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Employers seek help over ‘Obamacare’ costs


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1ae394e6-9558-11e2-a151-00144feabdc0.html#axzz2Oh4UA0kvFinancial Times:

A leading business lobbying group in the US is appealing to the Obama administration to grant special relief to employers in states that are rejecting federal aid promised under the president’s health reform programme.

Under the 2010 Affordable Care Act, or “Obamacare” as it is known, states were required to expand Medicaid, the federally funded health insurance plan for the poor and disabled, with the federal government covering all costs for three years and the states paying about 10 per cent of costs after that.

But the Supreme Court said last year the state mandate was unconstitutional and gave states the right to opt out. So far, 14 have done so, meaning employers of low-wage workers in those states will either have to offer insurance plans to employees or face federal penalties.

In states that are not expanding Medicaid, employers will have to pay $3,000 for each employee who joins a state exchange programme to buy health insurance.

In a filing this month, the US Chamber of Commerce urged the administration to exempt employers in those states from the tax penalties.

In doing so, the chamber pointed to a decision by the Obama administration to exempt poor people in states that do not expand Medicaid from the “individual mandate”, which requires people to get health insurance or face an individual tax penalty. The chamber said the same approach should be used for employers.

“If an employer penalty is only triggered by a would-be Medicaid eligible employee, that trigger should be exempted or excused,” the Chamber of Commerce said.



Looking for a way out.

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Definitive Proof that Obamacare Raises Costs and Kills Jobs

John Hinderaker


A reader who heads an investment group came across this disclosure in a prospectus issued in connection with the recapitalization of a family-oriented restaurant chain. This isn’t a political statement, it is a legally-mandated disclosure to prospective investors, which renders the issuer liable if it isn’t true:


Although [XXX] already offers health care, there is expected to be an increase in costs associated with the affordable health care act (“ACA,” see “Risks” section). To mitigate this cost, employees that were working more than 30 hours per week, but less than 33, have moved down to 29 hours per week, reducing the “full time” pool requiring health insurance from 1100 to 835 employees. Those full time employees will be offered health care insurance through the Company’s program or may obtain it through the state Exchanges or expanded Medicaid programs. The Company cannot estimate the number of enrollees in the future program but based on several discussions with Health Insurance Agencies and the experience of restaurants in other states instituting mandatory health insurance, many are expected to turn it down or seek other publicly funded options. According to an NFP study of the Company’s health insurance and potential impact of the ACA, the total cost increase to the Company in 2014 is estimated to be $400,000 (or a 33% cost increase) which we have factored into our Projections. We believe this cost will continue to increase as the ACA is modified over the next several years but that most of the impact can be managed through cost reducing the plan or offset through menu price increases. Management does not agree with some in the industry that want to make a political statement by adding a line item to every check. Given their broad menu and ability to control portions, we believe the company has substantial control to raise prices at a time when everyone else in the industry will also try to raise prices or somehow otherwise improve margins.


Fewer full-time jobs, rising health care costs and higher restaurant prices. Anyone who couldn’t see that coming shouldn’t be allowed to vote.



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