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Valley Businesses Brace for Impact of Health Care Reform

By Angela Greenwood, KSEE24 News
March 7, 2013 Updated Mar 7, 2013 at 8:20 PM PDT

President Obama's health care reform is drawing criticism from some Valley businesses. Companies will soon have to offer benefits to more employees, but owners say the plan could cripple jobs.

Legislation aimed at protecting employees, could actually hit them where it hurts most, their bottom line.

"When we're in a time when we're trying to increase employment opportunities or increase the hourly rate of position, this kind of hinders some of that, although I know the intentions are good in trying buy healthcare," says Debbie Astone, associate vice president for Fresno State auxiliary corporation.

In January, President Obama's Affordable Health Care Act takes affect. The organization that employees hundreds of workers at Fresno State is bracing for impact.

Astone says, "It is a significant cost and it's not something that we can offer to everyone who is currently working 30 hours or more."

Companies are left with two choices. They can offer healthcare to any employee who works more than 30 hours a week, or they can pay a penalty upwards of $2,000 for each uninsured worker. For about 40 part time employees on campus, this means hours could be cut.

"They might have to have a second job in addition to the one that they've been able to rely on for those hours."

The reform will take a toll on every business with 50 or more employees. At Sal's Mexican Restaurant, the cost will be huge. Close to eighty workers could have their hours slashed. Owners even mentioned possibly shutting down one of their three locations.

Lorraine Salazar says, "I really hate to think that this is what the Affordable Health Care Act is meant to do, which is to affect jobs. We're in an economy where we need to be growing jobs, and the people that are growing jobs are the small businesses and the local businesses."

If a company decides to pay the penalty instead of offering insurance, the employee would then be required to purchase their own insurance. If they don't, they will also be hit with a penalty.

Students who work part-time at Fresno State will not be affected. They're only allowed to work 20 hours a week as it is.

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