Tag Archives: National Health Law

by | November 5, 2012 · 7:10 am

Hospitality Industry Employment Risks: Hotels And Restaurant Groups Begin Limiting Employee Hours To Below 30 Hours Per Week To Avoid Health-Care Law Requirements

Several restaurants, hotels and retailers have started or are preparing to limit schedules of hourly workers to below 30 hours a week. That is the threshold at which large employers in 2014 would have to offer workers a minimum level of insurance or pay a penalty starting at $2,000 for each worker.

The shift is one of the first significant steps by employers to avoid requirements under the health-care law, and whether the trend continues hinges on Tuesday’s election results. Republican presidential nominee Mitt Romney has pledged to overturn the Affordable Care Act, although he would face obstacles doing so.

Pillar Hotels & Resorts this summer began to focus more on hiring part-time workers among its 5,500 employees, after the Supreme Court upheld the health-care overhaul, said Chief Executive Chris Russell. The company has 210 franchise hotels, under the Sheraton, Fairfield Inns, Hampton Inns and Holiday Inns brands.

“The tendency is to say, ‘Let me fill this position with a 40-hour-a-week employee.’ “Mr. Russell said. “I think we have to think differently.”

Pillar offers health insurance to employees who work 32 hours a week or more, but only half take it, and Mr. Russell wants to limit his exposure to rising health-care costs. He said he planned to pursue new segments of the population, such as senior citizens, to find workers willing to accept part-time employment.

He described the shift as a “cultural change” toward hiring more part-timers and not a prohibition against hiring full-timers.

CKE Restaurants Inc., parent of the Carl’s Jr. and Hardee’s burger chains, began two months ago to hire part-time workers to replace full-time employees who left, said Andy Puzder, CEO of the Carpinteria, Calif., company. CKE, which is owned by private-equity firm Apollo Management LP,  offers limited-benefit plans to all restaurant employees, but the federal government won’t allow those policies to be sold starting in 2014 because of low caps on payouts. Mr. Puzder said he has advised Mr. Romney’s campaign on economic issues in an unpaid capacity.

For more:  http://online.wsj.com/article/SB10001424052970204707104578094941709047834.html

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by | October 22, 2012 · 6:17 am

Hospitality Industry Insurance Risks: Restaurant Operators Face "Financial Hit" From New Health Insurance Benefit Programs That Take Effect In 2014

Under the Patient Protection and Affordable Care Act, companies with 50 or more full-time eligible workers must either provide basic coverage by Jan. 1, 2014, or face fines of $2,000 per employee. A full-time employee is defined as one averaging 30 or more hours per week over a 60-day period.

“We will have a financial hit,” said CEO Victor Ansara. “We first thought it was going to be $300,000, but maybe only $100,000 to $200,000. We just don’t know how many of our employees in their 20s, who are pretty healthy, will want coverage.”

Farmington Hills-based Ansara Restaurant Group, which operates 22 Red Robin outlets and five other restaurants in Michigan and northern Ohio, is bracing financially to expand its health insurance benefit program by as many as 665 full-time workers to accommodate expected federal health care reform.

The first 30 employees are excluded from the penalty. For example, an employer with 75 employees would pay the penalty for 45 workers, or $90,000.

Eligible employees that reject insurance coverage by their employer would have to pay a $95 tax, or 1 percent of income, whichever is greater, in 2014. The tax rises to $325 in 2015 and to a maximum of $695, or 2 percent of income, in 2016. Family coverage taxes would be about three times higher in those years. The penalty is estimated to raise $6.9 billion in 2016, said the Congressional Budget Office.

Ansara said his company covers about 130 management staff with various plans from Blue Cross Blue Shield of Michigan and Blue Care Network. Only about 35 of its estimated 350 eligible hourly workers have opted for the coverage, he said.

“It is very difficult to plan when we don’t know what our health care costs are going to be in 2014,” he said. “To comply with the regulation, we have to offer coverage to all full-time eligible employees.”

Of Ansara’s 2,300 employees, up to 700 hourly workers could become eligible for health insurance coverage, he said.

For more: http://www.crainsdetroit.com/article/20121021/SUB01/310219956/red-robin-group-among-restaurants-bracing-for-health-insurance-reform#

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by | August 9, 2012 · 6:46 am

Hospitality Industry Insurance Risks: Hotel And Restaurant Owners Face "Greatest Cost Increases" From Healthcare Reform Laws; Must Cover Employees Currently Not Eligible

“…Many retail and hospitality industry employers face a “double whammy” due to the upcoming health care reform law requirements…employers that do not offer qualified coverage face a $2,000 assessment per full-time employee—those working at least 30 hours a week—starting in 2014…”
Employers in the retail and hospitality industries face the greatest cost increases when provisions of the healthcare reform law imposing financial penalties on employers that do not offer qualified coverage go into effect in 2014, according to a survey released Wednesday.Forty-six percent of employers in the retail and hospitality industries and 40% of employers in the health care services industry expect health care cost increases of at least 3% due to health care reform law requirements, according to the Mercer L.L.C. survey of 1,203 employers.

Some will face stiff cost increases as they must extend coverage to employees who are not eligible for coverage currently. In other cases, the coverage they provide, such as through what are known as mini-med plans, will not meet 2014 standards. That includes a ban on annual dollar limits on essential benefits as laid down by the Patient Protection and Affordable Care Act.

Read more: Retail, hospitality industries face big reform costs | Modern Healthcare http://www.modernhealthcare.com/article/20120808/INFO/308089995#ixzz233mGPu1M

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by | April 8, 2011 · 10:53 am

Hospitality Industry Health Insurance: Law Firms Advise Hotel Ownership And Management To Prepare For Implementation Of Health Care Reform With "Wellness Programs" And State-Run "Insurance Exchanges" On The Way

Given the legal challenges to the proposed reform of the United States health care industry, there might be a temptation on the part of hoteliers to take a laid-back attitude toward preparing for the changes. That line of thinking, however, would be a mistake, said Scott Sinder, a partner in the Steptoe & Johnson law firm government affairs and public policy practice.

  • One of the biggest issues hotel companies will have to wrestle with will be whether to retain grandfather status, which refers to plans in place prior to 23 March 2010
  • Grandfathered plans, for example, can allow for changes to the network of providers but cannot impose new or decreased annual spending limits
  • The potential introduction of a wellness provision that provides funding for employers to establish wellness programs…will be the biggest key to keeping health-care costs down
  • The U.S. Bureau of Labor Statistics reports that just 38% of the employees in the hospitality sector had access to health care as of March 2010 compared with 71% across all industries
  • Every state will eventually have an Insurance Exchange as most state lawsuits against health care reform will be settled before Presidential Election

For more:  http://www.hotelnewsnow.com/Articles.aspx/5314/Hoteliers-should-assume-health-care-changes

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by | May 12, 2010 · 6:01 am

Hospitality Industry Health Insurance: New Health Care Law Puts Restaurants, With A Higher Percentage Of Unskilled And Part-Time Workers, At A Disadvantage In Finding Cost-Effective Health Insurance

The new health care law will make it far harder for the restaurant and retail sectors, the primary employers of part-time and low-skill workers, to operate. 
 
Restaurants and drugstores that are open 24 hours a day will be disadvantaged, because they need several shifts of workers to stay open.
 
Firms with more than 50 workers will have to offer the right kind of health insurance, costing no more than 9.5% of the employee’s income, or pay a $2,000 penalty.
 
This will give small restaurants and stores a substantial cost advantage.  It will wreak havoc with franchisees, who frequently own groups of small establishments.  
 
 
(From a GLGroup.com article)   In 2009, 50% of restaurant employees and 36% of retail employees worked part-time, i.e. under 35 hours per week. A higher percentage of women, 58% in the restaurant industry and 44% in the retail industry, work part-time.  
 
With higher-skill jobs, employers can offer the required benefits and pay for them by cutting the wage. But low-wage jobs in the restaurant and retail sectors leave little room for cuts in wages.
 
So firms will have an incentive to become more automated, or machinery-intensive—and hire fewer workers.  Fast food restaurants could ship in more food and have it reheated, rather than cooking it on the premises. Department stores could have fewer sales clerks and more price-scanning stations, so that shoppers could scan labels for prices rather than asking sales assistants.
 
 

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by | April 2, 2010 · 6:48 am

Hospitality Industry Insurance Update: New National Health Law Will Mandate Health Insurance On Hotel And Restaurant Operators With More Than 50 Employees, While Massachussetts Requires Coverage For Businesses With 11 Or More Workers

Don Day is also worried. Day owns eight small businesses in McKinney, Texas, including two restaurants, a boutique hotel and several retail shops.

Although he employs 125 workers, he offers health care for just a few key employees. Just an extra $200 a month per employee for health care could set him back hundreds of thousands of dollars a year — a cost he can’t afford.

“It’s not just me, it’s every small business across this land,” he said. “A lot of small businesses are going to go out of business.”

(From an Associated Press article)   As business owners across the country weigh the new law, they’re looking to Massachusetts for harbingers of things to come.

Massachusetts’ law, which mandates near-universal coverage and requires that businesses with 11 or more workers offer insurance, provided the blueprint for the health law signed by President Barack Obama. Massachusetts employers who don’t comply face annual fines of $295 per worker.

While there’s been plenty of grumbling among business owners that the state law has squeezed them financially during a tough recession, there’s little evidence the law is forcing employers to close or sending them fleeing for the border. Other businesses have welcomed the law and business leaders helped guarantee its passage.

Drawing parallels between the state and national laws is tricky. While both share many of the same tenets — requiring businesses to shoulder more of the burden of health coverage — there are major differences.

The national law doesn’t require businesses offer insurance but hits employers with 50 or more workers with an annual $2,000-per-employee fee if the company doesn’t insure them and the government ends up subsidizing their workers’ coverage.

The national law also grants tax credits for businesses with 25 or fewer workers with average annual wages below $50,000, which Democrats say that will benefit 3.6 million business nationwide. And beginning in 2014, businesses with up to 100 employees will be able to pool their employees in state-created insurance exchanges to increase their negotiating clout with insurance companies — a move supporters say could aid 29 million businesses.

http://www.google.com/hostednews/ap/article/ALeqM5g0ZR7xK3OfnUMkC7pOMMHB6Kl38gD9EPFRI80

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