Who are you? Answer is critical for health care reform

As a restaurant operator seeking to comply with the provisions of the health care reform law, the first question you probably should ask yourself is who are you? Are you a family-run carry-out, or a major chain? Are your workers full-time, part-time, seasonal? Do you currently offer coverage, or not?

First of all, yes, size matters. It matters a lot. If you’re what the law calls a “large applicable employer,” you are required to meet a set of regulations including a mandate to offer “minimum essential coverage” to all full-time employees.

The threshold for determining large employers is 50 full-time equivalents (FTEs). Simple enough, but what is an FTE? The law says you must count all full-time employees, plus the total number of hours worked by part-timers each month divided by 120, the equivalent of a 30-hour workweek.

If you’ve got less than 50 FTEs, the law’s effect on your business will likely be minimal. You don’t have to offer health care coverage to your employees and, if you do, you may qualify for a special small employer tax credit to help you pay for it. Qualifying for a tax credit of as much as half of coverage costs also depends on who you are. You must have fewer than 25 FTEs, using a 40-hour workweek calculation, and pay at least 50 percent of the cost of coverage for your full-time salaried and hourly workers.

If you have 50 or more employees, then you must offer minimum coverage to all of your full-time workers or pay penalties. Even though part-time and most seasonal workers are included in the FTE calculation, you are only required to offer coverage to full-time salaried and hourly workers.

Some operators are finding that the cost of offering coverage to all full-time employees exceeds the cost of penalties for failing to do so. This could lead some businesses to consider offering less, not more, coverage.

At the same time, some restaurant operators are considering the 50-FTE threshold in deciding if they want to expand their businesses or hire more workers.

How much the new law will cost your business can only be determined through complicated calculation on a business-by-business basis, but you can get a rough idea by comparing your operation with those in a series of case studies included in the National Restaurant Association Health Care Knowledge Center.