Starbucks CEO Schultz bucks Obamacare cuts
He vows to maintain workers' hours and benefits, saying some companies are using the law as an excuse.
If you like your coffee with a shot of support for Obamacare, look no further than Starbucks (SBUX).
While the Affordable Care Act has been vilified by some business leaders who worry about the law's impact on the bottom line, Starbucks chief executive Howard Schultz said his company will maintain workers' hours and benefits as portions of the law goes into effect next year. The provisions covering employer-provided health insurance have been delayed to 2015.
Schultz also implied that businesses cutting benefits are using the law as a pretense to reduce expenses.
"Other companies have announced that they won't provide coverage for spouses; others are lobbying for the cut-off to be at 40 hours," he told Reuters. "But Starbucks will continue maintaining benefits for partners and won't use the new law as excuse to cut benefits or lower benefits for its workers."
Starbucks rival Dunkin' Brands (DNKN) has been lobbying the government to narrow its definition of a full-time worker, which would ease its requirement to provide health insurance to workers. Under the Affordable Care Act, a full-time employee is defined as working at least 30 hours a week, but Dunkin' Brands and other companies are pushing to get that changed to 40 hours a week.
With the ACA set to go into effect next year, some businesses are cutting workers' hours to just under 30 hours per week as a way to sidestep that requirement.
Clothing retailer Forever 21 recently stepped into an Obamacare minefield when consumers accused the chain of slashing worker hours as a way to avoid providing benefits under the health care insurance overhaul. The clothing company denied that was its motivation.
But other companies are openly citing Obamacare as the reason they're cutting benefits. UPS (UPS), for example, is trimming health care coverage to 15,000 spouses who are eligible for insurance through their own jobs. UPS said the move, which will save about $60 million annually, is tied to higher costs associated with the ACA and rising medical costs in general.
Larger companies are less likely than small businesses to cut health care benefits under the ACA, according to survey earlier this year from the International Foundation of Employee Benefit Plans.
Starbucks delivered strong fiscal third-quarter results in July and boosted its full-year profit outlook. It's also busy expanding. Its latest plan involves on rolling out its own line of snack bars and fruit pouches.
The bottom line might be that it's easier to swallow potentially higher health care costs if your core business is growing.
Follow Aimee Picchi on Twitter at @aimeepicchi.
What we need is a single payer plan that is a hybrid of what is in practice in the UK and Japan. Won't work! You say? We have two working single payer plans already implemented in the US for many decades. The first pays for the health care of active duty military. If you get sick in the military it gets taken care of and it doesn't cost you anything. The second plan pays all the medical expenses for the life long care of millionaire politicians fortunate enough to be elected to congress. If it's good enough for them it's fine for us.
"Clothing retailer Forever 21 recently stepped into an when consumers accused the chain of slashing worker hours as a way to avoid providing benefits under the health care insurance overhaul."
Anything to go against the great messiah is stepping into a minefield, God forbid free thinkers and independant minds operate against the great one's obamacare.
No Picchi, the bottom line is that Starbucks was granted a year to not have to pay up anything, and then there's the fact that NO ONE knows what will happen come 01-01-14 yet.
Republicans don`t want to see this story.They dream up 100 new lies every day
Any smart businessmen who face competition when selling goods and services to consumers, know that they should never mix partisan politics with business. Still there are plenty of dumb ones out there like people at Forever 21, Dunkin, etc who won't keep their mouth shut, would try to score a political point just to find they had alienated an important part of their customer base and are now watching how revenue slips away to the competition. Good thing is that "true" free Market still rules in America.
in 1 year, when starbucks raises their prices to pay for the healthcare, these same liberals on here will be crying how greedy starbucks just wants to screw the little guy and make even bigger profits.
lol hey libbies, dont be surprised when the prices go up. it will be YOU who pays for the healthcare of starbucks employees. lol enjoy that
congrats aimee, after years of looking you finally found one company out of thousands that is pro obamacare.
in related news starbucks stock is down today.
Let's see how that works for them.
Now may be a good time to sell any Starbucks shares you may have lying around.
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[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
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