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Tuesday, December 4, 2012

Restaurant Owners Offer Mixed Opinions On Affordable Care Act

There are an estimated four million people employed in the fast food industry alone. The majority of workers in the food industry are part-time. Although the Affordable Care Act does not require restaurant owners to provide affordable health insurance to part-time employees, a combination of employees working 120 hours per month, which is about 30 hours per week, counts as one employee. Many restaurant owners are now scrambling to educate themselves on all the requirements of the new health care law because in 2014 employers with 50 or more full-time employees will be required to offer those employees health care benefits.

In general, restaurants do not typically offer health care insurance, and restaurant franchise owners are not generally required by the parent company to provide health coverage. But some food chains have offered health plans for years, including the top ten largest food chains in the country. McDonald's, for example, offers different plan levels, including the most affordable "mini-med" plan. Similar programs are offered by Burger King and Dunkin Donuts.

Starbucks also has health insurance plans for employees who work 20 hours or more a week. In fact, all their employees in the U.S. working at least 20 hours a week, including corporate, store and plant employees, are offered health insurance. Starbucks has been doing this since 1988. Many other restaurant owners agree that it is their responsibility to take care of their employees. Some feel it also attracts better employees and provides more motivation to stay with the company.

But the National Restaurant Association and the National Council of Chain Restaurants continue to lobby against Obamacare. The reason they give is cost. Scott DeFife, executive vice president of policy and government affairs for the National Restaurant Association (NRA) states, “Operators are concerned that this plan will impose excessive costs and regulatory burdens that threaten their very business.”

The most controversial outspokenness against Obamacare was probably the comment delivered by John Schnatter, CEO of Papa John's Pizza, immediately following the election. He stated that the health care law would increase his business costs between $5 and $8 million annually and possibly result in a cut in employee hours, and also raise the price of pizza 10 to 14 cents each to "protect shareholders' best interest." The comment received a strong negative reaction on the social media in light of the fact that Papa John's plans to open 1,500 more restaurants over the next six years.

Regardless how restaurant owners view the subject of providing their employees affordable health insurance, the bottom line is that the law is the law. On January 1. 2014, the Patient Protection and Affordable Health Care Act will be in effect. Employers with 50 or more full-time employees will be required to offer affordable (not costing more than 9.5 percent of household income) health care to their workers. Obamacare is here to stay.
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