Author: Rick Bell

Say what you will about the hype surrounding “Papa John” Schnatter’s claim that health care reform will force him to hike the cost of a pizza by more than a dime.

Whether or not you like his pies, it appears he’s right. And though the full financial effects are still hazy, research suggests health care reform will increase costs for most firms.

In early August, Schnatter, the international pizza chain’s CEO and TV pitchman, told shareholders, “Our best estimate is that Obamacare will cost 11 to 14 cents per pizza” once health care reform fully takes hold in 2014. Obamacare, of course, is the term often used when referring to the Patient Protection and Affordable Care Act of 2010, which was upheld with the U.S. Supreme Court’s 5-4 verdict earlier this summer.

The company’s strategy, Schnatter added, would be to pass the cost onto consumers to protect the best interests of its shareholders. The current nationwide drought and spiking gas prices are cost-boosting justifications for price hikes that we’ve heard before. But this is the first time since the ruling that a big company has publicly cried cause-and-effect regarding health care reform on its operations and profits.

Politics apparently has joined the menu — at least through November — alongside carmelized onions and fennel as new pizza toppings. Schnatter, a well-known conservative who has hosted fundraisers for Republican presidential nominee Mitt Romney, is taking dead aim at President Barack Obama’s health care reform plan. Yet, whatever the political ploy, Schnatter’s proposed price hike is baked in fact.

The day before Schnatter’s pie-pricing plan was announced, consultancy Mercer released a study that retailers and hospitality employers are facing big cost increases in 2014 because of health care reform. Companies in those particular industries — Papa John’s falls somewhere between — rely on low wages and high volume to prop up profit margins.

More importantly though, companies like Papa John’s will be compelled to change their health plans come New Year’s Day 2014.

According to Mercer’s survey of 1,203 retail and hospitality industry employers, 46 percent said they’ll have to upgrade their plans to meet federal standards extending coverage to employees working at least 30 hours a week. Employers that choose not to offer qualified coverage will be charged $2,000 per full-time employee — those working at least 30 hours a week — starting in 2014.

That would be in the neighborhood of a 3 percent hike in health care cost increases because of the law’s requirements, the Mercer study notes.

While hospitality companies and retailers may be grumbling about the future under their breath, there’s probably a silent cheer among them for Papa John’s defiant stand. Since offshoring pizzas are an unlikely option, Papa John’s will have to pony up one way or another. If Schnatter follows through with his vow to hike a $7.99 pie to $8.12, then so will you, pizza-eater.

But then again, there could be alternatives. And I’m not talking about a GOP win in November. If health care reform has accomplished nothing else, it puts one of business’ biggest, fattest elephants square in the middle of the room. How will you manage health care for your employees?

Several recent studies validate that the vast majority of employers will continue to offer employee health care beyond 2014. Simply put, employer-provided health care is entrenched in the American way of doing business. What that looks like and who pays what portion remains to be seen.

This is where Schnatter and other employers — retail, hospitality or otherwise — can play a crucial role in shaping a truly vital employee benefit.

The September issue of Workforce Management explores several health care delivery methods with the potential to curb employer costs and still provide quality coverage. Some, like value-based insurance design and direct primary care, could be the wave of the future. Workplace clinics, which have existed for decades, are undergoing a huge renovation.

If politics is Papa John’s newest pizza ingredient, then working to provide better health care should be baked into the recipe.

Rick Bell is Workforce’s managing editor. Comment below or email editors@workforce.com.

Workforce Management, September 2012, p. 34 — Subscribe Now!

Anticipation surrounding the Supreme Court’s decision on health care reform has kept HR executives in a frustrating state of suspended animation for much of the year.

So I figured that on the cusp of the high court’s ruling, health care reform would be the overwhelming topic of discussion once I was among the 12,000 or so attendees at the Society for Human Resource Management’s confab in late June.

But I didn’t think I’d be chatting about it before I hit the 64th annual soiree in Atlanta.

No sooner did I get on the plane in Chicago that I met an HR director from a 400-employee specialty hospital in Omaha, Nebraska, who also was headed to the conference. It took no time to realize our expectations paralleled each other’s: She wanted to learn about health care reform, and I wanted to cover the anticipation and detail the collective HR world’s reaction to the court’s ruling on the Patient Protection and Affordable Care Act.

As it turned out, we were not alone in the search for a guiding light to illuminate our path to health care reform enlightenment. At the baggage carousel I overheard two other people talking about the pending ruling. I guessed they were SHRM attendees. They concluded their discussion with one woman turning to the other, uttering an exasperated sigh, “I just wish they’d get it over with.”

Well, they were expected to—the day after the conference ended. Once it was apparent early into SHRM’s first full day on June 25 that a ruling wouldn’t be handed down until June 28, several sessions on health care reform—which not surprisingly were packed to the gills—buzzed with tweets and talk about the delay.

Those justices sure know how to build the suspense.

Call it what you want: impatient anticipation, anxious annoyance, eager hope for the future or outright dreaded fear of the unknown, but health care reform is the gift that indeed will keep on giving. To say health care reform is landmark, game-changing legislation that alters the way HR departments implement benefits is an understatement. Not only was the HR director I met seeking some measure of clarity on how she and her staff would implement it for hospital employees, but also she knew health care reform would alter her field in general.

In the six years I’ve been at Workforce Management, I cannot recall an issue that created the angst and heartburn that health care reform has stirred up for HR practitioners.

Still, there’s a familiar feel to the furor facing the profession. Shake-ups around people management aren’t new—something I’m especially aware of as Workforce Management celebrates its 90th year of publishing. Once again, we are writing about something that measurably reshapes the responsibilities of HR departments across the board.

As I spent two days late last year reading over the archives of Workforce Management and its predecessor, Personnel Journal, what struck me most was no matter how much it seems the role of HR leaders has changed throughout the years, the more it remains the same.

Whether it was 1946 or 1996, it seemed issues that are bandied about today were the same basic concerns of personnel managers and HR executives throughout the past 90 years.

Issues such as employee engagement, managing problem workers and coping with unions has been keeping HR managers reaching for the Bromo-Seltzer for decades.

Perhaps most important, HR people have tussled with legal compliance. The implications of 1938’s Fair Labor Standards Act and 1964’s Title VII continue to reverberate today.

Health care reform will likely be no different. Whatever the nuances of the Affordable Care Act ultimately may be, HR departments and benefits managers will be on the front lines of corporate compliance and implementation.

With benefits enrollment season approaching, HR directors like my new acquaintance from Omaha will be understandably busy. Our state of suspended animation around health care reform has now expired, and a new frustration around having to move fast is just beginning.

Rick Bell is Workforce Management’s managing editor. Comment below or email editors@workforce.com.

Workforce Management, July 2012, p. 58 — Subscribe Now!