CFOs cite layoffs as one way of offsetting healthcare costs next year

Due to the Patient Protection and Affordable Care Act, a majority of CFOs said they expect their labor costs to rise next year, with some financial leaders saying their companies plan to reduce their workforce to handle the increasing costs, according to the Bank of America Merrill Lynch 2015 CFO Outlook.

Of the 602 financial leaders surveyed, 69 percent said they expect their labor costs to increase next year due to the PPACA, and below are the steps those companies are taking to help offset the long-term healthcare costs.

  • Passing along the costs to employees — 79 percent
  • Implementing preventative healthcare and wellness programs — 66 percent
  • Cutting spending in other areas of their business — 61 percent
  • Offering employees health savings accounts — 59 percent
  • Raising prices on their products or services — 50 percent
  • Accepting lower profit margins — 38 percent
  • Making changes in retirement plan services — 17 percent
  • Reducing workforce — 12 percent

In addition, 3 percent of CFOs said their companies would not be offering insurance and would pay the penalty for non-compliance.

The CFOs were also asked to evaluate factors based on the potential impact they could have on the economy. A majority (56 percent) of CFOs cited healthcare costs as the factor they believed could affect the economy the most next year, down from 67 percent last year. The second most widely cited factor was the effectiveness of the U.S. government, with 47 percent of CFOs citing it as the factor that could affect the economy the most in 2015.

The CFOs surveyed were from companies across the country with annual revenues of $24 million to $2 billion.

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