- 8,707
But Obama said as later as last night in the debate that if you like your plan you can keep it....never clarified what you do when your employer ceases offering the "plan you like" due to the fundamental changes Obama has ushered.
Sears/Darden- Getting Rid of Group Plans
- Thread starter Yagents
- Start date
- Thread starter
- #12
Darden is dropping employee hours to 28 a week, just under 30 to avoid the penalty. Expect to see more of the same. Nice job O' (pun intended)
Restaurant Chain Cuts Hours to Avoid Obamacare Costs
Restaurant Chain Cuts Hours to Avoid Obamacare Costs
Yep, as reported by the Chicago news station... Darden is going to follow Sears' strategy... until they figure out a way around doling out 3K per employee. Restaurants do not operate on the margin to be offering the perks and freebies that are customary elsewhere.
Darden's experiment will be interesting to watch. On one hand most of these folks [restaurant employees] aren't covered today so they wouldn't miss the coverage, on the other hand how long will it take for Congress to seal up the tactic of reduction of hours to bypass the law...? Also, will these companies be able to retain their employees with lower number of hours...? Destabilization of multiple markets ahead.
- 15,041
So how long is this going to last, restaurant employees having multiple jobs to make ends meet? Except for the college students, a lot of employees at restaurants are working more than 50+ hours a week. Either at one restaurant or among multiple. Limit them to 28 hours a week, and now they need one more job in addition to what they have.
Plus restaurant managers are going to hate it. They have a hard enough time filling the schedule as it is due to the unreliability of their employees. Tell them they need to add another 40 employees just to fill the schedule? Watch for the backlash.
- Thread starter
- #15
I posted this in political forum, but maybe we now know why 20-24 yr olds got jobs:
Jobs report distortion from Joe Lavorgna at Deutsche Bank who is not partisan:
"The 70% rise in household employment was in part time workers, and the the 20-24 yr old age group posted in second largest gain in 64 yrs. These two anecdotes hint of possible election year distortion"
Those 20 yrs olds getting $7/hr will turn this economy around.
Read more: Insurance Forum
Jobs report distortion from Joe Lavorgna at Deutsche Bank who is not partisan:
"The 70% rise in household employment was in part time workers, and the the 20-24 yr old age group posted in second largest gain in 64 yrs. These two anecdotes hint of possible election year distortion"
Those 20 yrs olds getting $7/hr will turn this economy around.
Read more: Insurance Forum
supersupps
Guru
- 534
For the Sears/ Darden workers, didnt the WSJ article state that one wholesaler was the one that both contracted with for their workers?
My brother-in-law has 25 years experience in upper management (including holding a VP position) of very large chains of restaurants. He said the profit margin is so tight in that business that they have no choice but to go under 30 hours for most of the staff due to the $3,000 penalty in PPACA in 2014.
There are 4 ways they could go about it, since they know that the majority of the restaurant workers will qualify for a subsidy.
The first is to increase the employer contribution to the health plan to make it "affordable" in PPACA's terms. That means at the high end an employee must pay less than 9.5% of their income for health benefits. But there's a grading scale to that meaning that it's far less than 9.5% for many employees. That would be a costly employer contribution to the premium.
The 2nd way is to let those employees go to the exchange and get their subsidies at a $3,000 penalty per employee. Since restaurants have such high turnover, a staff of 100 employees may actually require a lot more workers to be trained to replace those leaving. So to staff for 100 workers may actually require 120 workers, for instance, due to high turnover.
The 3rd way is to get rid of the group health plan and pay the $3,000 penalty, which lowers premium enough to help pay for the penalty, but that leaves higher earners (like management) without a health plan. Let's do some math. If there are 100 active employees on a health plan in any given month at a premium of say $4800 a year ($400 a month) that's $480,000 in premium. If there are 120 (due to high turnover) for whom the employer pays a penalty of $3,000 per year, that's $360,000. Insure them all, or pay almost as much and get no group health plan?
The 4th way is to put most workers on part-time status, so they won't be eligible for the group health plan. They calculated that the extra management costs for that idea were FAR less than any of the other methods.
Congratulations, Pelosi. Job well done!
There are 4 ways they could go about it, since they know that the majority of the restaurant workers will qualify for a subsidy.
The first is to increase the employer contribution to the health plan to make it "affordable" in PPACA's terms. That means at the high end an employee must pay less than 9.5% of their income for health benefits. But there's a grading scale to that meaning that it's far less than 9.5% for many employees. That would be a costly employer contribution to the premium.
The 2nd way is to let those employees go to the exchange and get their subsidies at a $3,000 penalty per employee. Since restaurants have such high turnover, a staff of 100 employees may actually require a lot more workers to be trained to replace those leaving. So to staff for 100 workers may actually require 120 workers, for instance, due to high turnover.
The 3rd way is to get rid of the group health plan and pay the $3,000 penalty, which lowers premium enough to help pay for the penalty, but that leaves higher earners (like management) without a health plan. Let's do some math. If there are 100 active employees on a health plan in any given month at a premium of say $4800 a year ($400 a month) that's $480,000 in premium. If there are 120 (due to high turnover) for whom the employer pays a penalty of $3,000 per year, that's $360,000. Insure them all, or pay almost as much and get no group health plan?
The 4th way is to put most workers on part-time status, so they won't be eligible for the group health plan. They calculated that the extra management costs for that idea were FAR less than any of the other methods.
Congratulations, Pelosi. Job well done!
This problem could have been anticipated if the folks in Congress had any business experience and acumen. Of course most laws written by Congress, including tax changes, fail to take in to account human nature.
When Congress tries to drag groups in one direction that group reacts by changing their patterns.
This was clearly demonstrated when the Clinton 1993 retroactive luxury tax on yachts and private airplanes was imposed. The tax was eventually repealed but not before irreparable damage was done to the boating industry.
Yacht Luxury Tax 1993 | Yacht dealers await repeal of luxury tax Levy has squeezed a hurting industry - Baltimore Sun
It would also help if they had read the bill before they passed it . . .
When Congress tries to drag groups in one direction that group reacts by changing their patterns.
This was clearly demonstrated when the Clinton 1993 retroactive luxury tax on yachts and private airplanes was imposed. The tax was eventually repealed but not before irreparable damage was done to the boating industry.
Yacht Luxury Tax 1993 | Yacht dealers await repeal of luxury tax Levy has squeezed a hurting industry - Baltimore Sun
It would also help if they had read the bill before they passed it . . .
- 3,352
Ha ha ha ha....Read the bill? Too late ! Now we are all stuck with Obama's poopie diaper healthcare bill stink. Gotta love the stench.
- Thread starter
- #20
Ruh roh, Looks like Obamacare is hurting income AND 200 jobs at BCBS TN:
BlueCross BlueShield of Tennessee cutting 100 jobs - Nashville Business Journal
Specifically, the release cities the Affordable Care Act's medical loss ratio (MLR) restriction and new $200-million-plus annual excise tax that BlueCross will have to pay starting in 2014.
BlueCross BlueShield of Tennessee cutting 100 jobs - Nashville Business Journal
Specifically, the release cities the Affordable Care Act's medical loss ratio (MLR) restriction and new $200-million-plus annual excise tax that BlueCross will have to pay starting in 2014.
Similar threads
