Small Businesses Seethe Over Obamacare, Stand to Get Hit Hardest

Tuesday, 20 Nov 2012 07:49 AM

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Small businesses are hot under the collar over the added healthcare-related costs they will be paying once President Barack Obama’s Affordable Care Act takes effect in 2014.

Those that pay minimum wages, such as hospitality concerns, could suffer the most because they will be unable to cut salaries to account for adding health insurance coverage.

Many of those companies operate on thin profit margins as it is and will get hit particularly hard.

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here

“Given that many restaurant employees were earning the minimum wage before [Obamacare], it is often not possible for employers to decrease wages to cover the cost of providing insurance,” said Adam Powell, president of Payer+Provider Syndicate, a health services consulting firm in Boston, according to The Christian Science Monitor.

Employers “must either pay the penalty or increase the value of their total benefit package by adding [health] insurance. In either scenario, the law increases the cost of maintaining a minimum-wage full-time employee.”

The healthcare law, widely referred to as Obamacare, requires companies with 50 workers or more to provide health insurance to all employees who work a minimum 30 hours a week, beginning in January 2014.

Companies that fail to do as such must pay a $2,000 penalty for each full-time employee after starting at number 31 — the first 30 uncovered employees are exempt from the penalty.

Many restaurant executives and other businesses have said they’ll take on more part-time workers to get around the added costs.

John Metz, who owns 40 Denny’s restaurants and several Dairy Queen locations, told the Huffington Post he is considering adding a 5 percent surcharge to customers’ bills to offset increased healthcare costs.

“If I leave the prices the same, but say on the menu that there is a 5 percent surcharge for Obamacare, customers have two choices. They can either pay it and tip 15 or 20 percent, or if they really feel so inclined, they can reduce the amount of tip they give to the server, who is the primary beneficiary of Obamacare,” Metz told The Huffington Post.

“Although it may sound terrible that I’m doing this, it’s the only alternative. I’ve got to pass the cost on to the consumer.”

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here

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