What is in this article?:
Operators are struggling to determine whether it makes more sense to provide health coverage or pay the penalties tied to PPACA noncompliance. This article ran in the Dec. 17, 2012, issue of NRN. Subscribe today.
With President Barack Obama’s re-election removing any doubts that the Patient Protection and Affordable Care Act will take effect in 2014, operators are hurriedly hammering out strategies to manage the anticipated cost increases tied to providing employee health care coverage.
Even as employers await regulatory details for several critical aspects of the law, they are grappling with such fundamental questions as what their workforce looks like and whether they are better off paying for coverage or eating penalties tied to noncompliance.
Under the law, companies with 50 or more full-time equivalent, or FTE, workers must provide health insurance options that meet minimum government standards for coverage and affordability. Companies not providing insurance will be fined $2,000 per FTE employee per year, and as much as $3,000 per FTE worker per year should the coverage offered not meet government requirements.
For restaurant operators, deciding how their companies will administer and pay for the new insurance is further complicated by such peculiarities of the industry as its high turnover, numerous part-time workers and a large population of tipped employees.
Because of these peculiarities, even leaders who have worked to understand the PPACA since it became law in 2010 admitted they still don’t fully comprehend its implications — and many pointed to an onerous number of unintended consequences, as well.
“It doesn’t matter how much you know about this; every time I meet with consultants for questions, I learn something I didn’t know before,” said Ralph Bower, president of the U.S. division of Popeyes Louisiana Kitchen.
The Atlanta-based chain with 2,100 units has invested thousands of man-hours and tens of thousands of dollars to research the PPACA and disseminate that information to franchisees.
“We’ve been at this for a little more than a year,” he said. “We’ve had eight meetings with our cross-functional team [of franchisees and corporate staff], plus our HR staff has put a lot of work into this, in addition to their regular jobs. But we’re still not clear on what our response will be.”