America Struggles Under the Weight Of the Affordable Care Act

By Allen Tharp, President SATP

Low-margin businesses like restaurants have struggled with the extra regulations and expense foisted on them by the Affordable Care Act (ACA). While a high tech company like Apple can invest a couple of dollars in materials for an IPhone and sell it for $800, restaurants do not enjoy the same markup on products. Restaurants cannot create a product for $2 or $3 and sell it for $800, the way high-tech companies can. No one would pay the price for an $800 hamburger, no matter how good it is.

So, while higher premiums, deductibles, taxes, and penalties under the ACA may be absorbed and minimally impact Apple, such added costs can completely destroy low-margin businesses like restaurants that cannot absorb the increases.

In addition to dealing with crippling costs involved in compliance with the ACA, small businesses have had to deal with the change in the ACA definition of full-time employment, from 40 hours per week to 30 hours per week. To avoid stiff penalties, small businesses that cannot afford to pay for the newly mandated level of coverage under the ACA have had to cut staff schedules to less than 30 hours per week.

These limited schedules have caused serious problems for employees who needed to work 40 hours to cover their bills. They have also caused problems for employers and changed the relationship between employer and employee because many employees have had to take two jobs and do not feel the same level of loyalty to part-time employers. 

Conflicts develop when an employee is asked to work the same schedule by two different employers and must choose which one to prioritize.

Employee turnover has gone up tremendously now with the new part-time ACA society. This increased transience has not been healthy for employees or employers. Employees do not progress as quickly if they are not committed to one employer. Employers are faced with greatly increased staffing costs due to the additional training required for new employees, as a result of more turnover.

Just two days into its new session, the House of Representatives passed bipartisan legislation to change the health care law’s definition of “full time” from 30 hours to 40 hours a week.

It’s the third time in less than a year that the Save American Workers Act, co-sponsored by Rep. Todd Young (R-Ind.) and Dan Lipinski (D-Ill.) has passed the House. Now, the focus shifts to the Senate, where the bipartisan Forty Hours is Full Time Act was introduced Tuesday by Sens. Susan Collins (R-Maine), Joe Donnelly (D-Ind.), Lisa Murkowski (R-Alaska), and Joe Manchin (D-W.Va.).

Passing the bill in the Senate is expected to be more challenging, as 60 votes are required to bring it to a vote.

We urge all to write to their senators and ask them to support jobs and small business by supporting this bill.

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