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Aetna CEO Mark Bertolini Threatens Layoffs If Fiscal Cliff Deal Fails [UPDATE]

CEO Threatens Layoffs If There's No Budget Deal
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The CEO of the country's third-largest health insurer is threatening layoffs if the government doesn't reach a deficit reduction deal in the coming weeks.

"The American people are going to suffer because we'll lay them off -- because we know how to respond to these kinds of situations," Aetna CEO Mark Bertolini warned on Monday at a Wall Street Journal event, according to Marketwatch. Bertolini said that if the U.S. does not avert the fiscal cliff with a long-term deficit reduction plan, he and other CEOs will have no other choice.

Debt deal or not, Aetna will likely have to restructure its business in the wake of its recent merger agreement with Coventry Health Care. That may mean layoffs, even as the company adjusts to an influx of new customers thanks to the implementation of Obamacare.

Obamacare is estimated to expand the health insurance market by 16 million Americans by 2019, and it requires health insurers to not turn away the sick. As a result, both costs and revenues at Aetna are likely to rise, and the company may need to cut some workers and hire others to deal with these changes.

Last week, Bertolini pushed the same message on Bloomberg News, telling the news outlet that he is considering layoffs or a hiring freeze if the government does not avoid the fiscal cliff.

Bertolini has been an outspoken proponent of slashing government debt with cuts to the social safety net. He recently signed a letter from more than 80 CEOs demanding a deficit reduction deal that would include cuts to Medicare and Medicaid, Social Security "reform" (that is, probably cuts) and higher taxes. He also is on the CEO council of the Campaign to Fix the Debt, an organization demanding a deficit reduction deal soon.

Cutting the budget too quickly can have negative economic consequences, according to some economists. Three hundred and fifty economists signed a letter on Wednesday warning that premature austerity can increase unemployment, stymie economic growth and ultimately increase the deficit.

CORRECTION: An earlier version of this story cited data from financial website NerdWallet that showed Aetna paid a negative tax rate. That was incorrect. This article has been updated to reflect that Nerdwallet now says that Aetna paid a 30 percent tax rate last year, and Aetna says it paid a 35 percent tax rate. Nerdwallet corrected its numbers Thursday evening.

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Before You Go

10 Ways You've Already Fallen Off The Fiscal Cliff
Residential Energy-Efficiency Credits(01 of10)
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No tax breaks for being green in 2012. Homeowner investments in energy-efficient double-pane windows or high-efficiency refrigerators, don't get any tax benefit. More than 43.5 million Americans have filed and received this benefit, with an average reduction in tax liability of $765.84, according to H&R Block. (credit:Shutterstock)
Mortgage Insurance Premiums(02 of10)
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Bad news for homeowners: They cannot write off mortgage insurance premiums on 2012 tax returns. Congress can act to reauthorize these deductions retroactively to Jan. 1, 2012, and extend them through the end of 2013, but that would cost the government $1.3 billion over the next decade, the Los Angeles Times reports. (credit:AP)
Adoption Credit(03 of10)
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Taxpayers who have out-of-pocket adoption expenses or who adopted a child with special needs can only claim the adoption credit to the extent of their tax liability. While the portion of the credit not taken into account in 2012, up to $12,650 per child, is carried forward to future years, the benefit is no longer fully refundable, according to tax experts. (credit:Shutterstock)
Alternative Minimum Tax(04 of10)
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If the alternative minimum tax legislation is not retroactively patched for 2012, current law could result in an increased tax liability for up to 34 million Americans. According to a study by the Tax Institute at H&R Block, an average family making $85,000 with children in college could see their tax liability soar from a $1,056 refund to owing $1,400. (credit:Shutterstock)
American Opportunity Tax Credit(05 of10)
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Tuition bills will be higher starting on Jan. 1 because families will lose the $2,500 American Opportunity Tax Credit, which ends in 2012 unless Congress takes action. More than 2.4 million Americans claimed this deduction in 2009, resulting in a combined decrease in taxable income of $5.4 billion, according to tax experts. (credit:Shutterstock)
Payroll Tax Credit(06 of10)
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Paychecks will be smaller starting Jan. 1, 2013. An American making $50,000, for example, will lose $80 in monthly pay after the credit ends. The temporary credit also has lowered the amount workers contributed to Social Security by 2 percent. (credit:Shutterstock)
Educator Expense Deduction(07 of10)
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Teachers lose their $250 maximum deduction on expenses related to buying school supplies. This credit expired at the end of 2011, and teachers won't be able to claim this benefit on their 2012 taxes unless Congress takes action. In 2009, more than 3.8 million teachers claimed this benefit for a combined deduction of $9.7 billion, according to H&R Block. (credit:AP)
Sales Tax As An Itemized Deduction(08 of10)
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Taxpayers will no longer have the option of claiming an itemized deduction for state sales tax in lieu of state income tax. This expiration will have a greater impact on taxpayers who reside in a state with sales tax, but no income tax, including Alaska, Florida, Texas, Nevada, Washington, South Dakota, and Wyoming. (credit:AP)
IRA Retirement Funds(09 of10)
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Taxpayers over age 70½ no longer have the option of directing their income from an IRA distribution to a charitable organization. Starting this year, older taxpayers must include the distribution in income and claim a charitable deduction, resulting in a potentially higher tax bracket and a need to itemize instead of claiming the standard deduction, according to H&R Block. (credit:Shutterstock)
Later refunds(10 of10)
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As if losing all those tax credits was not bad enough, the earliest date to file a 2012 tax return electronically has moved back to Jan. 22, 2013. As the IRS has indicated that refunds could take as long as 21 days to process this year, a refund in January to cover Christmas credit card payments, winter heating bills, or rent is unlikely. (credit:AP)
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