Thursday, November 15, 2012

Let's ask a business owner...

how he feels about ObamaCare and what he plans to do in order to comply with the mandate.  He isn't a small business owner because he employs more than 500 people.  In fact there are over 1,200 employees working in the 40 Denny's restaurants and the five Hurricane Grill and Wings eateries that he owns in Florida, Georgia and Virginia.  He says that beginning in 2014, he will add a 5% surcharge to the check of every diner to offset the expense of complying with the requirements of Obamacare.

Since the average check is around $9 at the Denny's locations and $14.50 at the five other places, it will cost diners less than $1 per visit.  But there is a much heavier price that will be paid.  John Metz said he also plans to reduce the work schedule of a large number of employees to less than 30 hours per week to avoid paying a $2,000 fine for not providing them with health insurance.

Currently his cost to provide what are probably pretty good healthcare benefits to 250 of his employees is around $6,000 per year.  With an average of 35 employees per location, paying that fine will run around $70,000 per year per location. 

His choices aren't great. 

1.  Reduce benefits for all employees to get a bare bones plan that would probably run $3,600 per year and give it to all employees. 

2.  Spend (45*$70,000) $3.15 million per year in fines.

3.  Reduce the hours of over 900 employees to less than 30 per week so he won't pay to do either 1 or 2 above.

That's the story as it was told in the media.  But what I can't seem to wrap my head around is, if he's going to cut hours and avoid those fines, and not spend money on insurance, why is there a need for a surcharge on all customer checks?  Seems no one is going to be added to the group of employees covered by the healthcare plan, so where is he being forced to spend any money?

Can someone explain this to me?