Olive Garden And Red Lobster To Cut Workers Hours In Advance Of Obamacare…

Prepping for Obamacare, Chain Cuts Workers' Hours

The owner of Olive Garden and Red Lobster restaurants is putting more workers on part-time status in a test aimed at limiting the impact of looming health coverage requirements.

Darden Restaurants [DRI  54.74    -0.36  (-0.65%)  ] declined to give details but said the test is only in restaurants in four markets across the country. The test entails increasing the number of workers on part-time status, meaning they work less than 30 hours a week. Under the new health care act, companies will be required to provide health care to full-time employees by 2014. That would significantly boost labor costs for businesses.

About 75 percent of Darden's employees are currently part-timers.

Bob McAdam, who heads government affairs and community relations for Darden, said the company is still learning from the tests, which was first reported by The Orlando Sentinel.

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"We're not at a point where we have results," he said. McAdam also noted that Darden is not alone in looking at ways to keep labor costs in check, with companies industry wide prepping for the new regulations to take effect.

Darden, based in Orlando, Fla., has made cost cutting a priority in recent years as sales growth and traffic have stalled at its flagship chains. In the most recent fiscal quarter, the company's restaurant labor costs were 31 percent of sales. That's down from 33 percent three years ago.

The reduction was driven by several factors. Given the challenging job market, Darden has been able to offer lower pay rates to new hires. Bonuses for general managers have been reduced as sales have stagnated. Servers at Red Lobster are handling four tables at a time, instead of three.

Via: CNBC

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Issa Threatens To Subpoena HHS Over Medicare Bonuses

Rep. Darrell Issa (R-Calif.) said Thursday that he's willing to subpoena documents from the Health and Human Services Department (HHS), alleging a conspiracy to hide the impact of President Obama's healthcare law.

Issa, as chairman of the House Oversight and Government Reform Committee, is investigating an $8 billion demonstration project in which Medicare pays bonuses to certain private Medicare Advantage plans based on quality.

The congressman has suggested that HHS is using the bonus payments to mask the healthcare law's cuts to Medicare Advantage plans ahead of the election.

Issa and Rep. James Lankford (R-Okla.) requested documents about the bonus payments in August. They said Thursday that they haven't gotten a response and said they "will consider the use of compulsory process" if HHS doesn't turn over the documents by Oct. 5.

A committee spokeswoman confirmed that a "compulsory process" includes subpoenas.

Obama's healthcare law made several cuts in government payments to privately run Medicare Advantage plans, including a new system for giving bonus payments to high-quality plans. 

But in November 2010, HHS announced that it would not immediately implement the health law's changes, and would instead test a different system — the demonstration program Issa is investigating. The demonstration program will mean bigger payments, delivered earlier, to more plans, according to the Government Accountability Office.

GAO recommended that HHS cancel the demonstration, which it estimates will cost $8.3 billion over 10 years. Issa has repeatedly emphasized GAO's recommendation, saying it's the first time the auditing and investigative office has taken such a step.

Issa has suggested that HHS is using the added payments under the demonstration program to ensure that seniors won't see fewer Medicare Advantage options before the election

Via: The Hill

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NYT: OBAMACARE 'AMBIGUITY' COULD MAKE HEALTH CARE TOO COSTLY FOR MILLIONS

The New York Times reports that an “ambiguity” in President Obama’s signature health care law may make the Affordable Care Act unaffordable for millions of American workers and their families.

Ironically, the glitch is Clintonesque in nature, over the meaning of the word “affordable.” The definition of the word could have enormous practical repercussions in decisions about who obtains government assistance for health insurance.

Under rules proposed by the Internal Revenue Service, which will carry out some of the primary provisions of Obamacare, some working class families would be unable to afford employer-sponsored family coverage health care benefits and yet would also not qualify for subsidies granted in Obamacare. In other words, these workers and their families will fall between the cracks of the language of the legislation.

For a family whose annual income is $35,000 and who pays $4,130 -- or 12% of income -- for family health care coverage sponsored by an employer, the costs would be considered “affordable” under IRS rules. Under Obamacare, however, employer-sponsored health insurance is considered “unaffordable” if a worker pays a premium of more than 9.5% of the worker’s household income. The IRS argues that this calculation should be based only on the cost of individual coverage for the employee, not coverage for a spouse or children. Thus, the family would not be eligible for government subsidies to buy private health insurance in the states’ exchanges.

Via: Breitbart

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Obamacare 'Glitch' Screws Middle Class

Ambiguity in Health Law Could Make Family Coverage Too Costly for Many

The new health care law is known as theAffordable Care Act. But Democrats in Congress and advocates for low-income people say coverage may be unaffordable for millions of Americans because of a cramped reading of the law by the administration and by the Internal Revenue Service in particular.

Under rules proposed by the service, some working-class families would be unable to afford family coverage offered by their employers, and yet they would not qualify for subsidies provided by the law.

The fight revolves around how to define “affordable” under provisions of the law that are ambiguous. The definition could have huge practical consequences, affecting who gets help from the government in buying health insurance.

Under the law, most Americans will be required to have health insurance starting in 2014. Low- and middle-income people can get tax credits and other subsidies to help pay their premiums, unless they have access to affordable coverage from an employer.

Via: New York Times

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