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Will Obamacare Turn America Into a Nation of Part-Time Workers?

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By Sean Williams, The Motley Fool

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In eight months and a hair over one week the Patient Protection and Affordable Care Act, also known as Obamacare, will go into full effect. The PPACA is a sweeping reform of our current health-care system aimed squarely at keeping premiums from skyrocketing; holding insurance companies accountable for the premiums they bring in by insuring they spend at least 80% of those dollars on patient care; and mandating that individuals and large businesses take responsibility for themselves and their employees by carrying health insurance or providing group coverage.

President Obama signing the PPACA into law. Source: White House on Flickr. 

Obamacare: Friend or foe?
Earlier this month, I decided to take a walk on both sides of the aisle to point out the benefits and the drawbacks of Obamacare. Make no mistake about it — there are benefits and there are weaknesses to the bill. But perhaps no aspect of Obamacare works out as more controversial than the insurance mandate.

On a personal level, the insurance mandate is pretty clear. By law you are required to carry insurance — buy it or face a tax penalty, which will incrementally increase to 2.5% of your adjusted gross income by 2016. Looking at it from a business perspective is where things get a lot trickier.

For businesses with fewer than 50 employees, no such rules are in place to require them to provide health coverage to employees. Where things go a bit haywire is when you get into larger corporations. Large corporations, under the PPACA, will be required to provide insurance to full-time employees that meet the basic minimum standards under the new law. Employers aren’t required to pay for any of a full-time employees’ insurance; however, they will be penalized between $2,000 and $3,000 per employee for each situation where health costs wind up exceeding 9.5% of that employee’s income. If these businesses choose not to offer health insurance whatsoever, they will face a stiff $2,000 fine per employee.  

As you might imagine, the reaction among the nation’s largest businesses has been mixed in response to the passing and upholding of the PPACA by the Supreme Court.

Now hiring, part-time only
In one corner, we have businesses across a myriad of sectors that have made no qualms about reducing their headcount or rolling back their employees’ hours in order to reduce their exposure or skirt the system entirely. Reconstructive, medical, and surgical device maker Stryker made the very unpopular decision to eliminate 5% of its workforce in November 2011 in order to reduce its expenses by more than $100 million annually because of the now-in-effect 2.3% medical device excise tax. Yet an even scarier scenario for America’s workforce exists that isn’t tied to layoffs or even outsourcing — it’s the threat of being bumped into the part-time category.

Part-time workers fall into the gray area of the PPACA in that only full-time employees of

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Why 2012's Top Charitable Donors Should Give Even More This Year

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By Dan Caplinger, The Motley Fool

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Charitable giving is an important part of American society, and many corporate leaders, who’ve earned their wealth through the stock market or other investments, have gone on to become some of the most generous individuals in the world. Given the concentration of wealth that most of these donors have in a single stock, however, their capacity to give can change markedly from year to year.

With that in mind, let’s take a look at the five most generous donors of last year according to the Chronicle of Philanthropy. By looking not only at how much they gave in 2012, but also how the companies they’re affiliated with have performed so far this year, we should be able to tell whether they’ll be in a position to make even more generous gifts in 2013 and beyond.

Donor

Company/Source of Wealth

Amount Given or Pledged in 2012

Warren Buffett

Berkshire Hathaway

$3.1 billion

Mark Zuckerberg & Priscilla Chan

Facebook

$498.8 million

John & Laura Arnold

Centaurus Energy hedge fund

$423.4 million

Paul Allen

Microsoft

$309.1 million

Sergey Brin & Anne Wojcicki

Google

$222.9 million

Source: Chronicle of Philanthropy.

These donors have all earned reputations for their philanthropic efforts, with most of them having a long history of donations. Warren Buffett has been making regular donations of Berkshire stock to the Gates Foundation, founded by Microsoft co-founder Bill Gates, for years. Paul Allen, Microsoft’s other co-founder, made the bulk of his donations last year toward advancing brain research, with the goal of solving the mysteries of Alzheimer’s and other neurological conditions. Sergey Brin, co-founder of Google, has been giving substantial sums toward research into Parkinson’s disease for years, with a family history of the disease making the cause hit close to home for Brin. And for John Arnold, who worked as a trader for Enron before going out on his own to start a hedge fund, the foundation he and his wife established aims at improvements in a number of key areas, including the criminal justice, education, and pension systems.

Berkshire Hathaway CEO Warren Buffett with President Barack Obama. Source: White House.

Meanwhile, Mark Zuckerberg‘s wealth is more recent, but he upped the ante last year after a $100 million gift to the Newark, N.J. public school system in 2010. Zuckerberg and his wife committed nearly half a billion dollars last year toward a foundation aimed at health and educational efforts.

Can they give more?
Thanks to recent gains in the stock market, most of the public companies tied to these donors’ fortunes have done fairly well:

Total Return Price data by YCharts.

Berkshire has seen the best return of the four stocks, as its core insurance business has produced good results, and its portfolio of well-known stocks and wholly owned subsidiaries have also performed well. <a target=_blank

From: http://www.dailyfinance.com/2013/04/12/why-2012s-biggest-charitable-donors-should-give-ev/

Business, Finance, Occupation & Industry

President Obama Unveils a Plan to Smoke Big Tobacco

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By Sean Williams, The Motley Fool

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It was a good two months late, but yesterday both political parties and the American people got to read the fine print of President Barack Obama‘s proposed 2014 federal budget.

As you might expect, quite a few Democrats supported the main points of the budget, and House Republicans in almost every respect shunned the president’s outlined measures, which included higher taxes for upper-income earners and some spending cuts as well. Ultimately, there wasn’t much new and the bipartisan bickering that ensued has become a norm on Wall Street for the past couple of years.

82 billion reasons to quit
However, what did stick out like a sore thumb was Obama‘s budget proposal that entailed raising the federal tax on cigarettes from $1.01 per pack to $1.95 – a $0.94 increase! According to calculations associated with the president’s budget proposal, the increase would raise $78 billion over the next decade, which would be enough to fund a universal preschool program for children.

Source: White House. 

In addition, it’s estimated that $1 billion in long-term health care costs would be saved from a reduction in smoking caused by the increase in prices, and $3 billion would be added to the economy thanks to a healthier labor force. Added together, Obama‘s plan to smoke the tobacco industry — the irony here is that the president was once a smoker himself — could result in an $82 billion favorable swing over the next decade.  

While the magnitude of the tax provision astounded me, I’m not actually surprised to see a cigarette tax hike included in the president’s budget proposal with the implementation of the Patient Protection and Affordable Care Act, known as Obamacare, right around the corner. The president understands the costs associated with implementing a wave of health reform, and also understands that minimizing as many long-term health problems as possible (i.e., getting young people to stop smoking) will help his health care reform bill achieve success.

No ifs, ands, or butts about it!
Big tobacco companies, on the other hand, definitely didn’t take kindly to the president’s proposal, which represents the latest threat in a series of events meant to increase the public’s awareness of the dangers of smoking.

Last year, the Centers for Disease Control and Prevention took aim at the tobacco industry with a $54 million, three-month long marketing blitz advertising the dangers of cigarette smoking, while the Food and Drug Administration exerted its force on the industry by requiring tobacco producers to disclose the quantities of 20 known harmful chemicals found in cigarettes.

Before even the CDC and FDA got involved, individual cities and locales, such as New York, got involved by banning cigarette smoking inside restaurants and in largely public places like plazas and beaches.

The weight of these measures on domestic tobacco companies is really going to start taking its toll. Even if Obama‘s budget proposal fails to pass through Congress — and every political think

From: http://www.dailyfinance.com/2013/04/11/president-obama-unveils-a-plan-to-smoke-big-tobacc/