Healthcare SOS: Time to take action on Obamacare
To read last year’s entire Healthcare SOS series, visit www.franchisetimes.com.
Conservatives worried about government overreach might cite George Orwell’s “1984” as a textbook example. But Obamacare, arguably one of the largest federal expansions in recent history, has played out more like a Three Stooges movie.
It was delayed, then delayed again. The healthcare.gov website crashed right from day one. Early this year, the top official on the project stepped down after dramatically over-counting enrollment numbers. And twice, the Affordable Care Act went before the Supreme Court.
The confusion, the politics and the delays led some franchisees to feel uncertain. Rick and Gloria Plaisted own Duluth, Minnesota-based Son Group, a Dairy Queen franchisee that was right on the cusp of having 50 full-time equivalent employees, and the looming ACA made them reconsider expansion.
“We basically shut down growth,” Plaisted wrote in an email. “Because we didn’t know what we were growing into.”
But with the latest Supreme Court challenge firmly in the rearview mirror, the Affordable Care Act is now, finally, here to stay. Companies with 100 or more full-time equivalent employees have to offer insurance to at least 70 percent of their full-time workers this year. In 2016, that number leaps to 95 percent, and companies with 50 or more FTE employees are on the hook, too. With denial, anger, bargaining and in some cases depression out of the way, franchisees are moving on to acceptance.
‘A pretty good plan’
Jerry Lillie is the owner of Spokane, Washington-based Sisbro Limited Partnership, which owns 23 Cost Cutters and SuperCuts hair salons in Washington and Idaho.
Faithful readers will remember him as the subject of our very own Sherlock Holmes mystery “The Case of the Missing 75 percent,” an installment in our year-long series in 2014 called Healthcare SOS. Lillie was worried at the time about whether he would even be able to get a health plan if he didn’t have enough employees who wanted to enroll. It’s been an administrative headache, but he says he’s finally settled on a plan that works.
“With a group of young employees who really aren’t interested in helping to pay for insurance, it’s been a time-consuming mess for us,” Lillie says. But “we got a group health plan, a pretty good plan.”
Some see cost increases
Out of 115 employees, 83 were eligible for insurance. Of those, 54 said they preferred to get insured elsewhere, 11 said they didn’t want any insurance, and 17 signed up. Lillie says at $278, the monthly premiums are lower than previous plans he’s purchased, so the ACA is actually saving him money.
“We paid more per person and more total” in the past, Lillie says. “I think I can remember $350, close to $400.”
But others have seen significant cost increases as a result of the ACA. Katrina Wyand-Yurish is the HR director for Frederick, Maryland-based Roy Rogers Restaurants.
She runs the company’s corporate stores and consults with franchisees, and says complying with the act meant over $50,000 a year in additional overhead—to say nothing of the price of the policies.
“A lot of it is the expense and the ongoing monitoring to ensure that a person meets the eligibility requirements,” Wyand-Yurish says. “I’ve added an additional HR person.”
This administrative burden is one battle lobbyists are still fighting. As the vice president of healthcare policy for the National Retail Federation, Neil Trautwein is advocating for simpler reporting requirements and a return to the definition of full-time as 40 hours a week.
“Let’s make it easier for businesses,” Trautwein says. “It’s needlessly complex.”
This January, the U.S. House actually passed a resolution defining the full-time work week as 40 hours (it is 30 for ACA purposes). But the bill failed in the Senate, and not everyone in franchising is convinced there needs to be a change. Wyand-Yurish says her company considers full-time to be 34 hours.
“I think a lot of companies have different hours,” Wyand-Yurish says. “I came from a banking environment and our full-time was 37 and a half. I know other companies where their full-time status is 32.”
Scott Sinder is a partner and chair of the Government Affairs and Public Policy Group at Washington, D.C.-based law firm Steptoe & Johnson. As external counsel for the National Association of Convenience Stores, he represents franchisees, franchisors and independents. He says beyond the reporting requirements, he’s concerned with the excise tax on larger benefits packages and with provisions that may make it difficult for companies to offer high-end health plans to higher-level executives.
But wherever the fight goes from here, the Affordable Care Act stands. The law is firm—now it’s just a matter of working out the fine points.
“I don’t see any legal challenge coming down the pike that is as fundamental,” Sinder says. Now people need to “shift to the details.”