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August 20, 2012

Healthcare Reform and the Price of Pizza

Filed under: General HR Buzz9:00 am

Regardless of our opinion regarding healthcare reform, most people agree that healthcare reform may increase our costs.  Premiums have already risen as our health insurance coverage was expanded to include coverage of dependents to age 26 and 100% coverage for preventive care services.  These two additions increased the rate of premiums for most insurance plans anywhere from 2% to 8%.

Did you know, however, that the health care reform law will increase the price of pizza?  It’s true, that is if you are ordering a Papa John’s pizza.  This announcement was made at Papa John’s shareholders’ meeting a couple of weeks ago.  According to CEO John Schnatter, “Our best estimate is that ‘Obamacare’ will cost 11 to 14 cents per pizza.”

I remember reading about the additional tax on suntan beds in the healthcare reform law, but I didn’t recall anything with reference to pizza.  Well, there is reference to pizza, although indirectly.  Many employers who previously did not have to provide healthcare coverage for part-time workers will be required to do so or be subject to penalties.  Under the law, employers will be liable for $2,000 per employee penalty if just one full-time employee (defined as any individual working at least 30 hours a week) is not offered qualified coverage, effective in 2014.  This part of the law will affect Papa John’s as they will now be required to cover part-time employees, so you can see where they are coming to this conclusion of increased costs.

Who else may be affected by this penalty?  According to a survey conducted by Mercer L.L.C., employers in the hospitality industry may be hit hardest as 46% of employers expect their health care plan costs to rise by at least 3% in 2014.

We don’t know what the future election may do to the healthcare reform law.  But we should become familiar with the health care reform law so we can plan and budget accordingly…including our company pizza parties.


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