Papa John’s CEO John Schnatter says he will pass on the mandated costs of President Obama’s health insurance reform onto his workers. Schnatter said he will likely reduce workers’ hours, as a result of President Obama’s reelection. He estimates that the new law would cost his business $5 to $8 million annually.
Schnatter made headlines over the summer when he told shareholders that the cost of a Papa John’s pizza will increase by between 11 and 14 cents due to Obamacare.
“I got in a bunch of trouble for this,” he said inside a small auditorium at Edison State College’s Collier County campus in Naples. “That’s what you do, is you pass on costs. Unfortunately, I don’t think people know what they’re going to pay for this.”
Schnatter went on to say that “the good news is 100 percent of the population is going to have health insurance, We’re all going to pay for it.”
About a third of Papa John’s employees are covered by the company’s health insurance plan, although Schnatter said he has always wanted 100 percent of them on the plan but the rising costs of health insurance have been a deterrent.
Obamacare mandates that only employees that work more than 30 hours per week be covered under their employers health insurance plan. Darden restaurants, the parent company of Olive Garden and Red Lobster, has already begun reducing workers hours in anticipation of the legislation. McDonald’s Corp. Chief Financial Officer Peter Bensen noted in a conference call with investors that the hamburger chain was looking at the many factors that will impact health care costs, including its number of full-time employees. Jimmy John Liautaud, founder of Jimmy John’s sub shacks, told Fox Business News that like a lot of small businesses, his firm is considering cutting hours of workers to 28 to get under the Obamacare cap.
“We have to do that. There’s no other way we can survive it, because we think it will cost us 50 cents a sandwich. That’s just the actual cost,” he told Fox. “If you have 40 or 50 employees at a restaurant, and the penalty is $2,000, and you’re going to pay $80,000 or $100,000 penalty, there goes the profit in your restaurant,” he added.
Applebee’s has responded to the added costs of health insurance reform much harsher saying that they won’t hire new workers because of the law.