ObamaCare: Perverse Incentive to Employers
Darden Restaurants, Inc., owner of Red Lobster and Olive Garden brands, has begun testing a method to avoid the extra health care costs written into the Affordable Care Act (http://www.sltrib.com/sltrib/money/55049960-79/darden-workers-health-com...). Excerpts:
Darden Restaurants Inc. declined to give details but said the test is only in restaurants in four markets across the country. . .The move entails boosting the number of workers on part-time status, meaning they work less than 30 hours a week.
Under the new health care law championed by President Barack Obama, companies with 50 or more workers could be hit with fines if they do not provide basic coverage for full-time workers and their dependents. Starting Jan. 1, 2014, those penalties and requirements could significantly boost labor costs for some companies, particularly in low-wage industries such as retail and hospitality, where most jobs don’t come with health benefits.
Darden, which operates more than 2,000 restaurants in the U.S. and Canada, employs about 180,000 people. The company says about 75 percent of its employees are part-timers. . .McAdam also noted that Darden is not alone in looking at ways to keep labor costs in check, with companies industrywide prepping for the new regulations to take effect.
This summer, McDonald’s Corp. Chief Financial Officer Peter Bensen noted in a conference call with investors that the fast food company was looking at the many factors that will impact health care costs, including its number of full-time employees.
"There’s not a company in those industries that aren’t looking at this," said Paul Keckley, executive director of the Deloitte Center for Health Solutions.
Some people are already proposing further federal legislation to curb this trend, forcing employers to pay these health care costs by not allowing the exemption for part time workers. Wouldn't it be better to simply remove the employer from his/her central role in paying for health benefits? Let's collectively pay for health care and collectively enjoy the benefits and never worry about job lock again. Let's get the cost of health care off the backs of our employers and free them to better compete in their own market.
Dr. Joe Jarvis