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
1190Comments
Dec 1, 2012 11:14AM
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BUSINESS OWNERS THOUGH have to be realistic though about price increases.they dom it to often and to much people will go elsewhere.
Nov 30, 2012 9:11PM
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This guy can't be doing too bad,as he has 18 Jimmy Johns.

Every employee in this country has the right to affordable HEALTH INS.

Greedy right wing people oppose everything that not in there best interest.

If you want a change run BACHMANN FOR PRESIDENT>

Nov 30, 2012 12:06PM
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I see all these comments about health care and I wonder if any of you understand who was paying the freight before.  Everyone is in a panic because the insurance companies have jacked up their rates.  All these people, even the uninsured, were getting healthcare before, mostly in the most inefficient manner of all, through the E.R.  There is no system less efficient thant what we had before, and the costs were rising a staggering amount each year.  Large companies and the government primarily have been paying higher premiums over the years because the hospitals have to get their money from somewhere.  What this bill really DOES do is bring in the people who were uninsured before, a good many of them simply because they were too cheap to actually pay for health insurance even though their companies offered them a plan.  There is not now, nor has there ever been, a "FREE" lunch.  SOMEONE has been paying all along.  This bill has simply changed the way the costs are peanut buttered across the system.  It has also mandated that insurance companies HAVE to spend a set amount on actual health care rather than pay it all out to stockholders and executives.  It would have been a lot better if the congress had gone for a single payer system, but the insurance companies had too big a stick.    I don't actually have a dog in this fight, my insurance through my company is excellent, and I'll be on medicare in two years, but I could see the handwriting on the wall, we had to do something. I do believe when the dust finally settles we will be better off, but the implentation is going to be messy. You might even have to pay an extra quarter for you hamburger.
Nov 30, 2012 9:32AM
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Everyone I talk to that does not want Obamacare has medical payed for by someone else. Interesting, they all get a free ride as teachers, city or state employees, or big companys. Someone has to pay for it. Either noone or everyone. Because my tax dollars dont want to pay for any tax payed workers if they dont want to pay for any of mine. Let the teachers, military , judges, congressman, board members , everyone pay their own tab for medical. WE ALL CAN PAY FOR OUR OWN.
Nov 30, 2012 8:17AM
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I continue to be amazed at the lack of insightful comments on this thread.  Having universal health care is actually a good thing.  I know that as Americans we're so afraid of "socialism" well let's think about this: Medicare is socialism.  The majority of elderly Americans would never be able to afford insurance coverage at retirement without Medicare.  The problem with Medicare is fraud through the providers not the federal govt.  It's absolutely asinine to expect people to pay an exorbitant amount in insurance premiums every month and then even when they are covered by insurance end up in bankruptcy court because of additional healthcare costs not covered by insurance.  Why aren't the American people outraged by getting screwed by insurance companies rather than being outraged by a President that actually wants all Americans to have access to decent health care.  If we're talking about improving our economy and our leadership position in the world, wouldn't it make more sense to actually focus on the health of the citizens?  I continue to be amazed why so many people are opposed to all Americans having access to insurance similar to Medicare.  I'm not suggesting it's free.  Everyone pays an appropriate premium payment, but I would love for someone to explain to me why making sure the workforce has adequate access to health care somehow smacks of socialism.   I have a friend that may have a very serious illness and  because she must come up with a high co-pay she may have to wait much longer than is reasonable to determine the seriousness of her illness.  How is this good for the economy?  
Nov 29, 2012 11:51PM
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Real simple cut hours to 29 hrs a week hire more people or start impeachment on the idiot you elected. The business sector needs to just shut down and break this guys butt. Wal Mart and all of it's mad employees het the Waltons do not need Wal Mart have big clearance sale shutter the doors. All business should roll back hrs to under cut this socialist POS SOB in office.
Nov 29, 2012 11:45PM
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Here's a question where I see a lot of people have problems and don't understand the cost of running a business.  If I run a business and pay an employee $10.00/hr, how much does the employer really pay for that  employee?  I know it isn't $10.00 after Social Security, Medicare, Unemployment Insurance and other cost. 
Nov 29, 2012 10:30PM
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Has any of you thought that maybe were all looking at the wrong culprits Just maybe We The People and if our Congress can get their Special Interest Groups out of their pockets and start looking at Insurance Companies and their Fatcat CEO's and reform the whole Health Care System. It used to be if you had a job your Company provided Health Insurance and it didn't cost you anything. Capitalism only works if greed and over charging for something that we all have to have, is controlled so it doesn't get out of hand. Well it is out of hand.  This is The People Of The United States, not the Special Interest Groups. Start working for all The People of These United States, bring cost under controll. Start doing your jobs.
Nov 29, 2012 9:41PM
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People do your math. Jimmy Johns own website states that stores net profit averages $264,270/year.  Based on this, someone owning 18 stores would earn nearly $5 million net profit. So paying $500,000 would still net him $4.5 million - and this does not include the tax credits.

 

Hmmm - $4.5 million net profit - and claiming that he would have to close stores - this is a load of crap.   

 

 

Nov 29, 2012 9:13PM
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Lower their hours below 30 hours and they can get second job elsewhere. Waiters make most of their salary from tips anyway. Owners can maintain their standard of living and nothing really changes for everyone else. People usually find a loophole they can use to circumbent the system, specially businesses. That's why some of the rich have a lower tax rate than some of their employees. A lot in Congress fall in that category so what's the incentive to change it. McCain would have let the auto industry go bankrupt and sent more jobs overseas, just like Hoover stood by and let the Great Depression happen.  Obama is the Roosevelt of the 21st century and in 100 years there will be an Obama monument in D.C. as testament to the great society that Kennedy and Johnson envisioned 50 years ago and to the majority of Americans that made it  possible.

Nov 29, 2012 9:12PM
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I do feel sorry for those who work in the restaurant business. Esp in Calif. If 30 hours is fulltime they will just get their hours cut if they are lucky enough to even work that many hours. I live in a college town and most of the people that work in restaurants have to work two three jobs to get 40 hours. None of them get health care few if any get sick leave, vacations... most companies do not give vacations to part time employees. So most restaurants at least in this town wont even notice.

    The sad thing is instead of making it a governmental system like Canada has the republican chaired committee went the pro business approach and connected our health care to insurance companies who are in the business to make their investors money. Just noticed in paper today one of those health insurance companies is increasing their rates by 18% to all their paying  customers.

     We have a system in place for all it's flaws it at least exists. Each year a greater part of our population becomes part of it esp as the baby boomers are retiring and that is medicare. Make it cover everyone and continually fix it.,hunt down the crooks. improve it and have us all pay into it creating a large pool of money like Canadians do, unlike social security everyone pays into it rich or poor.  If we want it to succeed we have it  be the only government provided health care for its employees, congress, house of representative, state and local, President so forth.

       Everyplace I have worked that had med insurance I had to pay so much a paycheck would it matter if I paid it to an insurance company or a goverment agency... not really, Would my goverment stop and listen to me if I said dont spend billions on wars and future wars to come and spend it smartly on giving us all health insurance...no profit in it.  

Nov 29, 2012 9:06PM
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Most countries in the world have a form of Obama Care. It has not bankrupted any one, no business, or any nation. To the contrary. People and nations have prospered with the thread of devastating medical expenses removed. Costs go up for every body, you , as well as your competion. Only the super greedy that can't imaging doing some thing for some one else that is perhaps less fortunate have a problem with this concept. This is freedom, not to face disaster when you get sick or injured. This works well in Israel,Norway, Sweden,Danmark,Holland Belgium,Germany, Austria, Italy, Spain, Portugal, France, Poland, Russia, Greece, Switzerland and so on. But not in America? Give me a break. It has to work because it has to work. The status quo is no option. Good luck..
Nov 29, 2012 9:04PM
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"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." If people would have realized this on November 6th we would not be having this conversation!
Nov 29, 2012 9:03PM
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Has anyone noticed their Companies Health policies lately? You're paying more and getting less. All this in preparation for the Full effect of Obamacare!  Enjoy the hollowed out healthcare. Hope no one get critically ill because you'll have to take out a mortgage to pay your portion. 
Nov 29, 2012 9:01PM
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If Obama's healthcare will offer an insurance policy similar to Medicare as a public option, I will glady change to it because the premium will be much lower than what I pay now.  I pay approx $350 per employee each much with an insurance company that pays doctors about 110% of what Medicare pays doctors.  However, the Medicare premium is only $98.50 per month for the elderly or disabled.  It is the insurance companies screwing the American people and making big profits, not Obama, not Medicare.  On another note, no big or small business should ever play politics with peoples lives or jobs by threatening to lay off or cut hours.  That is dispicable and those companies should be boycotted by the public. I have stop eating Papa Johns or Dennys.  I am a Registered Republican who knows the real side of how insurance works.  Voting for President Obama did not cost me any freedoms, any of my guns, or any more taxes.  Repuclican talking points are for the clueless.
Nov 29, 2012 8:59PM
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To all the money hungry publican I will pay .10 .25 or .50 more they dont need to be in ER room at 2 in the morming because they cant stand the pain anymore..That about the time a lot of small businesss men are getting out of their meeting (bars close).
Nov 29, 2012 8:58PM
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When you O,bama voters file your 2014 tax return, the IRS will not accept it until you turn over all your medical records. The GOV will know how many antidepressants you have taken, drug or alcohol, counseling sessions, they will how many birth control pills you purchase, they will  know exactly how many times Sandra Fluke has sex during the week and you will also have to prove you have bought health insurance.  Your government can finally force you to buy something even if you dont want it

Nov 29, 2012 8:56PM
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Maybe as individual small companies obamacare would be expensive. But I think their are corporations that you could lease your employees from at a rate that you could afford, that would do the payroll and pay your employee benefits. If their are no such company, then small businesses should think about organizing one. This is only a small hurdle for the true entrepreneur- capitalist. The cost of doing business has never stopped anyone from making a profit, since the cost is pass on to the consumers at a reasonable affordable price. In my experience health care insurance has always increase every year, because the insurance company raised their premiums yearly, options that where under one coverage is now itemized. The employee can buy cheaper insurance by choosing less options or lower coverage, depending on their health, need and age. Small companies buying their benefits through a large company would get a better rate

rather than trying to purchase these benefits on their own. This is another business opportunity for the entrepreneur who can  organized small companies into an organization.

Nov 29, 2012 8:54PM
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There's not a single interesting comment here. If you can't afford healthcare for your employees, then don't use people for 30+ hrs. Those people that don't have insurance because an employers bottom line is that their healthcare matters more, and therefore make people work almost full-time so they don't have to pay up. Those part-timers usually have to work two jobs or more to pay for their own private insurance, or they go without. Have these small business owners thought maybe they couldn't afford to expand their business if they couldn't provide equal benefits to all employees. Starbucks has offered part-time insurance for over ten years, Lowes, and many other big companies have as well. And lets not forget about the small business owners that have been insuring their employees all along, and competing with cheap prices from competitors who are able to because they offer lower priced products due to paying minimum wage, and not offering insurance coverage. Owning a business comes with big responsibility, and small business owners should be teaching the Big Boys of Corporate America that we take care of our own, instead of whining about their choice to employ people, and not insure them. Lets all wake up, because we are all in this together, and an extra 14 cents a pizza is nothing compared to an employee terrified of getting sick or missing work because a Doctors visit might take food from his/her kids, or put them on the street.
Nov 29, 2012 8:53PM
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you're obviously talking to the wrong audience from the comments that are being made. The obamians don't have the inclination (due to drain bamage) or the time since they are too busy looking forward to handouts that will come at our expense.
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