California AB 880: “This bill would make it unlawful for a large employer to, among other things…reduce an employee’s hours or work…if the purpose is to avoid the imposition of the penalty. A violation of those provisions would result in a penalty of 200% of the penalty amount the employer would have paid for the applicable period of time.”
ObamaCare’s employer mandate is off to a disastrous start even before it kicks in. The CBO has already scored the measure to cost employers $150 billion in draconian excise taxes over the next eleven years, and there’s no telling how much the compliance costs will total. Most employers are in no position to shoulder this burden. How have they responded? For many, the only hope has been to reduce employees’ hours because the employer mandate and its associated penalty taxes apply only to employees who average at least 30 hours per week. Regal Entertainment Group recently announced that it would join the long line of mega-sized employers to be reluctantly forced down this road.
Last night during a joint session of Congress, President Barack Obama gave his fifth the State of the Union address where he laid out his agenda for the next year. As was anticipated, the speech carried over the Leftist themes of last month’s inaugural address and was more aggressive in tone.
Despite recent GDP numbers showing that the economy contracted in the last quarter of 2012, President Obama started off the hour long speech by repeat a familiar line, explaining that “[t]ogether, we have cleared away the rubble of crisis, and can say with renewed confidence that the state of our union is stronger.”
After a couple of shots at Congress, President Obama spent a few minutes discussing the sequester, claiming that “both parties have worked together to reduce the deficit by more than $2.5 trillion – mostly through spending cuts, but also by raising tax rates on the wealthiest 1 percent of Americans.” Obama claimed, “we are more than halfway towards the goal of $4 trillion in deficit reduction that economists say we need to stabilize our finances.”
If only that were true. In Cato Institute’s response to the State of the Union address, Michael Tanner explained, “Let’s be absolutely clear — there have been no spending cuts under this President.”
In 2010, the first year that this President was responsible for the budget, the federal government spent $3.4 trillion,” noted Tanner. “Last year, the federal government spent $3.5 trillion, and for the first four of last year, we’re spending at a fast pace than the first four months of last year.”
There have already been a number of stories written on the effects of ObamaCare on many small businesses. Perhaps no enterprise has felt the impacts of the law worse than the restaurant industry.
ObamaCare requires employers with over 50 employees to offer insurance coverage to those who work 30 hours or more, which is considered to be “full-time” under the law, or otherwise pay a $2,000 fine per worker. This is known as the “employer mandate.” Opponents of ObamaCare warned that this mandate would hurt investment and many workers, who would either lose their jobs or face scaled back hours. Supporters of the law obviously didn’t care enough listen.
Last week, the Wall Street Journal highlighted the plight of restaurant franchisees who are struggling to remain profitable as the realities of ObamaCare hit their businesses:
Sam Ballas, chief executive of ECW Enterprises Inc., owner of East Coast Wings & Grill, a 26-unit chain in North Carolina and Texas, in March imposed a three- to five-unit limit, for the time being, on the number of restaurants that franchisees can own, because of worries about health-care costs.
Mr. Ballas said several East Coast Wings franchisees are up against that limit now and that one is considering selling a restaurant to remain below the threshold.
Capitalizing on the frustration congressional Democrats have recently expressed over rising health insurance premiums and the Obama Administration’s implementation efforts of ObamaCare, the House Republican Conference rolled out a new video on Thursday that highlights the headlines showing slashed hours and job losses that have come as a result of the law. This is the primary reason, outside of the recent IRS scandal, that House Republicans have pursued repeal of ObamaCare.
After rolling though the headlines, the video asks, “How many more jobs will ObamaCare cost?” It’s a question worth asking because, to this point, ObamaCare has been a nightmare for employers and there are no signs that the consequences of the law are letting up.
With all the excitement over the comeback of the TV show, Arrested Development, the trailer for which was just recently released, the House Republican Conference has come up with a humorous parody of the show featuring a “dysfunctional Democratic majority.”
The video features President Barack Obama, ex-House Speaker Nancy Pelosi (D-CA), and Senate Majority Leader Harry Reid (D-NV), all of whom pushed for passage of ObamaCare, and notes that the law is causing insurance premiums to rise and causing employers headaches. It also highlights the doubts about ObamaCare now being expressed by members of their own party:
Imagine that in 2012 you quit your job and poured all your savings into opening a restaurant that had 18 full-time employees and 15 part-time employees. The restaurant was a success. In 2013, you opened a second restaurant based on the same model and with the same number of employees. Another success. Your restaurants were profitable enough for you to take a salary of $60,000 in 2013. You decide to open a third restaurant in 2014.
Your third restaurant opens January 1, 2014 with the same number of employees as the first two. Based on your track record of success, you expect to be able to take a salary of $90,000 in 2014. But that was before you realized how ObamaCare can swallow your profits.
You’ve read and heard industry rumblings that ObamaCare’s employer “shared responsibility” rules require employers to provide coverage to full-time employees if you employed at least 50 full-time employees in the prior year. You had only 36 full-time employees in 2013. Regardless, you already offer coverage to your full-time employees, so you don’t worry about it. You instead work long hours with very few days off to establish your new third restaurant.
You receive notice from the IRS that you are subject to an ObamaCare penalty excise tax of $5,000 for January. Why? You failed to account for your part-time employees in 2013 when determining whether you are an “applicable large employer” subject to the new employer mandate. The rules require employers to aggregate all part-time employees into “full-time equivalents.”
Universal Orlando, a frequently visited Florida theme park, announced yesterday that they will no longer offer health insurance coverage to part-time workers, becoming the latest employer to make moves to avoid the costs of ObamaCare:
The giant theme-park resort, which generates more than $1 billion in annual revenue, began informing employees this month that it will offer health-insurance to part-timers “only until December 31, 2013.”
The reason: Universal currently offers part-time workers a limited insurance plan that has low premiums but also caps the payout of benefits. For instance, Universal’s plan costs about $18 a week for employee-only coverage but covers only a maximum of $5,000 a year toward hospital stays. There are similar caps for other services.
Those types of insurance plans — sometimes referred to as “mini-med” plans — will no longer be permitted under the federal Affordable Care Act. Beginning in 2014, the law will prohibit insurance plans that impose annual monetary limits on essential medical care such, as hospitalization, or on overall spending.
Universal Orlando joins the State of Virginia and several restaurants, hotels, and retailers that have taken measures, by either slashing hours or no longer offering coverage, to avoid the costs of ObamaCare. Remember what President Obama said during the debate over ObamaCare — that if you like your coverage, you can keep it. Here is yet more proof that he was lying to you.
Rasmussen has a new poll out today showing that 54% of Americans support raising the minimum wage to $9 an hour. While this latest part of President Obama’s agenda may give people a warm and fuzzy feeling — because, after all, who doesn’t want to “reward an honest day’s work with honest wages,” as President Obama put it in his State of the Union address — the economics behind the minimum wage don’t make much sense.
Julie Borowski has a new video out this week explaining why the minimum wage ultimately hurts the very people its intended to help. Listen up, folks:
Not only has the IRS issued a shocking new report stating that the cheapest plan under ObamaCare would cost a family $20,000 by 2016, another point highlighting the negative impact this law will have is a new report released yesterday by the Congressional Budget Office (CBO).
The non-partisan congressional agency estimates that some 7 million Americans will lose their employer-based coverage as businesses opt to pay the cheaper penalty rather than continuing to provide health insurance benefits:
President Obama’s health care law will push 7 million people out of their job-based insurance coverage — nearly twice the previous estimate, according to the latest estimates from the Congressional Budget Office released Tuesday.
CBO said that this year’s tax cuts have changed the incentives for businesses and made it less attractive to pay for insurance, meaning fewer will decide to do so. Instead, they’ll choose to pay a penalty to the government, totaling $13 billion in higher fees over the next decade.
According to the Washington Times, the CBO also noted that the law will cost $1.165 trillion over the next 10 years.