Along the Watchtower #4: The reality of Obamacare for one Ohio company

As the horrible reality of Obamacare settles across the nation, one Ohio Company is grappling with the new realities of the new healthcare bill. I encourage all of you to now do what many across the country failed to do; study and read up on this horrendous bill that the demosocialistacrats rammed through against the majority of people in our country. Remember Nancy Pelosi's words that went something like this: We need to pass this bill so the people of this country can find out what is in it. Not an exact quote but close enough to get the point across. I am, by no means an expert on Obamacare but I did manage to struggle through over half of the bill before it got ram rodded through. It was boring and filled with an over abundance of legalese but that is what politicians and the government do.


Here in my home state of Oregon, we have many friends who are shocked and dismayed over the increase to their health insurance for 2010. Increases from 25% to over 40% have been reported to me. These are retired school teachers, fire fighters, law enforcement, union and non-union employees that cover a very wide spectrum of society. Almost every one of these increases has been related to the new healthcare bill in one way or another. I have some other friends who work for a couple of large health insurance providers. They are telling me the same story. Where I now work part time assisting the State Dept. of Employment giving Career Readiness Certificate exams(CRC),I have access to numerous studies and articles from across the country on the new healthcare bill and it's fallout. This is not a pretty picture. We must hold those who voted this through accountable and vote them out of office this coming November.

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Job losses from Obamacare: White Castle Hamburgers

Cleveland Plain Dealer: WASHINGTON, D.C. - The White Castle hamburger chain fears that a health insurance reform law adopted earlier this year will put its profits on a downward slide.

The Columbus-based family owned restaurant chain - known for serving small square hamburgers called "sliders" – says a single provision in the bill will eat up roughly 55 percent of its yearly net income after 2014.

Starting that year, the bill levies a $3,000-per-employee penalty on companies whose workers pay more than 9.5 percent of household income in premiums for company-provided insurance.

White Castle, which currently provides insurance to all of its full-time workers and picks up 70 to 89 percent of their premium costs, believes it will likely end up paying those penalties. The financial hit will make it hard for the company to maintain its 421 restaurants, let alone create new jobs, says company spokesman Jamie Richardson. White Castle employs more than 10,000 people nationwide, and more than 1,200 in Ohio.

Though advocates of the health insurance bill say its reforms will boost employment, House Republican Leader John Boehner of Ohio, a vocal foe of the changes, says White Castle's analysis shows how the law's "job-crushing" impact will be most severe in lower-income areas, where jobs like those at White Castle are most needed.

"The irony is that in the name of expanding health care coverage, the administration is making it harder than ever for unskilled workers to get started in the workforce," Boehner said in a missive on White Castle's plight.

Boehner's predictions don't mesh with White House Council of Economic Advisors estimates that health care reform will create 320,000 jobs in upcoming years. The White House has said employees at larger companies aren't likely to notice any difference in their insurance coverage, and that changes in the bill will particularly help small businesses by driving down their premium costs and making it easier for them to insure workers.

"While opponents of reform have raised concerns that some of the provisions in the President's proposal will harm small businesses and their employees, the facts, figures, and discussion below show that the proposal will mean tax cuts, no new requirements, and numerous other benefits," said a blog posting from the group's chair, Christina Romer, and its senior economist, Mark Duggan.

That's not how the National Council of Chain Restaurants sees it. Restaurant group vice president Scott Vinson says the entire restaurant industry will have trouble dealing with costs the bill imposes in 2014, including a $2,000-per-worker penalty that companies with more than 50 employees must pay if their workers end up purchasing federally subsidized insurance rather than getting insurance from their employers.

"There is the expense of actually providing the insurance, then the expense of not providing insurance," says Vinson. "It will be expensive either way."

George Ebinger of New Jersey, who owns several International House of Pancakes restaurants, says the penalties for not insuring his 140 workers will cost roughly half as much as insuring them. He figures he will have to raise prices and possibly lay off workers to come up with the $220,000 he anticipates the penalties will cost.

"We are still figuring out how to deal with this," says Ebinger. "Ultimately, either businesses will close or consumers will pay more."

Problems will be felt throughout the retail industry, which employs many entry-level workers, says National Retail Federation vice president Neil Trautwein. He says employers will face tough choices when the mandates become effective in 2014.

"We do worry about this discouraging employment, particularly when employment hasn't taken off," says Trautwein.

But White House Office of Health Reform Director Nancy-Ann DeParle says 97 percent of the nation's companies won't pay any penalties under the new law.

"The principle underlying this bill is: if you don't offer coverage and you have workers who the taxpayers are supporting to get their coverage, than you must make a relatively small contribution," says DeParle. "I understand that they don't like it and believe it will cut into their profits, but it is a relatively small contribution to defray costs to taxpayers."

Steven Kreisberg of the 1.4 million-member American Federation of State, County and Municipal Employees union, questions White Castle's calculations. His union represents food service workers in Ohio public schools and other institutions.

He figures many of the White Castle workers who would end up paying a significant amount of their income for premiums would opt to buy less expensive coverage from a federal exchange.

"Let's not forget that since the worker is declining their coverage, they don't have to pay insurance for that worker," says Kreisberg, the union's health care policy director. "So they would be saving money at the same time as they are paying the penalty."

White Castle recognizes it won't continue paying health insurance bills for workers who buy insurance on the federal exchange, but Richardson says the company predicts its insurance costs would still rise because its healthiest young employees, who make the least money, would be most likely to transfer to the federal program. An exodus of healthy workers from the company's insurance plan would drive up costs for those who remain, the company forecasts.

White Castle, which began offering health insurance to workers in 1924, is also examining whether it would make financial sense for the company to eliminate health insurance coverage altogether and have all its employees buy insurance on the federal exchange, says Richardson.

"It would be incongruent with how we run our business, but we have to think that through," says Richardson. "No matter what, we will do what's best for our team members."

Original article can be found here

Hat tip: ARRA News Service