Multi-Unit Franchisee Magazine Issue II, 2012 | Page 60

Health-ScareREFORM
“Unfortunately,this plan has increased
coverage but done zero to address the cost of
healthcare.People forget that insurance and
healthcare are completely different.”
chisee magazine, 4Q11.)
Branca’s company offers health insurance to all full-time employees and
pays 50 percent of the premiums. “In
Massachusetts, we’re required to pay
30 percent, but we pay 50, and we paid
Rob Branca
more before this law was passed. We’re
not allowed to go across state lines for
New England, lives in Massachusetts,
where state healthcare insurance reform
other plans with better rates. I don’t mind
was enacted under former Gov. Mitt
prov iding insurance as a benefit, because
Romney in 2006. That law (“Romneyin our industry we want to keep turnover
care” to its opponents and critics), many
low since that affects our bottom line
say, was the model for the new federal
more than anything. But at some point
it becomes ridiculous,” he says. “Unforplan. “So I can tell you exactly what this
will mean, both personally and profestunately, this plan has increased coversionally,” he says.
age but done zero to address the cost of
“From a personal perspective, it’s been
healthcare. People forget that insurance
harder to get in to see a doctor. Wait times
and healthcare are completely different.”
are longer and service is not as
The IFA’s Caldeira says he
continues to have confidence
good as it used to be. Prices have
in the nation’s franchisees and
gone up. Not only has it not saved
money, but cost increases are
small businesses. “We’re fightaccelerating more rapidly than
ing on the Hill every day, rebefore. The most perverse thing The following is adapted from the IFA-Hudson Institute re- minding our elected officials
I see is how the penalty system port, “The Effects of the Patient Protection and Affordable that 64 percent of all net jobs
works. You can be compliant and Care Act on the Franchise Industry,” September 2011. Full in our country started with
still get penalized.”
copies and summaries can be found on the IFA and Hudson small business.” Franchising,
That happens because the Institute websites.
he says, is poised for modest
law determining whether a plan
The report was based in part on employment and in- growth in 2012 that should
is “appropriate” is so subjective, surance data from 15 franchise businesses from a wide equate to about 168,000 new
says Branca, who also is an at- range of industries: 6 franchisors, 8 multi-unit franchi- jobs and 14,000 new estabtorney. “Most of our employees sees, and 1 single-unit franchisee. Tables show how the lishments. “But the franchise
are not the primary breadwin- law encourages businesses to reduce their number of business could grow so much
ners, and their spouse or parent full-time employees and shift to part-time and temporary faster if there were greater longalready has them on a plan. So employees to gain tax credits, reduce costs, or both; and term certainty on issues such
we have a shop of fully insured how the cost per employee increases as the number of as credit access, healthcare and
people on other plans and a few
tax reform, and a less burdenfull-time employees increases.
who sign up for our plan, but we
some regulatory climate—one
For example, a franchisee with several locations and
still get penalized. We pay thouthat enables rather than stifles
49 employees who does not offer health insurance for
sands of dollars every quarter,”
the kind of growth this country
its full-time employees decides to hire a 50th employee.
he says. “The problem is that the
so desperately needs,” he says.
This triggers the $2,000 penalty, as follows: $2,000 per
Grace of Supercuts has one
program is already broke, so it
worker multiplied by 50 employees, minus an exemption
doesn’t want to give up any of
more suggestion for fellow multifor the first 30 workers. This results in $2,000 times 20
the money it gets in penalties
unit franchisees: “At this point,
employees, or $40,000 annually.
praying is a good idea.”
by trying to fix the regulations.
Companies are following the laws and
are still paying penalties.”
The Dunkin’ Donuts Franchise Owners FedPAC, the Coalition of Franchisee
Associations, and others are working
hard to get these issues addressed in
Massachusetts through regulations, says
Branca, but it’s tough sledding. “The
Supreme Judicial Court of Massachusetts just struck down a regulation that
limits the ability of legal immigrants to
participate in the plan. That’s unconstitutional, but it saved the state $150
million for a year,” says Branca, whose
wife’s family emigrated from Portugal
to become major Dunkin’ Donuts franchisees all across New England. (For an
in-depth profile, see Multi-Unit Fran-

Study Shows
Reform’s Costs

58

Multi-Unit Franchisee Is s ue II, 2012