David Barr, who owns 23 KFC and Taco Bell outlets in Alabama and Georgia, started with two KFCs in 1998 and expanded the number of outlets in his franchise portfolio every single year until details of the proposed federal health care insurance plan began to emerge early after President Obama’s inauguration. Since then, Barr hasn’t added any restaurants.
“I have zero desire to expand until the uncertainty goes away,” Barr said, adding that he’s even thinking about downsizing.
Signed into law in 2010 and recently upheld by the Supreme Court, the Patient Protection and Affordable Care Act, or ACA, requires that employers with 50 or more full-time or “full-time equivalent” employees provide health insurance to full-time employees by 2014 or pay a penalty. For each block of 30 weekly hours of part-time work by one or more employees, a business is deemed to have one full-time-equivalent employee.
Currently, Barr provides health insurance for only 30 managers or office personnel. But under the ACA’s rules, starting in 2014, he will have to extend insurance coverage to an additional 134 full-time employees among his 424 workers. “By any definition, the law applies to us.” Barr said. “If we fully implement the law, we’ll have to just file for bankruptcy.”