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
1161Comments
Nov 28, 2012 6:08PM
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This guy is being real disingenuous. He's already keeping 150 employees below full time to avoid paying for their health insurance which is his own policy.I will tell you what he is going to end up doing , he is going to keep these employees under 30 hours by hiring some more part timers and every one will qualify for Medicaid and live happily ever after,especially Dean Hodges.
Nov 28, 2012 5:55PM
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The economy is running so thin and feeble it hasn't paid wages to keep pace with inflation for two generations. Now, the boo-hoo-hoos are that it's too sick to afford employee health care.

 

Maybe it's time to make health care affordable, ya think? Or just cut the crap and go where so many really want to take the whole distasteful issue of employees: human slavery redux!

Nov 28, 2012 5:53PM
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Already thin margins? Am I the only person who sees companies posting record profits quarter after quarter? Pay up you cheap bastards. Someone needs to shame owners who are such tight@sses that you could shove a lump of coal up their tight asses and in less than 1 hour, pull out a diamond.
Let's just say I'm one of the 47% and plan on staying that way until I get some goddamn respect from you cheap bastards. If you don't wanna cough it up legitimately, then I'll take it from you this way, no skin off my balls.
Nov 28, 2012 5:47PM
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The point here really isn't about WHO pays for it.  The point is that is isn't free - someone has to actually pay for it.  In order to give someone $1 of benefits, you have to take that $1 from someone else to pay for it.  Healthcare and pensions must be addressed, but there are no easy answers.  It's time to make some grown up decisions about what we need and how much we can actually afford.
Nov 28, 2012 5:47PM
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If I lived in Nebraska, I'd dine at Jimmy John's!!
Nov 28, 2012 5:46PM
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Starbucks has worked on this issue for years.

 

Nov 28, 2012 5:41PM
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Doom Gloom, Doom Gloom.  Funny you take a look at the rest of the industrialized world and they have healthcare for all and they spend less than the US does.  The only reason things like this are brought up is we are sticking with the idea that employers provide healthcare. We should have 1 single payer system like the rest of the industrialized world and get rid of the middleman that provides insurance at a profit.  I for one have seen my health insurance decrease the last 2 years and that is the 1st time since I got out of school on 1989 that has happened.
Nov 28, 2012 5:36PM
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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 5:36PM
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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 5:29PM
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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 5:27PM
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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 5:23PM
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What terrible writing. Papa John did not threaten anything, he said that 14 cents per pizza is all it would cost him to pay for Obama care. I will gladly pay 14 more cents for every pizza I eat if it means the employees get the healthcare that they deserve.
Nov 28, 2012 5:22PM
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This would not be a problem if we had "UNIVERSAL SINGLE PAYER HEALTH CARE"

 

Nov 28, 2012 5:21PM
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Well, we'll make it easy on you. If you act like a jerk and fire people, cut back hours, and make political statements just because you don't like Obamacare, we'll just take our business elsewhere and then you'll soon have legitimate reasons for closing down your business.

If your competition is smart, they'll treat their employees well and not be making political rantings, and they'll be gaining the customers that will be avoiding you.
Nov 28, 2012 5:21PM
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By capping balloted profit margins and increasing the customer base for insurance companies, which will spread the cost through more people being insured, rates will dramatically drop for thousands of businesses who already provide a healthcare option to their employees and will cut the cost of doing business. The only one's who might suffer are the dead beat companies who treat their employees like guano and provide no benefits, to them I say " To Bad so Sad " you should have been doing the right thing all along.
Nov 28, 2012 5:20PM
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$1.60 per hour more per employee, based on 2,080 hours a year, for 150 employees. Raise your prices; if your products good people will pay the additional cost. How many people actually hesitate about the price when they go out to eat. If people are willing to pay $5.00 for a beer when they eat, why won't they pay the residual costs?

Nov 28, 2012 5:20PM
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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 5:16PM
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"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 5:14PM
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"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.
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