Dunkin' takes shot at modifying Obamacare
The company is lobbying the government to narrow the Affordable Care Act's definition of 'full time,' which would mean fewer employees for it insure.
The question of who counts as a full-time worker is coming under fire from Dunkin' Brands (DNKN), which wants the government to narrow its definition under Obamacare. That's because it wants to avoid paying health insurance for Dunkin' Donuts employees who work as little as 30 hours a week.
Dunkin' Brands is lobbying the government to change the U.S. Affordable Care Act's definition of "full-time" to employees working at least 40 hours a week, instead of the 30 hours currently written into the law, Chief Executive Nigel Travis told the Financial Times.
The latest volley from an iconic U.S. business comes as the ACA is set to go into effect next year. The law will require employers with 50 or more full-time employees (30 hours or more) to offer those workers "minimum essential" healthcare insurance.
Dunkin' Brands, which also owns Baskin-Robbins, operates on a franchise model. The parent company, excluding workers at its company-owned restaurants, employed more than 1,120 people at the end of 2011, according to its annual report.
But the real benefit would likely go to Dunkin's franchisees, who operate more than 10,000 Dunkin' Donuts locations and almost 7,000 Baskin-Robbins restaurants.
Other big businesses are lashing out at the costs of the plan. Supermarket chain Kroger (KR) told the FT that some companies might decide to pay the government-mandated penalty for failing to insure employees simply because it's cheaper than buying insurance.
Small-business owners are also reacting. As previously reported by MSN moneyNOW, one Wendy's franchise in Nebraska is cutting back the hours of non-management employees to avoid paying health benefits. The local franchise vice president said his company couldn't afford to pay for health insurance and instead is cutting hours of about 100 Wendy's workers.
Other businesses are keeping their employee count under 50, the FT notes.
The average cost to employers of providing insurance for a single worker is $4,664 and $11,329 for a family, the FT notes, citing the Kaiser Family Foundation. The penalty for not insuring employees under Obamacare, meanwhile, is $2,000 per worker.
"If you look through the economics of the penalty the companies pay versus the cost to provide coverage, the penalty's too low, or the cost of coverage is too high, or the combination is wrong," Kroger Chief Executive David Dillon told the newspaper.
Funny how Fiesty Redhead and all the cattle that follow her are missing from this string of posts.
Seems like they are the cause of this and have no answer so tney stay quiet.
Here's a good article about related to this explaining exactly what the $2000 fine really will do:
The real kicker to the whole thing is that the health insurance provided by a company must be "governmnet approved". This means even if a company provides insurance they still could be subject to the fine. I know of two examples. Hobby Lobby is willing to offer insurance under the new laws but is against contraception due to regilious beliefs. This makes them subject to the fine because under the ACA they must provide insurance that covers it. Since they are not a church they can't get the exemption.
The other example is the company at which my brother in law works. He had Cadillac level insurance for him and his family. Basically everything after his deductable is paid once the deductable is meet. They also provide a HSA (company funded) to cover the deductable. They have 150 employees, this plan is not "government approved" (I don't what part of the plan is causing the problem) and they have to pay the fine. So to avoid the $300000 per year fine they are taking it out of the workers pay but still providing the insurance. I remember hearing but cannot find that thess "high" level plans are fined to get everyone on the same level plans. I think the theory is this will bring all cost down since the insurance companies won't have to pay them out. I cannot find anything to support this so I am unsure about this part of the ACA.
In any event the rules of this plan have raised insurance premiums because all plans must meet a minimum level of care now. So the insurance company has to raise premiums to be able to cover the additional cost (this is known as business 101, income needs to exceed expenses to survive). I found this article showing an example of the increases. In this example it's .50 to $1 per hour. At 30 hrs per week at the max $1 over 52 weeks would equal $1560 per employee. If you have 150 employees that's $234000 in additional costs.
My personal feeling is the 2 biggest problems with the ACA are that they tried to "fix" everything at one time instead picking one or two problems and tackling those first then giving some time to see if plan actually worked. The second is law basically passed with only democrats voting yes. They completely ignored any input from republicans. This has been an increasing problem in government in the last 15 years or so. the bases for our system to work is compromise. You have a idea on the "left" side and I have a idea that is "right" side then we work together and meet in the middle. In that scenerio we help the greastest number of people and tick off relately few. Of course to do that would require giving a little from both sides. I thought Bush was bad at giving up ground to reach a compromise but Obama is far worse. And until our "leaders" stop acting like spoiled babies we are all screwed in the long run.
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