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InsiderOnline Blog: November 2012

ObamaCare Adds $1.79 Per Hour to Labor Costs

If you are wondering why Denny’s, Papa John’s, Applebees and other restaurants are cutting jobs or shifting to part-time employees, here is the answer, from Betsy McCaughey:

If you get your health insurance through a job, you might lose it as of Jan. 1, 2014. That’s when the new “employer mandate” kicks in, requiring employers with 50 or more full-time workers to provide the government-designed health plan or pay a fine. The government plan is so expensive, it adds $1.79 per hour to the cost of a full-time employee. That’s incidental if you're hiring neurosurgeons but a hefty increase for hiring busboys and sales clerks.

Currently, employers in retail and fast-food industries pay less than half that to cover their workers. To avoid the costly mandate, some employers will push workers into part-time status. Other employers will opt for the fine. Either way, workers lose their on-the-job coverage.

Worse, they risk losing their jobs. Even the fine adds 98 cents an hour to the cost of labor, enough to make some employers cut back on their workforce.

As many as a third of employers are considering canceling coverage, according to McKinsey & Co. management consultants. [New York Post, November 12]

Posted on 11/16/12 02:51 PM by Alex Adrianson

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