Companies Could Pay Fines, Cut Hours to Avoid Obamacare

Now retailers that employ low wage workers are coming up with ways around Obamacare, to help save money.  Many will soon be cutting back working  hours or paying the penalties rather than provide insurance through the rules set up by Obamacare.

CEO of the Kroger supermarket company, David Dillion says that some companies might decide to pay a fine rather than insurance premiums because it would cost less.

And Dunkin’ Brands CEO Nigel Travis said the doughnut chain is lobbying to change the definition under Obamacare of full time work from 30 hours a week to 40, a move that would save companies money because they would end up ensuring fewer workers.

Also some fast food chains are considering slashing workers’ hours so that fewer would qualify for health insurance, while others are keeping their numbers of employees below 50 to avoid the insurance costs.  Full time workers at Kroger will still have their coverage, but said some parts of the Obamacare law won’t work because the penalties may be less costly to companies than insuring their employees.

“If you look through the economics of the penalty the companies pay versus the cost to provide coverage, the penalty’s too low, or the cost of coverage is too high, or the combination is wrong,” he said. “If [policy makers] get those things too far out of balance, everybody will have to reconsider their position on that point, including us. But we’re going to wait and see how that all develops.”


Obama sure has proven he’s anti business, hasn’t he?  Not only is he ordering them to pay for something they can’t afford, he also wants the minimum raise  increased……

Under the healthcare law, businesses with 50 workers must pay a fine of $2,000 per worker if they don’t provide insurance for full-time employees. The Kaiser Family Foundation, a non-partisan policy group, says insurance costs companies an average of $4,664 per year for single coverage and $11,429 for families.


5 responses

  1. The big question is what will they actually do? Companies have been saying this since the affordable care act was signed into law. I would suspect most of them want to make it sound bigger than it is so that they can influence politics and the public. I guess only time will tell.

    1. Umm, will they actually do it? Look around, companies are already doing this. Vons just sent out statements to their employees saying that hours will be cut. Wendy’s and Pizza hut have already cut hours.

      1. Actually I was thinking of that when I replied. I think the companies most prone to cutting hours and such in order to avoid offering benefits are already doing this and have been doing it for years. Many of the other companies out there have been offering health insurance for years to their employees and I doubt those will cut hours in order to avoid paying insurance when they are already paying it now.

        Also I don’t know the specifics in the affordable care act, but just because a company has to offer insurance does that mean they have to supplement it? That is can an employer offer insurance while expecting the employee to pay the full amount? If that is allowed then companies won’t mess with their workforce and risk lower moral, lower loyalty and higher turn over.

        Finally consider who most all of the statements thus far by businesses have been worded. They include conditionals or uncertainties. They say they MIGHT do this or are CONSIDERING doing that. I haven’t seen any (not that there aren’t any out there) which state unequivocally that the company WILL implement a change due to the affordable care act. Sending out notices can just be a political ploy much like the DOD talking about sending pink slips to hundreds of thousands of employees because they don’t know which could possibly be cut from sequestration. Business’s play games with politics just like politicians, government agencies and lobbyists. Threats are a good method of scaring some into doing what you would like done even if the threat is hollow.

      2. Companies must cut hours or fire workers, with so much more demands as to what insurance must cover means higher premiums…..there’s no way around it….and these exchanges will cost too much too so people will remain uninsured. Obamacare is doomed…..we can’t afford it, nor should one group of people be expected to pay for it all…..

  2. It’s the only thing companies can do with Obamacare now mandating the insurance coverage include mental health for everyone….as he demands more, premiums go up….it makes more sense to cut hours of workers, or pay the fine. His plan is to break all anyway, and force them into his one payer plan, with him controlling the money and care one receives.

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