Home / Restaurant Trends and News / Food Service Industry Groups Voice Their Opposition To The House’s Health Care Reform Bill

Food Service Industry Groups Voice Their Opposition To The House’s Health Care Reform Bill

Health Care Reform and Restaurant IndustryHouse Bill 3962 passed the U.S. House of Representatives last Saturday, and with the vote, which was a close one, the first steps have been taken towards comprehensive health care reform in America.  The primary provisions of the bill include:

  • Roughly 96% of Americans would be covered
  • Businesses with less than $500,000 in payroll costs would be exempt from providing mandatory health care
  • Businesses and individuals would be able to shop for and purchase health care in a new Health Insurance Exchange, which would feature insurance options from private companies, co-ops, and a new government run option
  • Businesses with over $500,000 in payroll costs who do not provide their employees with health insurance would pay a 2% – 8% tax that would be paid into the Health Insurance Exchange
  • Individuals cannot be denied coverage because of preexisting conditions

Here’s what Dawn Sweeney, president of the National Restaurant Association (NRA) had to say last week, as quoted in Nation’s Restaurant News: “Unless portions of the legislation are tailored to reflect the economic and operational realities facing our industry, we will be forced to oppose the bill.”  The NRA and several other industry groups have actively voiced their opposition to the House version of the health care bill.  Most of these groups also say they favor some kind of reform, as long as it doesn’t put an undue burden on business.

Obviously, the most contentious part of this bill for restaurateurs is the requirement to provide coverage for employees if your annual payroll exceeds $500,000.  Yet 90% of businesses in the restaurant industry have less than 50 employees.  Additionally, the 2% penalty for not providing health coverage to your business’ employees could actually provide an affordable and easy out for many mid-sized businesses.  That’s because 2% of your payroll is cheaper than providing health coverage for your employees.

The obvious counterpoint to this is that these businesses don’t have to pay anything at all for health care now, so any increase, whether through mandated coverage or the penalty that results from avoiding this coverage, puts a burden on an already struggling industry.

It’s difficult to balance the concerns of business versus the health coverage needs of employees and individuals.  The debate surrounding health care reform is a virtual minefield of misinformation, confusing provisions, and contentious debate.  And it’s certain that the House health care bill will change significantly once it meets a very different version currently being considered in the Senate.

All this means we don’t know what we can expect from the legislative process regarding health care reform.  No matter what, many people are going to be unhappy.  Others are going to wonder what it all really means.  And no one is really going to know how this reform is going to affect them for some time to come.

What’s your opinion on health care reform and how it will affect the food service industry?  Leave a comment below!

About Greg McGuire

Greg has blogged about the food service industry for years and has been published in industry magazines, like Independent Restaurateur and industry blogs like Restaurant SmartBrief. He lives in Colorado with his wife and two sons and enjoys reading, live music, and the great outdoors.

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  1. I personally think that the government can’t get things like this straight. I notice that a number of the Congressmen who helped pass it were pointing to how great a bill this was and ranked up there with the Social Security passage and Medicare. Both items that the government has failed to manage properly and which have cost us in the long run in multiple ways.

    So I think this will only inflate our problems.

    • I think if you asked any senior what the most important factor in maintaining their quality of life is, 9 out of 10 would say Social Security and Medicare. These programs have all but erased the social problems that plagued the Depression era.

      There were few problems with these vital entitlement programs until the Reagan era, when deficit spending created by cutting taxes for the wealthiest 1% was paid for by taking money from the Social Security trust fund. That practice continued under both Bush presidencies.

      Thus the problem does not lie with these government programs themselves, but with followers of Reaganomics, an ideology that has proven over the last 30 years to be at best misdirected and at worst downright destructive to the economic welfare of this country. Our current economic predicament is a perfect example of this.

  2. I’m not sure making health care mandotory is even constitutional. I’m in Michigan. Federal law prohibits me from buying health insurance in another state, even if it’s cheaper. If the feds would abolish that law, competition would make prices cheaper. In Michigan Blue Cross Blue Shield-MI has 70% of the market. Obama complained in a speech that Alabama had only one health insurance provider; Blue Cross Blue Shield- AL. That’s because the federal government is in the way of competition. More competition = cheaper rates = more accessabilty.

    Listen to this from 1961.

    • While I (probably not surprisingly) don’t agree with Ronald Reagan’s views on health care, I agree that the prohibition on selling insurance across state lines creates regional monopolies for insurance companies. Unfortunately, there are two reasons why this won’t change any time soon:

      1) The insurance industry has a very large number of congressmen FROM BOTH PARTIES in their pocket.
      2) There is a legitimate fear that predatory insurance companies in states with little or no regulations will take advantage of an ill-informed public.

      These are two problems that won’t be worked out any time soon, so I think we have to go with what we got.

      As far as the constitutionality of health care, again, ask any senior what their favorite government program is and they will tell you “Medicare,” which is a federally mandated, national health care program that saves thousands of lives every year.

      That’s why I laugh when people say: “No socialized medicine! Don’t touch my Medicare!” in the same breath.

  3. I think restaurants should be reminded how easy they will get off here. Due to the fact that many of their employees don’t need to be paid minimum wage, it would be easier for a restaurant to stay under the $500,000 mark than another company of comparable size.

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