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A 1% surcharge is a cheap price to get insurance coverage for workers

According to an MSNBC story that aired on Feb. 28, 2014, Dockside Restaurants have added a 1% fee on orders due to what the management calculates as the cost of the Affordable Care Act (ACA). Last Year, Papa John’s restaurant founder John Schnatter said that the ACA would increase the cost of his pizzas by 1%. So be it. If employers value their employees, they will help pay the insurance costs to keep their workers healthy and productive.

Florida insurance company provides access to Obamacare
Photo by Joe Raedle/Getty Images

A lot of the issues with the ACA actually fall on the business decisions by managers, and not the insurance companies or the ACA provisions. We can assume that Dockside Restaurants did not provide insurance coverage for all its full time employees before the ACA, and now they have to do it. Dockside Restaurants is required to contribute to medical insurance under the ACA, but they do not have to bear 100% of the cost. Plans with high deductibles are available for companies as well as for individuals. These high deductible plans often have the deductible portion paid by the employee.

Providing health care costs money. Dockside Restaurants will also raise their prices if the cost of seafood and other menu items increase. On a $15 bill, the cost being passed on to the customers will be $0.15. That is a cheap price to pay. Forcing the employers to provide insurance coverage under the ACA is the only way that many waiters and waitresses can afford health insurance.

The minimum wage in Florida for tipped employees in 2014 is $4.91 per hour plus tips. This is $196.40 per week, plus tips, to pay the rent or house payment, pay the car insurance, buy food, pay the electric, gas and phone bills, and maybe babysitting or child care expenses. There is not much room for health insurance in the budget. Ohio's minimum wage for tipped employees is $3.98 per hour, plus tips.

John Schnatter, founder and CEO of Papa John’s said in an interview that many Papa John’s pizza franchisees would cut back working hours beneath the 35 hours stipulated in the ACA. Critics of the ACA have then claimed that ACA is causing people to lose their insurance coverage. The businesses are making the decision to have their employees hours cut so they don’t have to provide coverage for the employees. This is a greedy decision that is not the fault of the ACA. Not providing insurance is also a good indication of how little employers value their employees in a monetary and moral sense.

People that really insist on going without coverage, and willing to have others pay their bills if they get sick or injured, can take refuge in the fact that the penalties for not having insurance are less than the insurance. People that go to emergency rooms get treated. Someone pays for that treatment, and not being able to get insurance puts many people at the ER. The attached video provides a doctor's experiences with the ACA with regard to treating people under the ACA that were treated as uninsured before the law was passed.

Dockside Restaurants can count on their employees getting treatment at an Emergency Room if they are really sick or injured. It is the Florida law that hospitals provide ER coverage, and it is part of the licensing of hospitals that hospitals agree to give treatment.

LEGISLATIVE INTENT.—The Legislature finds and declares it to be of vital importance that emergency services and care be provided by hospitals and physicians to every person in need of such care. The Legislature finds that persons have been denied emergency services and care by hospitals. It is the intent of the Legislature that the agency vigorously enforce the ability of persons to receive all necessary and appropriate emergency services and care and that the agency act in a thorough and timely manner against hospitals and physicians which deny persons emergency services and care.

Dockside Restaurants and similar businesses can make a profit on the 1% surcharge that they put on their bills. This action by Dockside Restaurants isn’t really about the cost to provide employees with insurance. It is to make a point against the ACA provisions.

As consumers, we can make choices to buy products at higher prices, e.g. buying Made in the USA instead of Made in China products. We can also make choices where we buy our groceries, pizzas and manufactured goods.

If employers do not consider the health of their employees important enough to contribute towards health insurance, we can accept the surcharge for their products or services on the one visit we make to their establishment. If the ACA is costing employers only 1% additional to get coverage for the employees, it is a bargain. If Dockside Restaurants and Papa John's had not done the math, a higher cost might have been estimated.