Video: L.A. restaurant now tacking on an extra three percent to cover its new ObamaCare costs
Via Moe Lane. The bad news: They’re telling customers who object to the charge to reduce their waiter’s tip accordingly, although only a very few have done so thus far. (Republique is pricey to begin with so its clientele can more easily bear an extra surcharge.) The good-ish news: Last week Obama waved his executive magic wand and delayed the employer mandate for another two years so, strictly speaking, small businesses really don’t need to take this step — yet.
Or do they? The story of ObamaCare’s implementation over the last four months is that you never know when a new game-changing delay or extension will come down from Mt. Olympus to satisfy the White House’s political needs du jour. On top of the capriciousness, you’ve got Republicans mobilizing to undo some of O’s executive actions on constitutional grounds. If you’re a business owner trying to plan for next year, how much can you trust that any government rule or regulation that’s guiding your behavior now will be there next week?
Republique has taken heat from patrons for the tacked-on cost, but managing partner Bill Chait told Southern California Public Radio there is a method behind the madness.
The restaurant wanted its 80-plus workers to be full-time workers, but the health care law in the coming years will require large employers to provide health coverage to its full-timers or pay fines.
Although the Obama administration has delayed the mandate for companies of 50 to 99 employees to 2016, critics say the rule is forcing employers to trim payroll or move people to part-time status ahead of time.
You can lay people off or reduce them to part-time status, you can cut your own profits to cover the extra health insurance you’ll be required to provide once the employer mandate finally takes effect, or you can do this. And before you write off Republique’s tactic as a fluke thing that other businesses won’t emulate, read SCPR’s take on the owner, Chait. He’s a big name in the Los Angeles restaurant scene, managing six places around town. (“[A] lot of other restaurateurs pay attention to his business decisions.”) Three percent may seem penny-ante, but the more adverse selection problems the exchanges have, the more likely premiums are to rise in the years ahead. And needless to say, not every business may be as well positioned financially as Republique to keep its surcharge low.
Cheer up, though. At the rate we’re going, the employer mandate’s unlikely to ever take effect. Either we’ll have a Democratic president in 2016 who’ll keep on delaying it to cover his/her ass politically or we’ll have a Republican president who’ll sign Congress’s bill to repeal it once and for all. What Republique’s really charging here is an uncertainty tax, just in case the administration reverses course yet again. Thank your president for it.