Thursday, October 11, 2012

No longer just crappy Italian food...


... but reduced work hours and dropped healthcare coverage as well.

After all the dust had settled upon the passage of ObamaCare in the spring of 2010 and people, unlike Congress, had a chance to actually find out what was in one of the most sweeping pieces of legislation in decades, it was discovered that by accident or design there were some rather perverse incentives built into ObamaCare. By perverse incentives, we mean that the outcome of some or many aspects of ObamaCare would work out exactly the opposite as intended.

Predicting the outcome of these perverse incentives didn’t take a Ph.D. as some of the mandates contained within ObamaCare were going to lead to the most obvious of results. Take for instance the additional coverage that would be mandated for full-time employees and think about what possible outcome it might result in if the employer felt the additional cost of that additional coverage too burdensome to bear.

From the Washington Examiner:

If you want to know how Obamacare will affect future U.S. employment, look no further than this week's Orlando Sentinel report on Darden Restaurants -- the company that owns popular chains like the Olive Garden and Red Lobster. Currently, all 185,000 Darden employees are offered health insurance, but that's about to change, thanks to Obamacare.

Obamacare fines large companies that fail to offer health insurance to their full-time employees. This would not be a problem for Darden, except that many of its employees have affordable health plans whose coverage is not robust enough to fulfill the requirements of Obamacare's individual mandate. Such plans are popular with restaurants, whose profit margins tend to be small, because they let employers offer benefits at a very reasonable cost. But such plans have coverage limits and other features that Obamacare bans, so they will likely be discontinued beginning in 2014, if not sooner.

And so in order to avoid paying fines or buying massively more expensive health plans that are Obamacare-compliant, Darden is now experimenting with limiting its employees' hours instead. By keeping workers to fewer than 30 hours per week, Darden can categorize them as "part-time." Thus, the company avoids the Obamacare fines and leaves employees to the new government health insurance exchanges, where they may receive subsidies to purchase insurance. At least two other restaurant chains -- White Castle and McDonald's -- are considering similar plans.

The perverse incentive built into ObamaCare has employers seriously considering cutting their employees' hours to part-time status so they don't have to provide any health insurance to them.

Cutting the hours and thus the take-home pay of your employees and gutting their health care insurance at the same time. What's not to like about that?

Yet another Obama policy that is not only counter-productive to the health care of this nation's workforce but one that puts a drag on the economy when that is the last thing we need.


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