It looks like retailers and tanning salons are not the only businesses to be adversely affected by Obamacare; restaurants will take a hit as well. Cleveland Plain-Dealer reports that one provision of the new health care law could cost White Castle, a Columbus-based chain specializing in hamburger sliders, roughly 55% of its net yearly income after 2014: "Starting that year, the bill levies a $3,000-per-employee penalty on companies whose workers pay more than 9.5 percent of household income in premiums for company-provided insurance."
White Castle currently pays between 70 and 89 percent of employees' premium costs, so the company anticipates a heavy price tag to comply with the law and says the provision will make it difficult to maintain its 421 restaurants nationwide. Does everyone agree with this prediction? Definitely not. According to the same article, the American Federation of State, County and Municipal Employees union "questions White Castle's calculations." Their spokesperson, Steven Kreisberg, claims White Castle will be saving money while they're paying the penalty since some workers will opt for federal coverage and spare the company from having to pay insurance for those individuals. That may be true, but what happens if there is a mass migration of young, healthy employees out of the company insurance plan and into the federal exchange? Wouldn't that drive up costs for White Castle since they no longer have as many "healthy" people in their plan? It's almost guaranteed to be a no-win situation because they will have to pay a penalty either way: the aforementioned $3,000 fee and/or a $2,000-per-employee fee if workers end up going with federal coverage.
How can the Obama Administration continue to make the argument that this health care "reform" will be good for small businesses and overall job creation? The numbers just don't add up. Will uncertainty surrounding the law diminish as details and timelines are ironed out in the coming months? Maybe, but don't hold your breath.