Sarah Curtis-Fawley, owner of Pacific Pie Co., a Portland, Ore., restaurant and wholesale pie company, said the cost of providing coverage for her 54 employees could amount to a tenth of Pacific’s annual revenue of about $1 million. So, she said she may have to raise menu prices or postpone opening a third restaurant.
“I haven’t been able to find a plan that would seem to make sense financially,” Curtis-Fawley said.
At the start of this year, United Parcel Service Inc. dropped health insurance benefits for working spouses of the parcel delivery company’s nonunion employees who could get coverage elsewhere. UPS said the change was due to rising health care costs and the overhaul.
Indiana University has started trimming hours for about 750 employees who aren’t considered full-time but averaged more than 30 hours a week so the university can avoid the requirement that it provide those workers coverage. Spokesman Mark Land didn’t have an estimate for how much this will save in health care costs. But he noted that the university, which covers about 18,000 full-time employees, spends more than $213 million per fiscal year on health care, and its budget for that expense climbed more than 7 percent from last year.
“At some point, we had to balance our commitment to employees with the realities of our financial situation and our responsibility to taxpayers and students who pay much of the bill,” he says.
Businesses owners say they have to take time away from running their companies to understand the law and explain it to employees. The overhaul also forces some without human resources staff to spend more on consultants to help them translate changes in the law.
About 78 percent of more than 700 employers surveyed recently by the benefits consultant Mercer labeled the increased administrative burden imposed by the law as either a significant or very significant concern.