People tend to either love or hate White Castle — there’s no in-between when it comes to those greasy little sliders. Me, I love ’em, especially late at night after a round of social throat-wetting. But the Obama administration … Maybe not so much. From the Cleveland Plain Dealer:
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 has offered health insurance to its employees since 1924, is considering dropping coverage entirely as one possible way of off-setting the expected financial hit. That would leave the company’s 10,000 formerly covered workers to seek health insurance on their own — most likely from the federal exchange. The feds will impose $2,000-per-person fines on companies that don’t offer coverage, and whose employees turn to federally subsidized insurance instead, but the article cites an IHOP franchise owner who expects the fines to cost roughly half what coverage costs under the new federal scheme.
This squares with what the Heartland Institute’s Health Care News is reporting, with some small businesses panicking about the looming 2014 date. HCN quotes the owner of a small pizza chain saying that if his company is hit with onerous costs under the health care law, “we’ll probably sell all the stores and be done.”
Since the health care law imposes its toughest requirements and penalties on businesses with more than 50 employees, the National Federation of Independent Businesses asks, “what incentive is there for a firm to grow any bigger than 50 employees when it means employers may face such stiff fines?”
What incentive for small businesses to grow — or for larger firms to stay in business, if costs rise and eat up profits?
And all this at the price, as the Cato Institute’s Michael Tanner points out, of $2.7 trillion over ten years, a higher national debt, soaring taxes, and health care costs that continue to increase.
Looks like I better stock up on those sliders.