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Restaurants brace for big bite from healthcare law

Restaurants brace for big bite from healthcare law

How much will the Affordable Care Act cost your restaurant? In considering that question, Bloomberg Businessweek asked Firehouse Subs c.e.o. Don Fox to analyze the impact the healthcare law will have on one of his company’s units. He concluded that the law’s requirements will add about $4,000 a year to costs in the first year, not an insignificant sum considering that the average pretax profit for those units is $63,555.

As time goes on, the law mandates penalties for being uninsured, which will increase the number of employees enrolled—and the cost to employers will spiral.

An increasingly popular way to control these new costs is to cut workers’ hours to stay below the 30-hour threshold. The University of California at Berkeley’s Center for Labor Research and Education estimates that about 16 percent of restaurant workers might be impacted by these cutbacks.

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