Thursday, November 15, 2012

Denny's Offers New Menu

John Metz operates about 40 Denny's restaurants in Florida. With full implementation of ObamaCare in January 2014 and partial implementation in January 2013, his employees' work hours will have to be reduced and a 5% surcharge added to the price of a meal to pay for the expense of the government health market takeover. The alternative is to close stores and fire workers.

Metz will hold meetings at his restaurants in December to tell employees,
"that because of Obamacare, we are going to be cutting front-of-the-house employees to under 30 hours, effective immediately. ... I think it's a terrible thing. It's ridiculous that the maximum hours we can give people is 28 hours a week instead of 40. It's going to force my employees to go out and get a second job."

Obamacare requires businesses or franchises with more than 50 workers must offer an approved insurance plan or pay a penalty of $2,000 for each full-time worker over 30 workers.

The program mandates that only employees working more than 30 hours a week are covered under their employers health insurance plan, chains like Olive Garden and Red Lobster are already considering reduced worker hours.
Metz is not anti-insurance or even anti-employer provided insurance.
His current coverage for full-time employees costs him $5,000 to $6,000 annually, he said. "Obviously, I'd love to cover all our employees under that insurance," he said, "But to pay $5,000 per employee would cost us $175,000 per restaurant, and unfortunately, most of our restaurants don't make $175,000 a year. I can't afford it."
Paul Fronstin, director of the health research program at the Employee Benefit Research Institute in Washington objects, "Instead of indirectly charging customers by raising prices, he is directly charging and making a political statement." Fine, Mr. Fronstin, but isn't that the same result - the customer pays the added expense? And why shouldn't Metz make a political statement if a stupid political policy threatens his livelihood and that of his employees?

Apple Metro and Jimmy John's restaurants have already told employees their work hours will be cut to part-time to avoid the huge ObamaCare fees and massive layoffs while Olive Garden and Red Lobster are considering the same or similar actions. Papa John's Pizza has also told shareholders earlier this week ObamaCare will cost the company 11 to 14 cents per pie, a cost that would be passed on to consumers.

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