Starbucks not cutting health insurance, hours for Obamacare

Aug. 27, 2013

Starbucks CEO Howard Schultz told Reuters Monday that the company will not cut health insurance benefits or reduce employee hours to prepare for costs associated with Obamacare.

Obamacare, or the Affordable Care Act, is expected to be implemented in 2014. Many restaurant chains and franchisees have taken the opposite approach.

"Other companies have announced that they won't provide coverage for spouses; others are lobbying for the cut-off to be at 40 hours. But Starbucks will continue maintaining benefits for partners and won't use the new law as excuse to cut benefits or lower benefits for its workers," Schultz told Reuters.

Obamacare requires companies with more than 50 employees to offer health insurance for employees who work 30 hours a week or more. Starbucks currently provides healthcare to part-timers who work 20 hours a week or more. A majority of the company's units are company-owned.

Many mostly franchised chains have taken the opposite approach ahead of the law going into effect. Carl's Jr./Hardee's CEO Andy Puzder recently said the impending regulations will lead to more part-time employees and the deployment of more self-service ordering kiosks.

Franchisees from Taco Bell to Wendy's have also already cut employee hours to avoid the Obamacare mandate.

Instead of cutting hours, other chains, including Dunkin' Brands, are lobbying to redefine the definition of "full-time" employee status, as it is currently written in the law.

The National Restaurant Association and the International Franchise Association also support the redefinition of full-time, from 30 hours to 40 hours a week.

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