From CNN’s Money.Com:
Trying to duck health care’s employer rules? Don’t bother
By Jose Pagliery | July 13, 2012: 5:10 AM ET
NEW YORK (CNNMoney) – In the wake of the Supreme Court’s health care decision, several companies with 50 or more full-time workers have embarked on a quest.
Their aim: Get below 50 and dodge the employer mandate. The health reform law forces them to start providing insurance by 2014 or pay stiff penalties.
Kari DePhillips, who co-owns the Content Factory, a public relations firm in Pittsburgh, was hoping she could just break up the company to sidestep the rule. Maybe one firm would do marketing while the other builds websites.
The small company is on pace to exceed the 50-worker threshold in the next few years. DePhillips doesn’t want to provide health care, and she definitely doesn’t want to pay the penalty, which would be $2,000 per full-time worker minus the first 30.
“A $40,000 fine to my company would be catastrophic,” she said.
The only problem with her break-up plan is that it won’t work. The government would still consider both of her companies as one. That’s because the employer mandate penalty relies on “controlled group” provisions, focusing on who controls the company – not necessarily what they do…
After hearing about the little-known rule, DePhillips took another stab at it: Start a second company that never existed as part of the first.
Again, resistance to the rule is futile. The penalty only looks at who owns part or all of the company…
The other way business owners are planning to deal with the law is a devastating one. They plan to cut staff and switch full-time employees to part-time, which the law classifies as less than 30 hours per week.
That’s the reality for the 425 workers at David Barr’s nearly two dozen KFCs and Taco Bells across Alabama and Georgia. Barr has already done the math.
Apparently, they didn’t get an Obama waiver, being in a red state.
He currently provides health care for managerial staff only, and it costs him about $125,000 to cover the 30 who take it. Extending that to every full-timer would cost him another $545,782 a year…
To minimize expenses, he’ll fire workers and cut hours to reduce the number of full-timers to 60. Then he’ll opt for the penalty instead of paying insurance. A $60,000 fine pales in comparison to the huge potential rise in health care costs.
Cashiers would be replaced by self-order kiosks, cooks with chicken breading machines. These options are too expensive now, he said, but they would make sense then…
And this one example is going to be repeated by the hundreds of thousands all across the country. – Do you see now how Obama-Care is going to do wonders for the economy?