INDIANAPOLIS (AP) — The federal health care overhaul is causing many Indiana
employers to wrestle with decisions on whether to provide health benefits to
workers who aren’t typically eligible for most company plans or trim their
hours to avoid extra costs.
The 2010 Patient Protection and Affordable Care Act requires companies to
begin offering health insurance to employees working at least 30 hours a
week beginning next year. Employers with more than 50 workers that fail to
offer health benefits for qualifying staff can face steep fines.
The law also creates online health insurance exchanges to offer workers
coverage instead of their having to rely on employers. But it could bring
big expenses to some companies, the Indianapolis Business Journal reported.
“This is a very, very big challenge for the company, and for most other
companies,” said Charlie Young, chief human resources officer for
Indianapolis-based electronics and home products chain HHGregg Inc. “There’s
a lot of ambiguity out there as we approach 2014, and we’re only 11 months
away. It’s pretty intimidating.”
HHGregg has 6,600 employees, 90 percent of whom work full time and are
eligible for the company’s insurance plan. The company expects that
expanding coverage under the law could add up to seven figures to its costs.
Some of that expense will be offset by tax benefits HHGregg expects to
receive by offering the insurance, Young said.
“We’re pretty emphatic about keeping our program as we move forward,” he
The decision isn’t as easy for some other employers, especially those in the
retail, restaurant and hospitality sectors. Many employees in those
industries work less than 40 hours a week and typically receive no health
benefits. Those benefits that are offered are usually limited and would fail
to meet the minimum coverage requirements under the health care law.
John Schnatter, CEO of the Papa John’s pizza chain, drew criticism when he
said his Louisville-based company might cut employee hours rather than pay
for the insurance. The statement sparked threats of boycotts and prompted
Schnatter to say the chain would continue offering insurance to its
Scott Wise, who operates Scotty’s Brewhouses and other restaurants
throughout Indiana, says he has about 130 salaried employees who will be
affected by the law and is weighing his options in hopes he can avoid
cutting their hours so he doesn’t have to pay for health insurance.
“Full-time staff are some of your best employees,” he said. “Those are some
of your most loyal, hardest-working people.”
“I don’t know what the right answer is,” Wise said. “I understand that we
want the world to have affordable health care; I just don’t know that you
have the ability to do it in a perfect world.”
Jay Ricker, president of Anderson-based Ricker Oil Co., a chain of 49 gas
stations operating locally under the BP brand, said he expects to expand
coverage to his 650 employees, many of whom work part time, and pay the
additional cost from profits. But he says some companies won’t be able to
afford that option.
could go out of business or go to all part time,” he said. “I think it’s
going to be a huge issue.”