Debbie and Larry Underkoffler, opened a boutique staffing agency in the middle of the Obama recession and have always taken good care of their employees, but thanks to Obamacare, they are forced into throwing them to the wolves. They have 400 temporary workers and want to add another 200 this year, but buying them all an Obamacare policy is too expensive and they have decided to pay the $2,000 fine for not providing coverage.
Although they only have 18 fulltime employees, under Obamacare rules, temporaries who work over 30 hours a week are eligible for coverage. That would take them to about 200 employees and put them over the top and into mandatory coverage.
The Onderkofflers worked hard to build up their business. “I would bake sourdough bread, and I made homemade strawberry jam, and deliver it to my prospects. I would also deliver homemade cookies.” And their 18 full-time employees get generous healthcare benefits, which they will now lose since Obamacare does not allow a company to have different policies between full-time workers and part-timers.
It looks like we will have to just pay the penalties.”
By paying the penalties, it will cost their business $400,000 a year which greatly diminish their profit margin, but not as badly as the 2 million it would cost to insure them. Some call this an unintended consequence of the law, but I submit that this is exactly what the law was designed to do and once everyone is in the government exchange, they will convert it to a single payer system, like the ones that work so well in Canada and Great Britain.
With a year’s delay in the employer mandate, they are hoping for some relief with the current rules but neither is optimistic.
“I haven’t seen any thus far. And certainly with the situation in Washington right now, they seem to be kicking the can down the road.”
Steven Ahle is the Editor of Red Statements.