American Health Care Regulation Is Halting American Business
Congress can and should still move forward with important health care reforms to ease the burden on millions of American businesses and workers. The National Restaurant Association and the one million foodservice locations we represent urge our elected officials to make a few basic changes to relieve the burdens on our businesses that are stifling growth and impacting our ability to hire new employees. Regardless of the AHCA passage, there are a number of legislative and regulatory issues impacting restaurants, and further actions are still necessary to truly reform the Affordable Care Act (ACA) so it works for all Americans.
Prior to the ACA, a majority of restaurant operators already offered health insurance to their employees, and today restaurant operators want to continue to offer health insurance; they are a critical recruiting and retention tool. However, since the enactment of the ACA, restaurants have been forced to spend hundreds of additional administrative hours managing, tracking and delivering these benefits. If employees saw a marked positive difference in the quality of their healthcare with these additional costs, there would have been an increase in plan participation – that has not been the case. In fact, according to U.S. Census Bureau’s American Community Survey data only 59 percent of restaurant employees with health insurance got their coverage through an employment-based plan in 2015, down sharply from 67 percent in 2010. The ‘employer mandate’ resulted in fewer restaurant employees choosing their employer-sponsored health insurance, not more. We need to change how the health care law defines a full-time employee and the how the government verifies who has health insurance.
Ask anyone how many hours are in a full-time workweek, and they will tell you 40. They would be right – except when it comes to the ACA. The health care law inexplicably defines a full-time workweek as 30 hours, which makes the mountains of paperwork and IRS reporting requirements even more confusing for employers. That is especially true for restaurants, where flexible scheduling is a hallmark of the industry. It is one of the many reasons why people want to work in restaurants. Before the ACA, employees’ hours could fluctuate between 20 to 40 hours. If an employee needed more hours to pay for school books, a child’s school uniforms, holiday gifts, or another unplanned financial need, the option was available to get more hours or switch shifts. The health care law and its definition of a full-time employee has taken away this flexibility from restaurant employees and making it harder for some employees to grow their incomes.
Today, if you are hired at part-time you stay as that, because as soon as one is considered a full-time employee, the employer must start following the ACA reporting requirements regardless of the employee’s decision to take up the employer sponsored health insurance. This means tracking and reporting not just the employee, but also their dependents and their spouses. The ACA’s definition of a full-time employee and the subsequent reporting requirements are causing employees to lose out on extra income regardless of their need for health insurance. While many restaurant employees have benefited from the ACA rules to allow adult children to stay on their parent’s health insurance longer and from Medicaid expansion, few employees have benefitted from the employer mandate.
To add to the confusion for businesses, the ACA contradicts itself in its definition of a seasonal worker. For restaurant operators and other employers whose workforces expand and shrink throughout the year, these conflicting definitions are a major issue – one that could be fixed with a simple technical correction. It is especially confusing for smaller employers trying to determine whether they qualify as having more than 50 full-time employees, which would require them to comply with the employer mandate and reporting requirements. If a business with more than 50 employees accidentally misclassifies a worker, they can face massive tax penalties for not accurately reporting their workforce.
Restaurants are the nation’s second largest private sector employer. We are working with members on both sides of the aisle to move these important reforms forward as part of Congress’ continued efforts to reform health care. Easing the ACA’s burden on our nation’s employers and employees must remain a priority.
Robin Goracke is the Director of Health Care Policy for the National Restaurant Association.