UPDATE 1-Invacare freezes hiring to counter proposed tax impact

* Says new tax could result in annual impact of $12-$14 mln

* Suspends matching contributions for retirement plan

* Co looking at options to offset impact of tax

Jan 8 (Reuters) - Invacare Corp (IVC.N) said it suspended matching contributions under its 401(k) retirement plan, merit pay increases for management employees and put a freeze on hiring in anticipation of a proposed tax on medical device manufacturers becoming law.

The U.S. Senate and the House of Representatives have passed their versions of healthcare reform and the two chambers must now work out their differences before legislation can be delivered to President Barack Obama for his signature. [ID:nN04252050]

In a regulatory filing, the company said if the U.S. Senate version of the proposed medical device manufacturer tax becomes law, the company will have to begin accruing expense for the new tax in 2010.

The company, which makes products ranging from hospital beds to wheelchairs, estimates the new tax could result in an impact of about $12 million to $14 million annually.

Invacare also said it is evaluating options to offset the impact of the proposed tax, including possible price increases, shifting more production overseas, reducing employee benefits or research and development expenditures.

The company also said it continues to actively lobby members of Congress in an effort to make the proposed legislation less onerous on medical device manufacturers.

Shares of Invacare closed at $25.91 Thursday on the New York Stock Exchange. (Reporting by Jennifer Robin Raj in Bangalore; Editing by Aradhana Aravindan)