Eating out is getting more expensive every day. The price of food, especially beef is going up and restaurants naturally have to pass that cost on to diners. Some restaurants are passing more than just the cost of food on to their patrons.
A growing number of high-end restaurants in Los Angeles and San Francisco are surprising customers with an additional 3% surcharge added to their bill. The surcharge is to help cover the costs of employee healthcare which is being mandated by Obamacare.
It’s already bad enough when some restaurants automatically bill you for the tip or gratuity of 15% to 25%. How can it be a gratuity if you are billed for it? I was always taught that a tip is given as a generous way of saying thank you for the service, but I begrudge someone else telling me how much I HAVE to tip.
But add another 3% Obamacare employee healthcare surcharge to a $100 meal and you’re looking at paying a grand total of up to $128, depending on how much they require from you for the tip.
Some diners are not happy about the added surcharge. One unhappy customer used his/her blog to vent some displeasure, posting:
“It’s basically management saying ‘Obamacare made me do it.’ If you want to offset costs, try turning up the thermostat. There’s your 3%! Now please pay your workers’ health insurance and hush.”
I wonder what the same customer would say if he/she had gone into the same restaurant and found it to be uncomfortably warm. Would they have been satisfied to sit there and sweat during their meal if the management had told them they turned the thermostat up in order to save enough on their energy bill to pay for their employee healthcare?
It also tells me that the complainer has no clue as to how much employee healthcare costs an employer. Most of the figures I’ve seen says it costs $7,500 to $15,000 a year to meet the minimum standards invoked by Obamacare. The penalty for not providing healthcare to employees is only a couple thousand dollars. You do the math.
The American Health Policy Institute conducted a study on the additional costs of employer provided healthcare and stated that the Affordable Care Act:
“Imposes additional costs of $4,800 to $5,900 per employee over the course of a decade. The total cost of the Affordable Care Act to all large U.S. employers over the next 10 years is estimated to be from $157 billion to $186 billion.”
“As a result, employers are coping with the high costs of providing healthcare in a number of ways, including changing their employment practices and work-related financial arrangements.”
Jot Condie, President and CEO of California Restaurant Association told the media:
“Once it starts you are going to see other segments in the industry, whether coffee shops or ice cream shops, dip their toe in if they see it’s manageable and customers do not revolt.”
Joe Loeb, Co-owner of Milo & Olive and Rustic Canyon Restaurants told the media:
“We want our staff to have healthcare. It’s not because we support Obama or don’t support Obama, or are Democrats or are not Democrats.”
Some restaurants have considered the idea of just raising the price of items on the menu by 3% but discovered that it would cost them more to preprint menus and make other changes. It’s cheaper for the customers to just pay a flat 3% surcharge than paying higher prices for the food and drinks they consume.
“‘ACA has fundamentally changed the healthcare landscape, affecting premiums, small business wages, and employment,’ estimating the costs so far at $22.6 billion in lost income and 350,000 small business jobs. ‘We expect this trend to strengthen as the administration fully implements the employer mandate.’”
The bottom line is that as the employer mandate starts being enforced in January; expect to pay more in surcharges at restaurants and overall higher prices for many goods and services. Employers have to get the extra money from somewhere and the only place available to them is you and me.