Obama Care Driving Tough Choices for Hoteliers

from Hotel News Now (March 14, 2013):

Robert A. Rauch, president of San Diego-based R.A. Rauch & Associates, which owns three hotels, manages four and provides consulting services to another 12, estimates that by canceling his company’s insurance plan and absorbing the penalties, he can reduce costs from $250,000 a year to about $100,000. The company pays 75% of the monthly premiums for about 57% of the 100 people it employs full-time at the three hotels it owns.

Despite the fact it averages only about 33 workers per property—short of the minimum of 50-per-enterprise that typically requires insurance coverage—the company is liable because its entire payroll functions on a single federal employer identification number. That means that
under the law, it is a single work force and not three.

The irony, under the law of unintended consequences, Rauch said, is that Obamacare could have the opposite of its intended effect at his hotels by causing some employees to lose their current coverage and see their hours reduced.

Like First Hospitality Group, Rauch is now looking at steering employees into an insurance exchange, which could help to reduce his costs while still offering insurance to all full-time employees. “And our thinking right now is that if we can put our employees into the exchanges,” he said, “we will also raise their salaries to help them pay their premiums.”

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