Blog PostApril 1, 2013

Popeyes President: Employees May Decide To Work Part-Time In Response To Obamacare

Another Company Struggling to Comply with Health Care Reform

Author: Bonnie Kavoussi

Publication: Huffington Post


Popeyes, a popular fast food chain, expects some of its employees to voluntarily cut their own hours in order to try to sidestep a fee under the Affordable Care Act, but doing so would not let workers avoid that cost.

The health care law, known as Obamacare, will require Americans to obtain health insurance or else pay a penalty (unless they qualify for an exemption). Ralph Bower, Popeyes’ U.S. president, told The Huffington Post on Friday that he expected some workers to choose to work part-time because he thought the mandate to obtain health insurance applied only to full-time workers. In fact, the mandate applies to all Americans, a fact Bower later acknowledged.

“Our fear is that some of our employees that are full-time employees will cut back on their hours so that they won’t be subject to [the mandate],” Bower said in an interview. “My understanding is that if you’re working part-time, then you’re not mandated to buy the insurance. … If you’re not a full-time employee, then you don’t fall under the mandate.”

Bower later corrected himself in a statement to HuffPost, but did not walk back his prediction that some Popeyes employees may choose to work part-time in response to Obamacare.

“I was mistaken in my earlier statement that only full-time employees would be subject to the mandate. In fact, everyone is required to have health care,” he said. “The company would be cautious about doing anything that would cause our full-time employees to cut back their hours, but we will not know until 2014 if anything in the law would make that happen.”

Larry Levitt, senior vice president at the Kaiser Family Foundation, told HuffPost Friday that Bower’s reasoning “seems quite confused.”

“There’s no difference between working full-time or part-time in terms of how the individual mandate works,” Levitt said. “I can’t see any advantage from a health insurance perspective of someone working part-time.”Bower said he expects many Popeyes employees to choose to pay the penalty for forgoing health insurance, noting that the Obamacare fine for not having coverage will be only $95 next year. He said only about 5 percent of Popeyes workers have signed up for a high-deductible health insurance plan offered by the company that costs $130 per year.

In addition to the mandate for individuals, the health care law will require midsize and big employers — like Popeyes — to pay penalties if they do not offer affordable health insurance to full-time employees. Some employers, including Wendy’s and Taco Bell franchisees, have forced employees to work fewer hours in order to avoid offering them affordable health insurance.

Bower emphasized to HuffPost that Popeyes does not plan to cut any employees’ hours in response to Obamacare.