David Dillon, chief executive of the Kroger supermarket chain, told the Financial Times that some companies might opt to pay a government-mandated penalty for not providing insurance because it was cheaper than the cost of coverage.
Nigel Travis, head of Dunkin’ Brands, said his doughnut chain was lobbying to change the definition of “full-time” employees eligible for coverage from those working at least 30 hours a week to 40 hours a week.
Some restaurants, including Wendy’s and Taco Bell franchises, have explored slashing worker hours so fewer employees qualify for health insurance, arguing that they cannot afford the additional healthcare costs. Other businesses are deliberately keeping headcounts below 50.
The penalty for not providing coverage is $2,000 per worker. According to the Kaiser Family Foundation, a non-partisan policy group, the average annual cost to employers of insurance is $4,664 for a single worker and $11,429 for a family.
Companies with more than 50 workers have to pay a penalty if they do not provide full-time employees with health insurance. The employees can instead buy private coverage subsidised by the government on new insurance exchanges.
Not Even Labor Unions Want It
If it's costly for businesses, labor unions must like it. Right? Wrong.