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National Restaurant Association - Health Care Watch: We must tell our stories

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Health Care Watch: We must tell our stories

This is one in a series of blog posts on the health-care law and the restaurant industry. Michelle Reinke Neblett, the National Restaurant Association's director of labor and workforce policy, writes the articles.

Restaurant companies want to offer health insurance to their employees, but that coverage must be affordable to both the employee and the employer. It also should be tailored to the needs of the workforce, not dictated by the federal government.

One such company White Castle System Inc. has offered health-care coverage to its employees for nearly 90 years, and, along the way, has made changes to the plans it provides based on employee feedback. Team members are eligible to enroll in White Castle's medical benefits package after being employed with the company for six months or more and are willing to be scheduled to work at least 35 hours a week. Employees say the benefits offered are the reason they come to work for White Castle and why they stay.

Because the Columbus, Ohio-based quickservice restaurant company employs nearly 10,000 team members, it will not only be subject to the Patient Protection and Affordable Health Care Act's, or PPACA's, employer mandate and automatic enrollment provisions, but also to the Internal Revenue Service's detailed and extensive employer reporting requirements. That same information will have to be made available to each full-time White Castle employee as well.

White Castle estimates that in 2014 its current health-care coverage costs could increase by more than 20 percent, a dramatic difference from their recent experience where a focus on wellness and preventive care seems to have had a positive effect in managing those costs. The company's year-to-date 2012 health care costs are trending up by less than 3 percent.

On July 10th, Jamie Richardson, White Castle's vice president of Government, Shareholder and Community Relations, testified before Congress on behalf of the National Restaurant Association, to tell how the health care law will impact his company's restaurants and employees.

Richardson spoke about the impact the law is already having on his company. White Castle's expansion plans and the jobs it would create have been put on hold for now because of the uncertain cost environment. Without formal guidance or regulations to define a full-time employee, calculate hours of service and determine whether the company's plan meets the affordability and minimum value tests, White Castle, and others in the industry like it, can't yet determine the law's full impact and can't manage against such risk.

He described restaurant operators' challenge with the law best when he said:

"I think for us it's always been about the dignity of the individual....our founder, Billy Ingram, started our business with that in mind. He wanted people to have freedom from anxiety. So as we developed and grew the business, that was a primary focus...how do we provide that in any way we can,...[and] in 1924, started with the health insurance plan....

"[In PPACA,] what we see is a wall that's being placed between ourselves and our employees; because we've been able to have that conversation with them on a daily basis...We listen intently. We modify those benefits and we've done that over time.

"...As we're looking to the future, we're very concerned about the cost implications that this has for us and our ability to continue to do that. We're put into a bit of a box where, really, the only way that we can continue to offer the benefit that our team members have come to depend upon us for, and that we have a great relationship with them on, is to reduce the quality of the benefits."

After his testimony, Richardson said the biggest takeaway from his experience was that other restaurant operators need to stand up and tell their stories, too.

For many in the industry, significant cost increases will result from the changes the law will impose on employers and their plans. Also, the anticipated take-up of employer sponsored coverage by employees complying with the individual mandate who did not accept previous offers of coverage from their employer will contribute to the cost increase. There are requirements in the law that all employer plans must comply with, so without addressing the increasing cost of coverage, employer sponsored coverage is squeezed.

So many restaurant operators have stories similar to the one Richardson and White Castle told Congress July 10. The NRA needs more of you to step forward and share your stories, too. Tell us how you think the law will impact your restaurants, including the options you have in front of you, so we can share them with decision makers.

(Watch/Read Jamie Richardson's testimony)

For more information on the law's employer requirements, visit the NRA's Health Care Knowledge Center, and join us July 19th at 2 p.m. ET for "Looking Forward After the Health Care Decision: What Restaurant Operators Need To Know," a members-only webinar. Register here.

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