Restaurant Industry Laments Supreme Court Decision on Health Care

Associations Warn of Potential for Closures, Layoffs to Finance Coverage

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The restaurant industry is bemoaning the Supreme Court's ruling on the 2010 health-care law, the majority of which was upheld in a major coup for the Obama administration.

The key provision in the spotlight has been the "individual mandate," and the Court ruled this morning it is constitutional under Congress' taxing authority to penalize individuals who don't have health insurance. Full implementation of the health-care law is slated for 2014, which will also abolish pre-existing condition clauses that have excluded certain individuals from coverage; insurance exchanges also will be established in all states.

But for the restaurant industry, the ruling of the law is a worry from an employer standpoint. The National Restaurant Association, the industry's largest lobbyist, expressed "strong concern" over the ruling, particularly the employer requirements that "threaten the economic health of the restaurant industry," according to a statement. Their beef: the law would require employers with 50 or more full-time or full-time-equivalent employees to offer health insurance of minimum value to those full-time employees, or face a penalty. In this instance, full time is considered about 30 hours per week, or 120 hours per month, which the industry says would pose an economic hardship.

"Today's ruling by the Supreme Court is troubling for restaurant operators and business owners across the country," said Dawn Sweeney, president-CEO of the National Restaurant Association in a statement. "We encourage Congress to continue efforts to repeal the law, since the Court's decision leaves the employer requirements in place, provisions which impact restaurant operators' ability to grow and create jobs."

The National Retail Federation's National Council of Chain Restaurants division has similar feelings. "Today's decision will impose costly burdens on the chain-restaurant industry, thousands of small-business franchisees and their employees," said NCCR exec director Rob Green in a statement. "The [Affordable Care Act] imposes heavy mandates on employers using punitive penalties for non-compliance. The law will particularly damage the chain restaurant industry, which operates on thin margins and cannot support costly government imposed mandates. Many chains have indicated they will have no choice but to cut back on workers' hours or close restaurants in order to avoid the penalties."

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