Restaurant Chains Cut Estimates for Health-Law Costs 

Restaurant owners have been fierce critics of the health-care overhaul law, fearing that its mandate for employers to offer insurance more broadly will drive up costs and deter hiring.

Now, some operators say the law may not be that costly after all. They say many employees won't qualify for coverage, and many of those who do qualify will decline company-offered insurance.

Wendy's Co. (WEN) initially estimated the health-care law would increase the cost of operating each of its 5,800 U.S. restaurants by $25,000 a year. But Chief Financial Officer Steve Hare told an investment conference on March 14 that executives have cut the estimate by 80%, to $5,000 a year, primarily because they expect many employees to decline the insurance offering.

"It is still going to be an additional cost that both the company and our franchisees will have to absorb, but we think it is going to be manageable," Mr. Hare said. A Wendy's spokesman said the company continues to refine its cost estimates and it would be "premature" to discuss them further.

Executives of other restaurant chains, including Chipotle Mexican Grill Inc. (CMG), Jack in the Box Inc. (JACK) and Popeye's Louisiana Kitchen, have offered similar cost estimates in recent months.

They say many employees will decline company-offered insurance, either because they can get insurance through Medicaid or a family member, or because they prefer to pay the penalty for not having health insurance. The penalty next year will be as low as $95 next year, much less than most employees will be asked to pay through company-sponsored insurance plans.

wow - that's quite a difference.

estimates are just that - estimates.

everybody running around with the 'sky is falling' mentality needs to take a deep breath!

Originally Posted by: 4PackGirl 

After all the posturing about the financial impact upon businesses and the potential to financial devastate them to the point of reducing services or staffing.. it appears that the impact is being scaled back substantially.

Now the doesn't mean the package is actually going to improve the quality of health care for the workers of this nation.. or make it more affordable or improve their coverage.. but it certainly will not impact the businesses like the fear mongering projected. Basically, the costs will be passed through to the workers that will either see a decline in actual coverage or a overall rise in individual costs. And many will, as notated, just accept the minimal fine and roll without.

But the angst that it is going to fundamentally hurt the business sector greatly.. that was and always will be overstated. Simply provide coverage that is not viable for most and pass the buck. Just now.. the government is more directly backing the gaps.

Originally Posted by: Pack93z 

Er, no.

Big business won't be hurt as much as it claimed. Big business is rarely hurt much by big government. Big business can afford to spread the cost over millions of customers at a time. (An extra penny on a Wendy's burger is trivial to people who eat there.)

The business that will hurt will be small business. And remember, the great majority of businesses (99%+) are companies with less than 100 or so employees. Companies that don't have the luxury of spreading the costs out that way. Companies that are far closer to their individual margins than many think. Far closer.

There''ll always be jobs at the Wendy's of the world.

Heck, there's a good bet there will be more of them than ever.

Whether that is a good thing for the economy or not....well, it'll give us continued opportunities to complain about the unfairness of the gap between rich and poor, I suppose.

Originally Posted by: Wade 

We shall see. I hope you are correct and I am wrong.

Unfortunately, I fear the law of unintended consequences will frustrate your optimism.

But, as I said, I hope that optimism prevails.

We shall see.

Originally Posted by: Wade 

wow - that's quite a difference.

estimates are just that - estimates.

everybody running around with the 'sky is falling' mentality needs to take a deep breath!

Originally Posted by: 4PackGirl 

I live in a place where we have been unaffected by the recession in a way, shape, or form. So I have real problem with wealthy small business owners who don't offer a health care plan with an employee's compensation package, but said employers bitch about not being able to retain quality workers. Because of the oil boom, contractors have had to double wages they use to pay just to entice their workers to stay. The businesses around town aren't crying about providing health care so much as a lack of work force.

Romneycare will have a lot more good than bad when more and more people get the health screenings they use to avoid. Small businessmen will just have to get a little more creative with their budgets. Hell, maybe their income tax bill will go do if their bottom lines are a little more lean. A businessman with real sound ethics wants to provide health care to his employees; afterall, the employees make him what he is not the other way around.

Originally Posted by: DakotaT 

You can blame Home Depot if you want, but that isn't the same as saying that Obamacare isn't impacting jobs, now is it?

Originally Posted by: dfosterf 

''

How about we just watch you and your signature take deep breaths instead? That sounds like a lot more fun.

(grin)

Originally Posted by: Wade 

As I have stated elsewhere, Home Depot cut all of their part-time employees to under 29 hours per week.

The HEADLINES that the mass media put out- "Home Depot to add record number of jobs."

The part-timers were getting 40 hours per week, or very close to it, for months, with a sprinkling of hours reductions every two months or so in order to maintain the "part-time status" of those employees.

There are virtually no full time jobs available at the store level at any Home Depot. "Part time" status employees already made up 66% of the work force prior to this change.

You don't think that this is adversely impacting 10's of thousands of already under-employed workers? Most of those part-timers that had their hours cut are in fact already "under-employed."

Go into your local Home Depot. You will see that the associates on the floor are generally older (I would submit more far more savvy, as well) than your joeblow Walmart Kohls Sears salesperson.

You can blame Home Depot if you want, but that isn't the same as saying that Obamacare isn't impacting jobs, now is it?

Originally Posted by: dfosterf 

Update.


I am one of the 11 part-time associates at my Home Depot that is exempt from the 29 hour work week restriction. I get the 40 I always used to, with the same reduction periodically to maintain my "part-time" status. I have been told that Home Depot will not be fined for me. The other 130 + - are not given more than 29 hours per week.

Home Depot shit-canned the bulk of the massive number of associates they hired in April and March, mostly for my department. (Lawn/Garden/Seasonal).


Loaders, waterers- [70,000 plants- daily- big, big job, we NEVER get a handle on] . freight, Garden recovery (It's a 24 hr/7days a week/ 365 days of year kind of place---"working warehouse")

"Seasonal employment"

They never hired anything approaching what they hired this year, and most of the time in the past, they found a hole for them elsewhere in the store, if they were worth a fuck.

Not this year. It was brutal.

THEN, after shit-canning these people, I walk in back from vacation. I ask this very attractive young lady in outside garden if I can help her. She says, "No, I'm following Dennis around." I don't know what that means, until about a minute later I see a scary-looking-old-guy FNG wearing an orange apron that looks like the professor from the movie "Back to the future" had the professor been doing some serious drugs. The dude is OUT of it. I made the mistake of handing him the blower I was using when a customer needed my assistance. This is how I met him, no words exchanged. I didn't know, but should have, in retrospect, lol- Crazy fuck with a blower- you should have been there, lol He decided that a good use for that blower was to blow the mulch and dirt completely out of the pot of a 189.00 Japanese Maple. I suspected there were issues at that point, lol. COMPLETELY WORTHLESS. I don't want to sound harsh, but this is a business, a big one, and 70,000 plants need water. He probably got 500 of them today, as I type this on a day off.


SHE is his interpreter. SHE is a college-educated, certified, nurse-whatever whose ENTIRE sad job is to walk around the outside garden department while this nut-job waters. I tell her what I need Dennis to do, she explains it so he can understand. She's a social worker or somesuchshit, not paid by the Home Depot--she shops. Paid by YOU, as a taxpayer. Remember, this dude (and her) just cost some guy/gal their JOB.

Nice.

Originally Posted by: dfosterf