|Health Care Reform|
Article by Gloria Dawson, NYS Restaurant Association Contributor
Its official name is the Affordable Care Act, but it’s also been referred to as Obamacare, labeled as overreaching and heralded as groundbreaking. Whatever it’s called, restaurant owners and operators are keenly aware that it could mean big changes to the way they do business.
"This law impacts this industry almost like no other,” said Michelle R. Neblett, the National Restaurant Association’s Director of Labor and Workforce Policy.
Neblett spoke at a seminar organized by the New York State Restaurant Association at the New York Institute of Technology on Wednesday, January 30, which covered the federal healthcare impacts and implementations for restaurants. Along with Neblett, two employee benefits lawyers from Jackson Lewis LLP spoke to a group of New York City restaurant representatives on the new law, which states, among other provisions, that companies with more than 50 employees must offer care to their full-time staff or be subject to fines. Although the law doesn’t go into effect until 2014, it has processes that employers must begin implementing as early as October 1st of this year.
So where to begin?
Neblett and Melissa Ostrower, one of the lawyers from Jackson Lewis, first walked the audience through the process of determining if a restaurant qualified as an applicable large employer, which would mean a requirement to offer health care to full-time staff. Unfortunately it’s not as simple as counting employees. Interests in different restaurants, family ownership and multiple locations come into play and can factor into the government’s determination of the size of the business. Establishing a restaurant’s status requires a "pretty complicated calculation,” said Neblett.
Adding to that complication: Calculating tips and seasonal employee hours as well as the quick turnover rates and immigration issues common in restaurants make the determination as well as the implementation of this law uniquely problematic for the industry. Neblett stressed that the seminar was just an introduction to the topic and owners would have to speak to their tax advisers and should try to stay abreast of this changing law.
If employers determine that they are an applicable large employer, they must compute how much they can fairly charge employees for health insurance premiums. The law mandates a maximum of 9.5% of household income–a number employers can’t get their hands on, just one of the many twists in this complicated law. Neblett recommends using the employees’ wages to calculate this number instead.
The next step for restaurants is to develop a communication strategy and to account for how IT and third party vendors might be affected by this law. Will you need to deduct insurance payments from employees’ paychecks? Can you calculate employee hours so that part-time workers aren’t clocking in longer hours that could trigger full-time status and thus require an offer for insurance.
"We’re all just floundering around, and we needed a bench mark to know where to start,” said Yvette Feinberg, the Director of Human Resources for Benchmarc Restaurants by Marc Murphy, after the seminar.
Although this is just the start, and the 2014 start date might seem like miles away, by October 1st employers must start insurance open enrollment for full-time employees. This law, it would seem, is looming large.