Subway CEO says don't worry about Obamacare
He argues that while it will make his industry less competitive, at least all operators are facing the same problem.
"It’s going to affect the food business and it’s going to make it less competitive, compared to eating at home, for instance," he said. "But probably every operator will have to deal with this. It will be an extra cost on the average hour that you have to pay for. And probably people will raise their prices and pass it on to the consumer."
Dunkin' Brands (DNKN) and other companies that depend on part-time workers are lobbying the Obama administration to relax requirements that they provide health insurance for people who work as little as 30 hours per week. Employers with 50 or more workers are required to offer what's known as "minimum essential" health insurance. Critics say the mandate would create onerous financial burdens on many businesses.
For Subway, Obamacare would apply to franchisees with multiple locations becaues the typical store has about 12 employees. The closely held Milton, Conn., company is taking a more measured tone toward Obamacare than others in the restaurant industry with good reason. As NBC News recently noted, Papa John's (PZZA), Denny's (DENN) and Applebee all saw their reputations suffer among consumers because of critical comments their executives made about the Affordable Care Act.
Speaking later on CNBC, Deluca said Obamacare was the "biggest concern of our franchiees because they don't have enough information" on its potential impact. Their unease understandable. A company spokesperson could not be immediately reached for further comment.
As my colleague Aimee Picchi recently noted, employers pay about $4,664 to insure a single worker and $11,329 for a family on a yearly basis, which is far more expensive than the $2,000 per worker penalty companies face for not following Obamacare starting next year. Many critics say business will find it financially sensible to pay the penalties rather than provide health insurance.
According to data from the Congressional Budget Office cited by the Heritage Foundation, a conservative think tank, Obamacare will result in 6 million fewer Americans enrolling in employer coverage by 2016. However, the nonpartisan FactCheck.org disputes the idea that Obamacare is a "job killer."
"As we’ve said before (a few times), experts project that the law will cause a small loss of low-wage jobs -- and also some gains in better-paid jobs in the health care and insurance industries," FactCheck says. "Furthermore, some small businesses with fewer than 25 employees are already getting tax credits under the new law to help defray the cost of providing worker coverage."
The debate over Obamcare's impact on the economy won't be over for a long time.
--Jonathan Berr doesn't own shares of the listed stocks. Follow him on Twitter @jdberr.
The interesting part about this whole debate that no one talks about are the multitude of tests that people are needlessly runthrough daily by some doctors. I was employed by a major medical device manufacturer for a time and saw patients being run through eye scans in basically an assembly line of various tests. Most people under 50 would not have the need to be examined for tests on this equipment. One test taking less than 5 min cost approximately $450. There must have been 20 people waiting to be tested on this equipment and not one of them was over 45 in my estimation.
I have been for eye exams many times and over the years and inevitably they put me on equipment for various tests despite the fact that the causes of glaucoma have not been scientifically defined. And despite the fact that glaucoma in healthy people under 50 years of age is quite rare. Health care is broken but simply because of the rampant profiteering by health care providers.
Don't worry about Obama Care. Are you kidding? Who is this moron? PS Your food sucks also.
....The cost of living has and will continue to go ...UP...under B H Obama.....
We were all better off with the health care system we had. At least we wouldn't have had a bunch of radical left ideologues writing the legislation or a waistful bloated government controlling it!
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[BRIEFING.COM] The stock market ended the Tuesday session on a lower note after generally upbeat earnings took the back seat to geopolitical concerns. The S&P 500 (-0.5%) and Nasdaq Composite (-0.1%) ended on their lows, while the Russell 2000 (+0.3%) displayed relative strength.
Once again, market participants were focused on quarterly reports in the early going, but geopolitical worries overshadowed the impact of mostly better than expected earnings. Specifically, equities ... More
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