Jump to content

A Real World Example Of The Damage Obamacare Does To Businesses


Recommended Posts

Sure its fast food, but the same principles would apply for most small businesses with hourly employees.

The International Franchise Association held a convention in Washington this week where most of the Radio Shack, Dunkin Donuts, Curves and other franchisers were grumbling about new federal regulations, especially the impact of Obamacare.

Most, said Atlanta Taco Bell and Kentucky Fried Chicken franchiser David Barr, presumed that the reports about how hard Obamacare will hit them were overblown. "They had their head in the sand," he told Secrets.

That is until he pulled out his powerpoint showing how funding Obamacare will cut his--and likely their--profits in half overnight. With simple math the small business folks understood, he spelled out that their only choice is to slash employee hours so they aren't eligible for company-paid health care or stop offering insurance and pay the $2,000 per employee fine.

Barr has 23 stores with 421 employees, 109 of whom are full-time. Of those, he provides 30 with health insurance. Barr said he pays 81 percent of their Blue Cross Blue Shield policy, or $4,073 of $5,028 for individuals, more for families, for a total bill of $129,000 a year. Employees pay $995.

Under Obamacare, however, he will have to provide health insurance for all 109 full-time workers, a cost of $444,000, or two and half times more than his current costs. That $315,000 increase is equal to just over half his annual profit, after expenses, or 1.5 percent of sales. As a result, he said, "I'm not paying $444,000."

Providing no insurance would result in a federal fine of $158,000, $29,000 more than he now spends but the lowest cost possible under the Obamacare law. So he now views that as his cap and he'll either cut worker hours or replace them with machines to get his costs down or dump them on the public health exchange and pay the fine. "Every business has a way to eliminate jobs," he said, "but that's not good for them or me."

But that's not all. His experience tells him that most low-wage workers he would have to cover under Obamacare won't take it because their $995 share is too high, meaning those the program was set up for won't see any benefit. And those who do will because they have major health issues, likely resulting in higher premiums to him.


Link to comment
Share on other sites

That $315,000 increase is equal to just over half his annual profit,

While I m completely and whole heartedly against obamacare or any government mandated expense on tax payers, in no way can I believe a man who owns 23 KFC's has an annual profit of only 630,000 dollars.

There is so much to complain about with Obamacare. People making up lies is useless.I have a friend that owns one Red Lobster and his annual profits on that one store are way higher than that.

Link to comment
Share on other sites


The Supreme Court has decided it will wait until the last possible moment – Thursday – to publish its ruling on case of NFIB v. Sebelius, which questions the constitutionality of the individual mandate to purchase health insurance, which is also provides the underpinning to the Massachusetts health reform law, enacted in 2006.

The plaintiff in the case is the small business lobby group, the National Federation of Independent Business, which argues small businesses will buckle under the weight of new federal requirements to provide health insurance, or pay a fine of $2000 per worker.

This fine is much larger than the one attached to the Massachusetts law, which is $295 per worker. But two provisions of the federal health overhaul would actually loosen the regulations on small businesses here.

First of all, every company with more than 11 full-time equivalent positions in Massachusetts is subject to the fine, whereas the federal law only requires businesses with 50 or more workers to offer insurance.

Secondly, the Massachusetts law penalizes some businesses that actually do offer insurance, because not enough workers sign up for it. It doesn’t matter, in Massachusetts, whether the worker is getting insurance through a spouse, or through Medicare, through the Veteran’s Administration, or whether they are turning to the state’s subsidized health programs. The company pays the penalty either way.

The federal law gets this right: Businesses are not punished if their workers simply choose another health plan they have access to, unless they require a subsidy from the government.

But Bill Vernon, the NFIB’s Massachusetts State Director, said even in Massachusetts his organization is firmly of the belief that businesses are better off without the federal overhaul. He said if the national law is upheld, business leaders fear the state will end up with a patchwork of the most stringent national and state regulations - rather than a simple interpretation that the federal law supercedes the state law across the board.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Create New...