Multi-Unit Franchisee Magazine Issue III, 2014 | Page 56

HEALTHY
CHOICES?
BY KERRY PIPES

Franchisees have only 6 months
to comply with the ACA

I

t’s mid-2014 and nearly every
American is required by the government to have health insurance
coverage as outlined under the
Affordable Care Act (ACA). However,
multi-unit franchisees, who have been
anxiously tracking the ACA, were granted
a temporary reprieve and are not required
to offer full-time employees insurance
coverage until January 1, 2015.
But that’s not stopping some franchisees from taking a proactive approach,
offering their full-time employees coverage now. Others are taking a wait-untilit’s-required approach. They both have
compelling reasons.
Just the facts

The ACA was passed on March 23,
2010, upheld by the Supreme Court
in 2012, and has been through more
than 50 votes in the House to repeal,
change, or otherwise weaken it.
So far, there have been two employer
mandate delays from the Obama administration in implementing the law.
The first occurred last July and delayed
the employer mandate by one year for
all businesses. The second came this
past February, when the administration
announced that the deadline for “mid-

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MULTI-UNIT FRANCHISEE IS S UE III, 2014

sized” companies (those with 50 to 99
full-time equivalent (FTE) employees)
to comply with the law’s requirements
had been extended to 2016.
The administration also announced
that “large” companies (100+ FTEs)
must offer “minimal” and “affordable”
insurance to at least 70 percent of their
full-time (30+ hours) workforce starting in 2015, increasing to 95 percent in
2016; these companies will have until
2016 to add coverage for the additional
25 percent. By most accounts, this latest announcement was made to phase
in the employer mandate and minimize
labor market disruption. Businesses
that employ fewer than 50 FTEs have
no obligation under the law to provide
health insurance coverage.
Certain “small” businesses (fewer
than 25 FTEs with average wages below
$50,000) may be eligible to receive the
small-business healthcare tax credit. To
qualify, employers must contribute at
least 50 percent toward full-time employees’ health insurance premiums.
Businesses that meet these qualifications will be required to apply for the
tax credit on IRS Form 8941 when filing returns for the business.
For employers with more than 200

employees, the ACA will eventually
require automatic enrollment for all
new, eligible employees. However, any
employee who does not want to be covered can opt out.
Beyond the complexities of implementing the law are the strategic business decisions many franchisees must
face. One result is that some franchisees
are having second thoughts on any expansion plans in the near future. Others are cutting back on full-timers and
hours to reduce the number of FTEs
the law requires them to cover.
We asked three franchise operators
with dozens of units and one franchisor
with 31 company-operated units what
they’re thinking about the new law,
how they’re dealing with its requirements, and how—and when—they plan
to provide health insurance options to
their employees.
“Large” employer faces
uncertainty

Like any successful business owner, Dawn
Lafreeda understands the importance of
a healthy workforce. Although Lafreeda
sees the value in providing healthcare
insurance to her employees, the cost of
implementing the ACA is not lost on