According to a Mercer survey of approximately 1,200 employers, retail and restaurant industry employers are more likely to drop their health plans or cut workers' hours when some requirements of the Patient Protection and Affordable Care Act take effect in 2014. The Act requires employers with 50 or more full-time employees, defined as those working at least 30 hours a week, to offer health insurance coverage. If a covered employer fails to offer health insurance and at least one of its employees turns to the government for coverage, the employer must pay a penalty.
The survey revealed that approximately 46 percent of restaurant and retail companies said they would have to change in some way once the law goes into effect. By comparison, only 16 percent of financial services companies said that they anticipated making similar changes. A representative of McDonald's Corp. determined that each of its restaurants would incur additional annual costs of between $10,000 and $30,000. A representative of Papa John's International estimated that the law's requirements would add 11 to 14 cents to the cost of a pizza.
The Mercer survey indicated that retail employers who do not currently offer health insurance coverage are more likely to consider cutting employees' hours to avoid the requirements of the law. The survey showed that approximately 9 percent of retail and hospital employers were considering dropping their existing health plans in 2014, compared with 6 percent of companies in other sectors. On the other hand, manufacturing employers said they were more likely to create new health plans or expand existing plans in response to the law.