Watchhttp://money.cnn.com/2012/07/13/smallbusiness/health-care-employer/index.htm
NEW YORK (CNNMoney) -- In the wake of the Supreme Court's health care decision, several companies with 50 or more full-time workers have embarked on a quest.
Their aim: Get below 50 and dodge the employer mandate.
Kari DePhillips, who co-owns the Content Factory, a public relations firm in Pittsburgh, was hoping she could just break up the company to sidestep the rule. Maybe one firm would do marketing while the other builds websites.
The other way business owners are planning to deal with the law is a devastating one. They plan to cut staff and switch full-time employees to part-time, which the law classifies as less than 30 hours per week.
That's the reality for the 425 workers at David Barr's nearly two dozen KFCs and Taco Bells across Alabama and Georgia. Barr has already done the math.
He currently provides health care for managerial staff only, and it costs him about $125,000 to cover the 30 who take it. Extending that to every full-timer would cost him another $545,782 a year.
Health reform's creation of state insurance exchanges promises to bring down those costs, but Barr said any expenses even close to that will still outmatch his available cash.
"This business model isn't meant to support those costs," he said.
To minimize expenses, he'll fire workers and cut hours to reduce the number of full-timers to 60. Then he'll opt for the penalty instead of paying insurance. A $60,000 fine pales in comparison to the huge potential rise in health care costs.
Cashiers would be replaced by self-order kiosks, cooks with chicken breading machines. These options are too expensive now, he said, but they would make sense then.
Follow
Befriend (9)
410 threads
4,107 comments
Baltimore, MD
http://money.cnn.com/2012/06/29/smallbusiness/health-reform/index.htm
The rule does give quickly growing small businesses a reason for pause. Jennifer Clary is co-founder of vegetarian food deliverer Gobble Green in Los Angeles, where her company has exploded in size from one employee in 2009 to 28 this year. She expects to pass the 50-worker mark before the new rule goes into effect, so she's preparing for a numbers game and lots of questions.
Will it make sense to hire the 50th worker? Would it be more profitable to stay small? Should the customer service department be outsourced?
The law has the potential to cap her company's growth, all to provide an option Clary said her team doesn't care for. Last month, she asked her staff whether they'd want health insurance, and all but two said no. The others said maybe.
Follow
Befriend (4)
52 threads
4,416 comments
Corning, NY
Premium
"People who design easily-gamable systems belong in the lowest circle of hell" -- Charlie Munger
Follow
Befriend (4)
52 threads
4,416 comments
Corning, NY
Premium
Hey, this is what we do in America. We take the worst ideas from the far-left and the far-right and combine them into the worst-possible legislation.
With housing, we let the far-left convince us that we must loan money to people with no job/income/assets. (If we don't it's "discrimination!") At the same time we let the far-right convince us that Glass-Stegall was obsolete.
With health care, we force people to buy private insurance. The private insurers are laughing all the way to the bank. And the far-left is congratulating themselves on how compassionate they are.