Small Restaurants Bracing To Absorb ACA Hidden Compliance Costs
By Christine Kern, contributing writer
Actual impact of ACA on industry still under debate
Despite a respite for smaller businesses that allows them to delay offering healthcare coverage to employees until 2016, employers with over 50 fulltime employees must begin tracking health care coverage-related employee data in January 2015 – whether they offer coverage or not. They will be required to submit their reports to the IRS in early 2016.
This has caused concern among some in the industry.
According to QSR Magazine, Michelle Neblett, senior director of Labor and Workforce Policy at the National Restaurant Association stated that in midst of all the discussions regarding regulations mandating employer coverage of full-time employees, reporting regulations may have been lost in the shuffle.
"I'm really concerned that people aren't paying attention to it and that people don't know what it is," she said.
Among the types of data employers must start tracking in January, are who they offered coverage to, by calendar month and by social security number, Neblett said. This information will then be included in reports to both the IRS and employee, in a similar manner to that in which wages are reported. These insurance statements should be issued to the employee by Jan. 31, 2016, with additional reports forwarded to the IRS.
Some restaurant owners think it will drive them out of business. Celebrity chef Emeril Lagasse, for example, said recently that, because of Obamacare, “I have nowhere to go, really — other than broke.”
“It’s becoming a very challenging industry to become a very successful average restaurateur,” Lagasse said, according to The Week. “And then you add all the Obama nonsense to what it’s become in the last several years.”
“Obamacare has presented a number of challenges to the restaurant industry, especially since it was written in a one-size-fits-all style.”
Lagasse warned that the new government intrusions may have dire consequences. “Pretty soon, they’re going to wipe a lot of the middle restaurateurs and restaurant cooks,” he said. “If it continues, then watch: you’re going to have high-end, and you’re going to have fast food, and you’re going to have chain restaurants.”
Obamacare has “presented a number of challenges” to the restaurant industry, especially since it was “written in a one size fits all” style Neblett told Opportunity Lives. She pointed to the way the law determines which employees count towards the employer mandate limit. The Affordable Care Act divides employees into part-time and full-time whereas the restaurant industry has traditionally employed an hourly vs salaried distinction.
In addition to the added cost of providing workers with Obamacare compliant insurance plans, restaurants, especially small ones, will be confronted with what Neblett called “hidden compliance costs. There’s a whole bunch of new data that employers will have to collect.”
However, not everyone is convinced that the impact will be so dire.
According to Restaurant Business Online, employee-benefits experts say that larger chains have plans in place, while many smaller operators have far to go. A January survey by HR firm Mercer found 21 percent of hospitality employers were offering new insurance this year, while 44 percent were waiting until 2015.
The predictions may have been overstated, at least in some cases. “The numbers have generally gone down from what people feared would be the worst-case scenarios,” says Scott DeFife, executive vice president of policy and government affairs at the National Restaurant Association.
Meanwhile, Neblett pointed out, President Obama is not likely repeal the Affordable Care Act. "The law is going forward, and people need to get ready to comply, and not put it on the back burner."