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.
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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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.
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.
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.
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
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.
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