Businesses make cuts fearing 'Obamacare'

TEMPE, AZ - When the Affordable Healthcare Act or "Obamacare" takes effect, all businesses with employees over 50 will have to offer health coverage to full-time employees.

Red Lobster and Olive Garden restaurants nationwide are cutting back their full-time employees to part-time to avoid having to pay the premiums.

The move may seem a bit premature, considering the employer mandate doesn't take effect until 2014.  

Professor Marjorie Baldwin, with ASU's W.P. Carey School of Business, tells ABC15 that the act will increase labor costs and in turn will likely impact hiring and may create a trend of businesses cutting employees to part-time hours.

"Health care costs are rising," she said.  "How much is because of the Affordable Health Care Act and how much is just the overall trend is difficult to determine."

Small businesses with under 25 employees would benefit since they would be able to receive a federal subsidy that would make offering health care to their employees more affordable.

Individuals who lose their insurance would be eligible to get insurance through a program that states are mandated to develop under the law.