An Obamacare surcharge is now tacked on to the bill of customers at a popular Florida restaurant chain.
Eight Gator’s Dockside restaurants have decided to add a one percent “ACA” surcharge to cover employee health insurance. ACA stands for the Affordable Care Act, a.k.a. Obamacare. Thirteen other Dockside restaurants in Florida under separate ownership have no plans to add the Obamacare surcharge, however.
Although the employer mandate has been postponed, insurance policies must now cover 10 so-called essential health benefits, including those that are inappropriate for a worker’s age or gender such as maternity care, mental health services, or pediatric services. This forced coverage has already resulted in significant premium increases for employers and employees in the many workplaces where employer-provided health insurance is part of the benefits package. Among other things, Obamacare also expands the amount of government-required paper shuffling and whatnot.
A sign posted on the door of each Gator’s Dockside restaurant where the Obamacare surcharge is in effect reads that “The costs associated with ACA compliance could ultimately close our doors. Instead of raising prices on our products to generate the additional revenue needed to cover the costs of ACA compliance, certain Gator’s Dockside locations have implemented a 1% surcharge on all food and beverage purchases only.”
The company estimates that Obamacare compliance could increase benefits costs by $500,000 a year, while the surcharge could generate about $160,000. This particular group of restaurants has 250 full-time employees (about half of the current workforce) who ultimately will come under the Obamacare coverage mandate for employers with 50 or more employees.
The eatery — and each similarly situated business across the country — faces some difficult choices as the employer mandate goes into implementation: “Gator’s Dockside could choose to not give full-time employees coverage even once the mandate kicks in, and pay a fine. Or the chain could reduce its current full-time employees’ hours, so that they only work part-time – and thus don’t qualify for health coverage under the employee mandate. But as the surcharge shows, Obamacare is no free lunch. Most businesses probably won’t opt to add a specific surcharge in order to cover their new health care costs, but some will certainly raise prices — or reduce quality of their products. Obamacare hasn’t driven down the costs of health insurance, or found a magical new source to cover those costs.”
Back in 2012, the proprietor of a group of Florida Denny’s restaurants claimed that the would be adding an Obamacare surcharge to each bill.
Would you be okay with an Obamacare surcharge or fee added to your bill to help pay for employee health insurance?
— CNNMoney.com (@CNNMoney) February 27, 2014