Restaurant owner tries to work with Obamacare

It's going to be a tough road for one Jimmy John's franchise owner, but he's trying to plan for it and figure out a way.

By Kim Peterson Nov 28, 2012 3:02PM
Image: Medical doctor (tetra images/Getty Images/Getty Images)Restaurant owners are spitting mad about what implementing Obamacare will do to their already thin margins.

One Denny's franchisee threatened a 5% surcharge on meals, and suggested that customers could tip less. An Applebee's franchisee threatened to cut worker hours. Papa John's (PZZA) founder, John Schnatter, threatened to raise the cost of a pizza by as much as 14 cents and said he would "find tactics to shallow out any Obamacare costs."

So perhaps it is newsworthy, then, that one restaurant owner is simply going to try to make Obamacare work.

The Nebraska owner of 18 Jimmy John's franchises says he's going to figure out how to give his employees health care. "I'm trying to save for it and plan for it so I can comply with the government, provide health care and still pay for it," Dean Hodges said in an email to the Huffington Post.

Already, 38 of Hodges' 550 employees receive health care benefits because they are full-time employees. You can only get those benefits after working full-time for six months, and so another eight or nine workers will become eligible next year, the Post reports.

But the Affordable Care Act considers an employee working 30 or more hours a week a "full-time equivalent." Restaurants will have to insure them or pay them more so they can buy their own health insurance.

For Hodges, that means 150 more employees will be considered full time. And that's a huge new expense for his business. He told the Huffington Post that those 150 employees would add some $500,000 in premiums, making 10 of his 18 stores unprofitable.

This is a very tight spot to be in. But kudos for Hodges for talking about it rationally and showing exactly what he's dealing with under Obamacare. He's trying to do the right thing by his employees, but he's got a tough road ahead.

"We're not cold people who don't want to insure people," he told the Huffington Post. "It's not a nasty greediness on our part. But if I'm unprofitable I can't go on, I can't exist and I can't employ anyone."

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Tags: Food

Before:  you had a job but no healthcare


Now:  you have no job but you have healthcare


Which is worse?

Nov 28, 2012 6:34PM
I own a dental practice in the Chicago area...I pay for health ins for my 10 employees,and their families...6 of the 10 are single moms ,so, I am their source of income,and insurance. for their kids,as well..because of the prem rate hikes $200 each person, this year ..(.which is a hike!),the low economy,no jobs,no money ,no dentistry,my business has suffered...yet I still have expenses..lights,gas ,supplies.,water,  rent ,taxes paychecks...and that's just my office...I too have a family,who need supplies, a roof ,food, ins..etc...Obama care will kill me..I don't want to lay off employees but he's left me few my taxes,and costs increase..there's less to pay those who make and send my supplies are taxed more..they will pass the loss on to my invoice,and I will have no choice but to do the patients are already in wise.....why weren't more folks seeing the trouble we're in?
Nov 28, 2012 5:20PM
Unfortunately, people in this country who voted for Obama have no idea how they have ruined America!  The good news is they will know real suffering soon.  Too bad the rest of us will be affected
Nov 28, 2012 5:14PM
Obamacare will bankrupt many thousands of small businesses when it is fully implemented. The so-called rich will be making far less, but far more poor people will be without jobs. Obama's policies will reduce the income gap between the rich and poor, but the income level of the poor will remain the same as it has remained the same ever since LBJ's War on Poverty. Seven trillion has been spent on the welfare system for the poor, and not a thing has changed.
Nov 28, 2012 5:09PM
Almost all of you are a little late to the polls.
Nov 28, 2012 4:58PM
I for one would be willing to pay an extra 14 cents for a pizza.....If i can afford $10 or $15 for a pizza, I can afford 14 more cents..................
Nov 28, 2012 4:27PM
ObamaCare Suck and will be the death and destruction of many American Business'
Nov 28, 2012 5:04PM
Amazing how many businesses will go under because of this or lose profitability which will force employers to do away with or cut annual raises and bonuses. In the long run this is not good for anyone. The people who will feel it the most are the employees getting coverage for $100-$500 per month now through the employer when the employer cancels all the coverage and pays the fine because it's the cheaper way out. Its the only way they'll be able to stay in business.  The employees will have to purchase the insurance on their own which will cost on average 5X what they pay today. For me I was paying about 450 per month (family of 5) through employer and left that job to be an independant consultant and the cost went up to 950.  Since Obamacare was introduced, even though not in full effect yet, my premiums are now over 1800 per month.  Its like having a second mortgage.  Not to mention that my income tax dependant deductions are being reduced from $1000 to $500.  Obamacare, high forclosure rates, high poverty rates, high unemployment rates, high crime rates...coincidence...I think not.  My only question right now is does Vegas have a line on an Obama impeachment.  I may want a piece of that action.
Nov 28, 2012 5:16PM

"We're not cold people who don't want to insure people," he told the Huffington Post. "It's not a nasty greediness on our part. But if I'm unprofitable I can't go on, I can't exist and I can't employ anyone."


He may be trying, but with numbers like these, I doubt he's going to be very successful at making it work. When stores becomes unprofitable, companies close them. That would mean 10 out of 18 stores that become unprofitable will close.

Nov 28, 2012 4:23PM
Kudo's for Hodges TRYING, but as he said "We're not cold people who don't want to insure people," he told the Huffington Post. "It's not a nasty greediness on our part. But if I'm unprofitable I can't go on, I can't exist and I can't employ anyone." So welcome to Bo-Dumbo-Care, only a $500,000.00 new expense.!
Nov 28, 2012 5:02PM
Where does it end? Force the business to provide free healthcare, make the business pay more taxes at fed and state and county and city levels. Govt employees great pay, great healthcare and no job loss. No more business, where does the money come from to pay for the freebies? Liberal CA spending like there is no future problems, but prop 30 took care of that for now. Rosy picture for all state employees. Wait a minute, what happens if business leaves the state ? Too expensive to do business here, more unemployed and no tax base.... Now what???? 
Nov 28, 2012 5:36PM
The problem with Obamacare is that it doesn't fix the real problem, which is the insurance industry itself.  So now we'll keep pouring millions of dollars into a broken system.  Insurance executives will continue to be rich, middle class families will get poorer, and the poorest people in our country will slip even further below the poverty line.  I wonder how much Obama received in campaign funds from big insurance.  He's clearly pandering to them.  Real healthcare reform would eliminate the middle man (insurance companies) and put people directly in contact with the health care providers they need.
Nov 28, 2012 4:44PM
And his estimate of $500,000 is BEFORE Obamacare hits and makes premiums unaffordable for all those who are NOT on any kind of government assistance!
Nov 28, 2012 5:27PM
When the private health insurers are driven out of business, watch what happens when only the Government health plan remains. If things go on as they are now, really bad times are ahead.
Nov 28, 2012 4:27PM
Close the business and tell obama to pay their unemployement. Start taxing all the rap stars and athletes 70% of their income also. Obama is rich why is he getting a pay check at all? Everything in his life is paid for, why don't he start helping us poor folks out?
Nov 28, 2012 5:29PM
The article states these businesses "threaten".  It's not a threat if the expense is more than the business can bear, it's reality.  Most people understand if expenses are greater than revenue you can't function as a for profit business.  Most small business owners have private equity tied into their business so they not only lose the business and their livelihood but also their home, savings and any thing else they may own.  Why lose everything because of a public mandate?  If costs more to operate than you can collect in revenue it's time to get out if you can.  People may say they will pay more to provide benefits for workers, but I'm not sure I believe this.  Look at all the business that is shipped to Mexico, China, India you name it because companies in the USA could not afford to keep open in the United States.  Now if people really were really willing to pay more, this business would still be in our country.  You can not expect business to keep functioning at a loss.
Nov 28, 2012 5:36PM
There will be a lot of prime Restaurant property available soon.   Raising prices won"t help if it drives off business.  A lot of restaurant business is seasonal.  These  part time employees will have to be covered as year round employees.  What business owner should have to do this?  Its not just this business owner raising his prices, it,s every business owner in the whole country raising his prices.   
Nov 28, 2012 5:14PM
"We're not cold people who don't want to insure people," he told the Huffington Post. "It's not a nasty greediness on our part. But if I'm unprofitable I can't go on, I can't exist and I can't employ anybody"

This is what the Democrats, liberals, and especially Mr. Obama don't understand.  Please please meet with this man Obama.
Nov 28, 2012 6:22PM
Only the Federal government can operate at a complete loss and still remain open for business! lol...aka $17 trillion+ in national debt and rising! What a joke...we are so backwards as a society it's fn nuts.....i was at a Wal-Mart the other day and witnessed a lady pay for two shopping carts full of junk food with food stamps? Hey all you morons who voted for Obama.....the only thing I can think of is you must actually want the system to crash???
Nov 28, 2012 6:46PM
I think everyone should read his last quote again and again.  We are also in the restaurant business and we can't just raise our prices every time the govt. mandates that we have to SPEND OUR MONEY on something THEY sign into law.   Remember this people....they don't spend a dime of their own money, this OUR money they are spending.  If we raise our prices too high we won't have any customers, so then we go out of business and 45 employees lose their job's.  If we can't make a profit then why bother.  This is what many of us are very very afraid of.
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