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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.
What is becoming clear is the high cost associated with coverage, said Robyn Piper, a health and welfare consultant with Piper Jordan in San Diego. Her large restaurant-chain clients gradually are moving from being overwhelmed by the details in the 906-page law to better understanding the substantial costs and burdens of compliance.
“It’s been especially hard on HR and benefits departments — staffs that were not left unscathed by the recession,” Piper said. “There are a lot of days where you see foreheads on the table as they try to get their heads around these big numbers — and they are heart-palpitating numbers.”
Employers should now be evaluating the complexion of their workforce. Such efforts have led to some high-profile headlines about plans to cut employees hours, but the exercise should not be taken lightly.
With the help of benefits consultants, lawyers or accountants, employers should conduct government-mandated assessments, or “polling periods,” looking at stretches of time spanning 60, 90, 120 days or longer to determine the number of full-time and part-time workers on their payrolls.
As 2014 draws nearer, operators have less time to poll and make accurate calculations.
Knowing which positions require full- or part-time employees is critical to assessing a company’s obligation, Piper said.
“That assessment potentially narrows down who insurance benefits will be extended to,” Piper said. “It’s especially important for companies that might not have 50 FTEs when all those part-time hours are added up.”
While the industry’s notoriously high turnover rates could complicate polling, Piper said such evaluations would at least provide data that will help companies decide whether every position is needed.
The assessments also are shedding light on the potentially steep cost of insuring workers.
According to Bower, Popeyes’ monthly contribution will be in the neighborhood of $200 per eligible employee.
Craig Dunaway, president of Cincinnati-based Penn Station East Coast Subs, said the 252-unit chain will pay “about $2 per hour per [eligible] employee, which, spread across a year, is about $3,000 per employee out of pocket for us,” he said. “That’s a cost that makes us ask what positions we might be able to get rid of.”