President Barack Obama’s reelection does many things, though few are as certain as solidifying the Affordable Care Act, or Obamacare, as a mainstay in the nation’s health care system.
While the new system is set to benefit millions, it will not come without some increased costs, namely to businesses that are now required to provide health insurance to their low-income employees.
It works like this: businesses who employ more than 50 workers who are either not paid enough to afford their own health insurance, or are not already under a group health insurance plan, will now be forced to pay about 2,000 dollars in taxes per worker. This is in order to offset the subsidies that the government will provide to these workers so that they will be able to afford their new insurance plans, according to the act.
This has caused some unrest within the restaurant business, namely among national chains that employ a large amount of workers across the country.
John Schnatter, founder and CEO of Papa John’s Pizza has been among the most vocal in speaking out against the new laws. He said Obamacare will cost his business an additional $5 to $8 million annually, and that he will need to charge an additional 10 to 14 cents per pizza to offset this loss.
In order to find a loophole in having to pay the health insurance, Schnatter had also initially threatened to cut employee work hours — to below 30 hours a week — so that the pizza franchise could avoid having to pay for their employees health insurance, as the law only applies to full-time workers.
Due to strong negative feedback, he has since stated that Papa John’s never intended to actually do so, saying instead that it was what he believed smaller businesses and franchises would do to avoid costs.
While such price hikes have the potential to drive some customers away, Penn State student Yasser Mahmoud (junior-art) said he is understanding of the situation and will likely continue eating at these restaurants if he feels so inclined.
“It’s a tough position for a chain to be in,” Mahmoud said. “You have to realize that for companies that large, the little shifts in costs add up very quickly, and so it comes down to profit margin, which for a lot of these restaurants, aren’t as big as we think.”
Luke Synnestvedt (freshman-risk management enterprise) said he would also likely remain undiscouraged from eating at restaurants with increased prices, as he noted that the 5 percent hike isn’t exactly what he would consider a significant change.
Nevertheless, Synnestvedt said he remained angered by the situation, upset mainly by the fact that it wasn’t ever his choice to pay for others healthcare, having not voted for Obama in the election.
“I personally think it’s unfair,” Synnestvedt said. “I just don’t think that I should have to be forced to subsidize health insurance for other people.”
Hunter Walker (sophomore-information, sciences and technology) also said that he considers himself opposed to the act, though he can recognize the benefits Obamacare will bring to those who were previously unable to afford insurance.
Principally his concern lies with the businesses that will incur additional costs under the new laws, rather than the additional strain it will put on his wallet while eating out.
“I see how receiving insurance could be a strong incentive for people who need it to enter the workforce,” he said, “but ultimately, I still think that it puts an unfair strain on businesses, many of whom didn’t ask for it.”
The Associated Press contributed to this report.
