Restaurant owner tells Congress ACA mandates do not work

Restaurant owner tells Congress the Affordable Care Act remains a big problem for him and the rest of the restaurant industry.
Blog PostApril 16, 2015

healthcare reformIn 2013, the owner of eight Five Guys Burgers and Fries franchises suffered intense backlash for telling a Heritage Foundation roundtable that rules of the new federal health law had iced expansion plans and could lead to higher prices.

The reaction to Mike Ruffer’s comments was swift and severe – calls, e-mails and social media by purported Affordable Care Act supporters drove Ruffer into silence, fearing his business was in danger. Executives with many other restaurant chains endured similar flack for merely suggesting ways to accommodate costly ACA rules.

There is one voice, however, that has not been silenced. And according Scott Womack, these restaurant owners had every right to fear the impact of the health law on their businesses and employees.

Womack is a restaurant franchise owner who testified before U.S. House Ways and Means Committee in 2011 that providing health care coverage would cost him $7,000 per full time employee:

“This new expense is beyond our ability to pay. I estimate the cost to my company to be 50% greater than our company’s earnings. Let me state this bluntly: this law will cost my company more money than we make.”

Unable to ensure long-term financial security for his 16 IHOP restaurants and more than 1,000 employees, Womack sold the eateries.

He has since bought some Popeyes chicken franchises in Kansas City.  But four years later, the ACA problem continues to be a heavy burden. Womack was recently back before Congress on behalf of the U.S. Chamber of Commerce, telling the Ways and Means Committee how the health law is affecting the restaurant industry:

“Our reality today under the ACA is very different than what was promised. Over the last four years, our insurance premiums have risen 60%. Our single coverage now costs $6,400 annually and family coverage costs $19,200 annually. However, we have also had to double our deductibles to $2,500 and raise the out-of-pocket limit by two thirds.”

“While our insurance offering complies with the ACA as affordable, only 4% of our hourly staff have enrolled. As I sampled my fellow franchisees, I discovered that 3% to 4% enrollment is the norm across the industry. Andy Puzder, CEO of CKE Restaurants (Carl’s Jr. and Hardees), wrote in a January 13, 2015 Wall Street Journal op-ed that only 2% of his company’s 6900 employees had enrolled.”

Read the entire story here.