Starting this month, businesses in Alaska with more than 100 full time workers have to provide health insurance. And under the Affordable Care Act “full time” is any employee who works more than 30 hours a week. Senator Lisa Murkowski is sponsoring legislation that would change that threshold to 40 hours. Many restaurants owners in Anchorage are watching the legislation closely.
It just after the lunch rush at Crossbar in midtown Anchorage and Sous Chef Roy Martinez is grilling steak, plating french fries and trying to make out a confusing order slip. He wonders out loud if “on side add B” means bacon. A server tells him it’s actually code for brown gravy.
Martinez does not get health insurance through work. But his boss, Crossbar owner Ken Ryther would like to change that:
“I would love to offer my employees that benefit.”
Ryther worked at the Bear Tooth Theaterpub & Grill for 12 years, where he had employer sponsored health insurance. He knows health insurance helps retain employees and that in turn improves service and food quality. He also thinks it’s the right thing to do. So when he opened Crossbar a year ago health insurance was on his radar, but he says it just wasn’t feasible:
“There was no way we could afford healthcare in the beginning given start up costs and a new business and managing cash flow.”
Starting next January, Ryther may no longer have a choice. That’s when the Affordable Care Act will require businesses with more than 50 full time employees who work over 30 hours per week to provide insurance. Ryther says he’s close to that threshold right now.
The legislation Senator Murkowski’s proposing would bump the definition of “full time” to 40 hours per week. That would make a big difference for Ryther:
“It would definitely make life easier.”
Murkowski’s office has heard from more than two dozen Alaska businesses who are concerned about the requirement, from restaurants, school districts and plumbers. Murkowski says the full time definition is forcing businesses to cut employee hours to under 30 hours per week to avoid paying the penalty for not providing insurance. She says it doesn’t make sense:
“If you ask most Americans, if you ask most Alaskans, what they consider full time to be, they’ll say 40 hours.”
Some local restaurants already do provide health insurance. Moose’s Tooth Pub and Pizzeria, which owns the Bear Tooth and Broken Tooth Brewing has offered employees health insurance for more than a decade. Brooke VanVeckhoven is the human resources manager for the company, which has about 500 employees in Anchorage. VanVeckhoven says the owners who started Moose’s Tooth in 1996 considered health insurance an important benefit and offered it within a few years of opening. But she understands why other businesses, especially restaurants, struggle to do the same:
“We’ve been contacted by a lot of small local restaurants who would love to offer health insurance to their employees, even before the requirement by the government, and it’s just hard for them to find something that’s affordable that doesn’t eat every bit of their profits.”
That concern for the bottom line is very real for Crossbar owner Ken Ryther. As he considers potentially having to provide health insurance, he is also worrying about the minimum wage increase, which will take effect next month. He says at a certain point, the impact on his business becomes unsustainable:
“Folks are going to be having to pay a whole lot more to go out to eat, which then they’re probably not going to go out to eat, and if people don’t go out to eat you don’t have restaurants if you don’t have restaurants you lose a lot of jobs.”
Ryther would like to see his business grow enough so that he can offer his employees health insurance. But he says he would rather have that be a choice than a government imposed requirement.
This story is part of a reporting partnership between APRN, NPR and Kaiser Health News.
Annie Feidt is the broadcast managing editor at Alaska Public Media. Reach her at afeidt@alaskapublic.org. Read more about Annie here.
