Mike Cote's Business Editor's Notebook: Restaurant owner faces up to challenge of ObamacareMIKE COTE
April 19. 2014 8:11PM
TODAY'S QUESTION: Would you rather spend 3 1/2 hours listening to a forum about Obamacare or get a colonoscopy?
OK, that was just a cheap stunt to get you to read this column, which is what I pulled last week. That kind of glib, snarky humor is the old me. The new me wants to be of service to business owners who need to prepare for the Affordable Care Act, whether they like it or not.
Mostly, they don't seem to like it. But they have no choice but to do something about it.
Tom Raffio, president and CEO of Northeast Delta Dental, recently gathered a group of expert volunteers from health-care companies, government agencies and businesses to present a conference on the Affordable Care Act at Southern New Hampshire University. I had to sneak out early so it turns out I missed one of the most useful parts of the program: the half-hour where panel members addressed questions from the 160 people who attended. Raffio has kindly offered to compile the most commonly asked questions for publication in an upcoming edition of the New Hampshire Sunday News.
In the meantime, as noted last week, one of the panelists at the forum was Tom Boucher, owner of Great New Hampshire restaurants, which operates the Copper Door, Cactus Jack's and T-Bones. Boucher presented an overview about how his company faced the challenge of Obamacare and ultimately transformed it into a selling point for his business.
Last summer, Great New Hampshire Restaurants employed more than 500 workers as it began preparing for its health insurance renewal. It had 155 full-time salary or full-time hourly employees on its plan and an additional 133 who would become eligible under the Affordable Care Act.
"The challenge we were facing was we had 133 people that weren't on our plan, and we didn't know at the time what their decision was going to be based on the ACA," Boucher said. "We had to have a clearly focused strategy."
At roughly $2,000 per employee, the company was looking at a potential extra expense of $266,000, he said. Managers didn't expect all 133 employees would sign onto the plan, but they had to find out what to expect. So they mailed surveys to all eligible employees who were not on the plan - and "got a whopping 10 percent response."
After managers interviewed employees individually, the company learned that 79 of the 133 were likely to sign up. The company estimated about 50 or so would follow through, which would mean more than $100,000 in new expenses.
Meanwhile, employees had their own issues to face, Boucher noted. "They were challenged with some tough decisions about their lifestyle or possible employment changes," he said.
Managers and human resources managers heard that some workers were considering working two part-time jobs rather than be faced with having to buy health insurance because of their full-time status at the company. Others figured they would need to work extra shifts to be able to afford their share of the coverage. Some said they would just pay the ACA penalty for not purchasing health insurance.
The restaurant's managers had to grapple with such options as not offering insurance and paying a penalty, reducing benefits for managers, cutting hours for full-time hourly workers or becoming self-insured. But Boucher said they never seriously considered any of those measures.
"Part of our culture has always been when we have a liability staring us in the face, we find a way to turn it into an asset," he said. "And this clearly was a liability."
Great New Hampshire Restaurants decided to become "the employer of choice" in the industry.
"We're going to offer the best health insurance that we possibly can afford and that our employees can afford, and really teach and train our employees about what is happening with the ACA, teach them about the (health care insurance) exchange if they are under 30 hours, and just give them the guidance they need to make decisions themselves," Boucher said.
The company - which grew 4 percent and now has 523 employees - hired a chief of hospitality to help meet a goal to pay for the extra health-care expenses by growing revenue. The only way the company can afford to offer health-care benefits is through better execution of its product and the quality of its service, Boucher said.
As of late March, the company had 190 employees on its health-care plan, an increase of 22 percent. While business owners might like Obamacare about as much as, say, a colonoscopy, Great New Hampshire Restaurants has taken its medicine and found a way to make it work.
"We accepted it and moved on to find the best solution," Boucher said.
Mike Cote is business editor at the Union Leader. Contact him at 668-4321 ext. 324 or firstname.lastname@example.org.