Business

Employers grapple with pending insurance mandate

Posted August 22, 2014 6:55 p.m. EDT
Updated August 22, 2014 6:57 p.m. EDT

— Businesses with more than 50 employees face a January deadline under the Affordable Care Act to provide health insurance to workers.

The employer mandate was to take effect at the beginning of this year – when the so-called individual mandate went into effect – but the Obama administration delayed it for one year.

Employers are already worrying about the added cost of health coverage, and a push for some compromise is expected to ramp up over the next four months.

"We'd rather be spending our time dealing with our competitors rather than this now-competitor, the federal government of ours," said Pete Cotter, who co-owns five Burger King franchise restaurants with a total of 150 employees.

"The cost of the insurance right now is so high that we cannot afford it for our employees," Cotter said Friday. "We raise our prices one dime, we hear about it from our customers."

He said he could keep many workers under the 30 hours per week to avoid the insurance requirement, but he has urged Congress to bump the threshold up to 40 hours per week.

"Most people think of full-time work as 40 hours," he said.

Mike Walden, an economist with North Carolina State University, said employees and employers face consequences from the mandate.

"Presumably we are getting more people insured," Walden said "That's laudable. The problem is the implementation, and you don't want to have adverse, unintended consequences."

One of those might be closing businesses altogether instead of shifting schedules around, Cotter said.

"It is that serious," he said. "Some of our restaurants with lower volumes, we have to consider whether we're going to maintain those restaurants."

Private employers aren't the only ones facing the mandate. State agencies and the University of North Carolina system are re-evaluating the schedules for part-time and temporary employees to minimize the insurance costs because the state budget doesn't account for the potential tens of millions of dollars that the mandate could cost North Carolina.