Durham Two Men and a Truck franchisees lobby lawmakers
The owners of a Two Men and a Truck franchise in Durham voiced their concerns to lawmakers in Washington, D.C., recently about the federal health care overhaul, which they say could affect how much they can pay their employees or how much they can invest in growth.
Brooke and Les Wilson expect to see health care cost increases after the full roll-out of the law. They were in the nation’s capital for an International Franchise Association conference, and took time to meet with lawmakers to talk about potential impacts of the law on their business
“As a business, we’re at the point where we really need to evaluate cost and how the (Affordable Care Act) is going to affect our business, but the interpretation and enforcement is so … there is so much uncertainly,” Brooke Wilson said.
Between the Durham franchise and other locations they own, Brooke Wilson said they employ between 200 and 250 people. In Durham, they employ 60, and they also have another 60 in Raleigh. The rest of their employees work at locations they own in Burlington, Greenville, and at two branches in the Atlanta area. They’re planning to add a seventh location as well.
Under the health care law, they expect to be considered as one single organization of several businesses that have common ownership. The law requires businesses with 50 or more full-time employees to provide health insurance benefits for full-time workers or face a penalty, starting in 2015. Employees are considered full-time if they work more than 30 hours. That particular provision was originally set to take effect next year, but was postponed.
Les said they already provide health and dental insurance for employees, but they’re expecting more of their employees to elect for coverage because of the individual insurance mandate.
They’re estimating that they will see their health insurance costs increase by $100,000 to $120,000 per year after the full roll-out of the law. Les Wilson said he believes the “biggest obstacle” for them may be primarily from rising costs of premiums from their insurer.
“That’s going to be where a significant amount of costs come from…,” he said. “I think it’s a knee-jerk reaction to the uncertainty.”
And as far as the additional costs go, Brooke Wilson said they don’t have enough in their profit margin to soak up additional expected costs.
To cover the costs, they’re looking at potentially not adding trucks to their fleet. She said it may affect how much they pay hourly employees, or it may be passed along in increased costs to the consumer.
However, she said they’re not planning to cut employees’ hours to part time. They believe cutting hours wouldn’t foster the type of culture they need to deliver what they see as a highly personalized service.
“We pride ourselves on the culture we’ve created in our network,” Les said. “That would be a very quick way to end that culture.”
Brooke Wilson said that because of uncertainties regarding the law, “it’s tough to say” when they would look to implement the changes.
“We are still trying to understand the (Affordable Care Act) and how it will affect our business,” she said in an email.
Lindsey Surratt, an attorney who works as compliance officer for Hill, Chesson & Woody, a Durham-based health and welfare consulting firm, said some business owners are waiting to make changes as a result of the delay, but the “prudent ones” are starting to prepare.
The overhaul is “pretty burdensome” on franchisees, she said. Employees at multiple locations are counted together so they often have more than 50 workers, she said, and they also generally have a high population of part-time and variable-hour workers.
There’s a provision of the law to help employers who have workers who may work more or less depending on the season. That provision allows employers to measure an employee’s hours over a period of time to determine if they’re full-time or not. But Surratt said that also creates an administrative burden.
In reaction to the law, Surratt said they’re seeing businesses shift to employing more part-time workers, she said. She also said they’re seeing some increases from insurance carriers. In addition to the expected annual increases, she said they’re also seeing taxes and fees from the overhaul being passed through.
Adam Searing, director of the health access coalition for the N.C. Justice Center, a Raleigh-based group that advocates for low-income people, said he believes larger companies could shop around for better rates if they’re seeing increases from their insurer. He also said he believes the overhaul “gets everyone in the system” and after that’s done, he said the focus can shift to fixing rising cost issues.
“Heath care costs are increasing a lot less than they ever have,” he also said. “We need to do more, but let’s not fly off the handle.”