoxically, respondents at firms not subject to the provisions of the Affordable Care Act are more pessimistic about the impact the Act will have on the number of their employees than those from companies subject to the legislation,” wrote Raef Lawson, PhD, CMA, CPA, vice president of research and policy and professor-in-residence for the IMA, and Kip Krumwiede, PhD, CMA, CPA, director of research for the IMA, the authors of the study.

“The reason for this is unclear; perhaps they are concerned about the Affordable Care Act’s impact on the general economy, or perhaps it is due to a general concern regarding the burden of compliance with additional government regulation,” they continued. “Also interesting is that 9 percent of respondents at firms subject to the Affordable Care Act believe it will lead to an increase in the number of employees.”

The healthcare law doesn’t seem to be impacting company business plans much either, according to the survey. Ninety percent of respondents said uncertainty about the Affordable Care Act would have little to no effect on plans to implement a new project or product in the next year.

“Uncertainty regarding the Affordable Care Act is largely affecting only smaller firms,” Lawson and Krumwiede wrote. “None of the respondents at firms with more than 500 employees reported a significant impact on their plans.”

Other key survey results included:

  • Fifty-seven percent expect some negative impact on the company’s profitability, with 31 percent predicting a decrease of no more than 2 percent profits.
  • Fifty-three percent of those subject to provisions of the Affordable Care Act said complying with the healthcare law has been difficult. Only 11 percent said it has been easy.

“While the Affordable Care Act continues to be a very controversial piece of legislation, we find that strong concerns about higher unemployment due to the Affordable Care Act do not seem to be warranted,” Lawson and Krumwiede concluded. “Our findings show that the impact on hiring decisions for the coming year, when the employer mandate/penalty kicks in, is expected to be minimal. Firms with 51 to 1,000 full-time employees appear to be most at risk. We do find that more than half of those surveyed expect profits to decrease, but generally only by 5 percent or less – probably because of plans to shift the extra burden to employees and customers or to cut other spending. Finally, the Affordable Care Act does not appear to have caused most companies to change their business plans.”

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