Manufacturers remain optimistic in the Philadelphia region, which includes southern New Jersey, according to the August survey by the Federal Reserve Bank of Philadelphia that also found that the Federal Affordable Care Act is impacting the region's manufacturing workforce.
According to the survey, 18 percent of respondents said the number of workers they employ is lower because of the ACA. The same percentage (18 percent) said the proportion of part-time workers had increased as a result of the law.
The ACAs “employer mandate” requires large employers to offer health plans to full-time workers or else pay penalties, and it does not apply to employers with fewer than 50 workers. In 2015, employers with 100 or more full-time workers will have to offer coverage to 75 percent of their full-timers — that rises to 95 percent in 2016. In 2016, employers with 50 to 99 workers will have to offer health coverage to 95 percent of their full-time workers.
About 3 percent of respondents said they are now employing more workers as a result of the ACA.
“From the comments we received, the ACA is having some effects, as we had expected” said Michael Trebing, senior economic analyst for the Federal Reserve Bank of Philadelphia. He said the results are in line with a regional economic survey earlier this month by the Federal Reserve Bank of New York.
Asked how the ACA was impacting the health coverage they provide their workers, 41 percent said they had not changed their health plans. However the majority, 52 percent, said they had modified their health coverage. Among those who changed their health benefits, 91 percent cited higher deductibles; 88 percent said workers are contributing more of the cost of their coverage; and 77 percent reported higher out-of-pocket maximums for health plan members.
Trebing said the 70 firms participating in the survey employ 250 workers on average, and on average about 5 percent of those workers are part-timers.
The survey found the overall economic outlook in the region remains positive. Trebing said the overall expectations for the next six months remain optimistic, and the survey’s broadest six month indicator improved from its July reading has now improved for four straight months.
Nearly 37 percent of the firms said they expect growth in employment over the next six months, while 12 percent expect employment reductions.
Trebling said the broad economic indicators that the survey looks at “were all positive this month, signifying expansion” of the economy is likely.
The survey found that indicators for new orders, shipments and employment, while positive, fell from their July levels.
Trebling pointed to the moderation of new orders in August, and he said this indicator “although still signifying growth, is something to watch. But in general the numbers are looking pretty good for the region’s manufacturing firms.”
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