A major part of President Obama’s Affordable Care Act requires employers with more than 50 employees to offer health insurance to full-time employees. This is stirring up a lot of controversy among business owners, and Papa John’s Pizza CEO, John Schnatter recently spoke about how this part of the law will affect his business. According to the ABC News article by Amy Bingham, Schnatter let his investors know that as health care reform takes effect, the price of a large pizza will be going up by about $.14. He made it clear that the costs of health care reform will be passed onto the customers to protect their shareholders.
There was some interesting backlash on Schnatter’s stance as some customers showed their distaste for the fact that the company doesn’t already offer employer-sponsored health insurance to some of their employees, and they went on to say they’d be happy to pay such a small amount if it meant Papa John employees would have better health care. One Facebook commenter posted that she was taking her business elsewhere. Schnatter may not have been expecting such pushback but he went on to clarify that they do understand the importance of healthcare to their customers.
Interestingly enough, Papa John’s is one of the lowest ranked when looking at providing employees health insurance. According to the Kaiser Family Foundation, Papa John’s Pizza only insures about 77% of the workforce as of 2010 and it’s one of the lowest in the industry. Some people think Papa John’s is overreacting to the law since 80% of the company’s restaurants are independently owned franchises and if a particular franchise does not have over 50 employees then they do not have to offer health insurance.
It does beg the question though, should employers offer health insurance to all of their full-time employees? Many Americans view this as a common sense benefit that should be offered to all employees, but many employers disagree. Some cannot afford the extra costs and some do not have the labor available to manage such a large benefit. Soon they may have no choice in the matter.
The Affordable Care Act is only requiring that employers offer health insurance to their full-time employees and about 90% of large companies already do this according to a Treasury Department official. If Papa John’s chooses not to offer health insurance to the required individuals they face a $2000 fine for each employee beyond the first 30 workers. The definition of full-time could get tricky as the law does state it is defined as over 35 hours in a week. Angelo Amador, the vice president of Labor and Workforce Policy at the National Restaurant Association points out that the bulk of costs under the Affordable Care Act will come from restaurants being required to offer health insurance to their previously part-time employees.
