Fifty-nine percent of U.S. chief financial officers expect to increase employee co-pays because of Obamacare, according to the latest quarterly survey conducted by Financial Executives International and Baruch College's Zicklin School of Business.
The 114 U.S. corporate CFOs surveyed had Obamacare-related health care cost increases averaging 5 percent in the past six months, the survey said. Forty-four percent expect to reduce the benefits or the quality of their health care packages, and 14 percent report considering changes to their workforce because of Obamacare.
Eighty-eight percent do not have plans to migrate employees or retirees to the Obamacare marketplace or private health insurance exchanges.
“New health care regulations are likely a major cause of U.S. CFOs’ decreased optimism in their business prospects and the U.S. economy, as evidenced by the actions they are continuing to take to offset the costs related to the ACA,” said Marie Hollein, president and CEO of FEI. “Health care, along with the outcome of the debt ceiling, will undoubtedly continue to impact CFOs in the next few months, and will be pivotal to business expectations for 2014.”
According to the survey, the U.S. CFO Optimism index toward financial prospects for their businesses dropped from 70.7 last quarter to 65.1, the lowest position over the past four quarters. The CFO Optimism index for the U.S. economy also dropped from 61.2 last quarter to 56.2.
In gauging the impact of the debt ceiling and the recent government shutdown, 83 percent believe their businesses will be affected more if Congress fails to increase the debt ceiling. Two-thirds of those respondents also believe this will have a larger impact on the U.S. economy as a whole. Sixty-one percent of CFO believe that the U.S. Congress should fund the government for FY 2014 and/or raise the debt ceiling, and only then separately deal with the long-term federal debt and deficit issue; 37 percent disagree.
Staffing and employment were also among the primary factors contributing to the concerns of CFOs. Sixty-five percent are planning to hire additional staff in the next six months, mainly professionals at the entry- and mid-career levels, but 28 percent said they were forced to reduce headcount over the last year.
The most common factors cited by CFOs for reducing headcount were a decline in sales (44 percent) and revised outlook or long-term goals (26 percent). The majority of CFOs think the U.S. unemployment rate will decline slightly to 7.2 percent one year from now. However, the majority are not restructuring their workforce toward just-in-time scheduling or employment practices or relying on a larger percentage of part-time employees.