Top of mind: Health care headachesTop of mind: Health care headaches

The following story is part of “Top of Mind,” a special report covering today’s largest concerns among the restaurant operator community. This report was created in anticipation of MUFSO, taking place Sept. 30-Oct. 2, where hundreds of operators gather to share ideas and best practices. Find MUFSO coverage at NRN at the Show.


Members of the foodservice industry have long acknowledged the need for more reasonably priced health insurance, but many insist the government’s looming Patient Protection and Affordable Care Act will cause widespread damage to restaurant businesses.


The PPACA, which was signed into law in 2010 and largely takes effect in 2014, places an unwieldy financial burden on individual employers, critics maintain.


“The health care law is just devastating to our members,” said Judith Thorman, senior vice president of government relations and public policy for the International Franchise Association in Washington, D.C. “[We estimate] the loss of over 3.2 million jobs among our membership because of the law. The cost of an employer providing health care is going to be tremendous.” 


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One of the chief complaints the IFA has with the law is that its cutoff threshold — the PPACA applies to businesses with 50 or more employees — is too low. As a result, it unfairly targets too many small-business owners, including franchisees, Thorman said.


The IFA also has issues with the PPACA’s definition of a full-time employee, which it classifies as someone who works at least 30 hours each week, a number that is seven to 10 hours shorter than current industry standards, she said.


“It’s very rigid,” she said of the law. “There’s not much flexibility for employers.”


Neil Trautwein, health care lobbyist for the National Retail Federation, which encompasses the National Council of Chain Restaurants, said retail businesses and restaurants are labor intensive; as a result, the health care law will have unforeseen implications.


“It is an extraordinarily complex law,” he said. “It will shift the way we manage employees. … It will discourage growth over that 50-employee threshold. It’s particularly an issue for franchise restaurants.


“It’s quite the regulatory nightmare for restaurateurs,” he said, adding that even if operators provide their employees with health benefits, business owners can still be penalized if the level of coverage does not meet the law’s requirements.


Scott DeFife, executive vice president of policy and government affairs for the National Restaurant Association in Washington, said that because restaurant operators are not exactly sure how the health care law will be implemented — if at all — many are having trouble planning for the next fiscal year.


“Some people report that they are delaying expansion decisions,” he said.


The PPACA also requires chain restaurants to display nutritional data for menu items, which the IFA opposes, Thorman said. The cost of replacing menu boards and menus can be significant for restaurant operators, Thorman said, adding that’s something law makers may not have taken into account.


“Part of it is how you display calories,” she said. “The law, as it’s established, says you have to put it on a menu board.” But, she added, the law doesn’t take into account that some restaurants have different ways of displaying their offerings, such as printed menus or chalkboards. 


Besides, she said, it takes a lot of work to actually determine how many calories are in each menu item. A long implementation time that would allow restaurateurs to budget their time and money to accommodate the new requirements will be a necessity, she said.


“We would just like to see a standard that is cost effective that would allow for flexibility in implementation,” Thorman said.


This special report was originally published in the Sept. 17 issue of Nation’s Restaurant News. Subscribe here.

Contact Erin Dostal at [email protected]
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