The Corner

The Obamacare Surcharge

With extra costs from the Obama health law in mind, one Florida franchise owner is making a statement:

“If I leave the prices the same, but say on the menu that there is a 5 percent surcharge for Obamacare, customers have two choices. They can either pay it and tip 15 or 20 percent, or if they really feel so inclined, they can reduce the amount of tip they give to the server, who is the primary beneficiary of Obamacare,” [John] Metz [a franchise owner of Hurricane Grill & Wings] told The Huffington Post. “Although it may sound terrible that I’m doing this, it’s the only alternative. I’ve got to pass the cost on to the consumer.”

… He planned to use the 5 percent surcharge tactic in all his restaurants starting in January 2014, when Obamacare is fully implemented.

Like Red Lobster, Papa John’s, Applebees, and other low-wage employers, Metz says he’s also being forced to cut his workers’ hours.

Metz said he understands the problems that will create not just for his scheduling but for his employees. “I think it’s a terrible thing. It’s ridiculous that the maximum hours we can give people is 28 hours a week instead of 40,” Metz said. “It’s going to force my employees to go out and get a second job.”

Despite the one-two hit his employees might take with possibly fewer hours and lower tips, Metz said he is not anti-insurance. His current coverage for full-time employees costs him $5,000 to $6,000 annually, he said. “Obviously, I’d love to cover all our employees under that insurance,” he said, “But to pay $5,000 per employee would cost us $175,000 per restaurant, and unfortunately, most of our restaurants don’t make $175,000 a year. I can’t afford it.”

Metz is basically volunteering for the anti-employer backlash that’s already begun — a risky business move, for sure.

But at least there’s an honesty to Metz’s Obamacare surcharge: Instead of just subtly hiking prices, he’s making sure consumers know exactly why the cost of eating out has gone up.

Is this a good strategy, readers?

Jillian Kay Melchior — Jillian Kay Melchior writes for National Review as a Thomas L. Rhodes Fellow for the Franklin Center. She is also a senior fellow at the Independent Women’s Forum.

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