Friday, March 26, 2010

How Health Care Reform Will Affect the Restaurant Industry


Despite significant debate and concern among by the majority of Americans, Congress recently passed a health reform bill on a straight party-line vote (possibly cementing it's 11% approval rating).  While portions of the bill are not without merit, noble intentions often have very real consequences.  Complying with the 2,074 pages of government dictates will be time consuming and financially taxing (figuratively and literally). It will be months before it is all understood, and years before it is all implemented.

Much attention has been paid to the projected cost of the bill and the special backroom deals included in the legislation, and there are many key provisions which will directly affect the restaurant industry:

Mandatory Posting of Calorie Content

The bill requires chain restaurants with more than 20 locations to display a "succinct statement concerning suggested daily caloric intake… posted prominently on the menu and designed to enable the public to understand, in the context of a total daily diet, the significance of the caloric information that is provided on the menu." This provision has been applauded by the National Restaurant Association who believe that it is good for consumers and restaurateurs.

Penalties for Companies Who Don't Offer Employee Insurance

Another provision of the bill requires some companies to pay a penalty of $2,000 per employee if they do not offer health care coverage.  The number of part-time workers also comes into play when companies determine whether this must comply with this mandate.  In addition, companies will be fined if they make their employees pay for more than 9.5% of their incomes towards health care coverage and will face the threat of audit if they are not in compliance.  For industries that rely on larger numbers of low-wage, part-time employees, this provision could prove exceptionally onerous.

Fortunately, many of these changes will be phased in over the next several years.  For a full timeline of the bill's provision, click here.  According to CFO Magazine:

"There's the misconception that everything is going to happen at once, and that's not the case," says Chantel Sheaks, head of the government affairs group for Buck Consultants.

Still, "there is nothing in this bill that is going to hold down health-care costs in the short term, and there are some elements that could cause costs to go up," says James A. Klein, president of the American Benefits Council (ABC).

How is your company responding?


Michael Harms | Post a Comment | Email Article

2 comment(s) for “How Health Care Reform Will Affect the Restaurant Industry”

  • james Says:
    health care reform will expand access to high-quality health insurance care.
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