Business owner explains how just ObamaCare will cut his profits in half

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Business owner explains how just ObamaCare will cut his profits in half

Post by TexasBlue on Fri Sep 14, 2012 8:25 pm

Franchisors warn Obamacare will halve profits

Paul Bedard
Washington Examiner
September 13, 2012


The International Franchise Association held a convention in Washington this week where most of the Radio Shack, Dunkin Donuts, Curves and other franchisers were grumbling about new federal regulations, especially the impact of Obamacare.

Most, said Atlanta Taco Bell and Kentucky Fried Chicken franchiser David Barr, presumed that the reports about how hard Obamacare will hit them were overblown. "They had their head in the sand," he told Secrets.

That is until he pulled out his powerpoint showing how funding Obamacare will cut his--and likely their--profits in half overnight. With simple math the small business folks understood, he spelled out that their only choice is to slash employee hours so they aren't eligible for company-paid health care or stop offering insurance and pay the $2,000 per employee fine.

Barr has 23 stores with 421 employees, 109 of whom are full-time. Of those, he provides 30 with health insurance. Barr said he pays 81 percent of their Blue Cross Blue Shield policy, or $4,073 of $5,028 for individuals, more for families, for a total bill of $129,000 a year. Employees pay $995.

Under Obamacare, however, he will have to provide health insurance for all 109 full-time workers, a cost of $444,000, or two and half times more than his current costs. That $315,000 increase is equal to just over half his annual profit, after expenses, or 1.5 percent of sales. As a result, he said, "I'm not paying $444,000."

Providing no insurance would result in a federal fine of $158,000, $29,000 more than he now spends but the lowest cost possible under the Obamacare law. So he now views that as his cap and he'll either cut worker hours or replace them with machines to get his costs down or dump them on the public health exchange and pay the fine. "Every business has a way to eliminate jobs," he said, "but that's not good for them or me."

But that's not all. His experience tells him that most low-wage workers he would have to cover under Obamacare won't take it because their $995 share is too high, meaning those the program was set up for won't see any benefit. And those who do will because they have major health issues, likely resulting in higher premiums to him.


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“I’m not in favor of fairness. I’m in favor of freedom, and freedom is not fairness. Fairness means somebody has to decide what’s fair.” - Milton Friedman
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Re: Business owner explains how just ObamaCare will cut his profits in half

Post by Mark85la on Fri Sep 14, 2012 9:40 pm

I have no idea how this will be repealed, seems to be a long shot..
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Mark85la



Birthday : 1985-12-02
Age : 32

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Re: Business owner explains how just ObamaCare will cut his profits in half

Post by TexasBlue on Sat Sep 15, 2012 5:08 am

I would agree.


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“I’m not in favor of fairness. I’m in favor of freedom, and freedom is not fairness. Fairness means somebody has to decide what’s fair.” - Milton Friedman
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