Denny's Restaurant Franchise Owner to Add Obamacare Surcharge to Customers' Bills

Denny's Restaurant Franchise Owner to Add Obamacare Surcharge to Customers' Bills

Denny's Restaurant Franchise Owner to Add Obamacare Surcharge to Customers' Bills

John Metz, a Denny's restaurant franchise owner, to add Obamacare surcharge to customers' bills. He also plans to cut employees' hours to offset costs of the upcoming health insurance policy.

Published November 15, 2012

A Florida businessman who owns 40 Denny's restaurants has announced that he's going to start tacking on the extra costs of the upcoming Obamacare program right onto his customers' bills starting in January 2014.

John Metz, who also owns Dairy Queen franchises, told the Huffington Post that a 5 percent surcharge along with reducing his employees' hours will be necessary to help pay for the new mandated health care policy that will be implemented in the new year.

The Affordable Care Act requires businesses with more than 50 employees to provide adequate health insurance plans, otherwise employers will be fined $2,000 for each full-time worker over 30 employees.

The Huffington Post writes:

"Despite the one-two hit his employees might take with possibly fewer hours and lower tips, Metz said he is not anti-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.'

Currently, the law states that employers with more than 50 full-time equivalent employees will be charged a penalty for any employees over 30 full-time employees that they don't cover. Several employers have cited that provision -- including Darden Restaurants, Papa John's, Apple-Metro and Jimmy John's -- in announcing plans to skirt the law by cutting employees' hours to make them part time.

Metz said he will take the extra step of adding a surcharge because he believes the law will eventually expand to include penalties for not covering full-time equivalent employees. If he has to pay a penalty for his average 35 full-time equivalent employes per restaurant, he said it would cost him $75,000 per location. In that case, he said raising prices wouldn't be an option, since he'd have to raise prices about 25 percent to cover the costs of Obamacare, which would be 'catastrophic' for his business."

Read the entire story here.

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(Photo: Wikicommons)

Written by Dorkys Ramos


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