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Nearly Two-Thirds Of Employers Expect Health Benefit Costs To Rise Under Obamacare, Survey Finds

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Papa John's CEO John Schnatter said earlier this month that the costs stemming from the Affordable Care Act will lead to an increase in the price of pizza for consumers.
Papa John's CEO John Schnatter said earlier this month that the costs stemming from the Affordable Care Act will lead to an increase in the price of pizza for consumers.

Not only could workplace pizza parties cost up to 14 cents more per pie thanks to Obamacare, but a majority of employers also expect to pay more for employee health benefits because of health care reform.

Sixty-one percent of employers say they will have to pay more for health benefits when key provisions of the Affordable Care Act take effect in 2014, according to a new survey of 1,203 employers by the consulting firm Mercer. One in five expect employee health benefit costs to rise by at least 5 percent. The survey included some small employers -- 38 of the employers in the study have fewer than 50 employees -- who will see fewer effects of the law. (Hat tip: the Los Angeles Times.)

Health care reform will likely cost the most for companies that pay their employees little and have a large part-time workforce, the survey found. That is because the Affordable Care Act requires large employers to provide health care coverage to all employees working at least 30 hours per week or else face penalties. About one in four employers -- and one in two employers in retail and hospitality -- said in the Mercer survey that they will have to take action to avoid penalties.

Only 6 percent of employers, including 9 percent of retail and hospitality companies, said they will likely drop their health benefit plans because of the Affordable Care Act.

The study comes after Papa John's Pizza founder and CEO John Schnatter said earlier this month that he plans to raise the price of each pizza by $0.11 to $0.14 to offset new costs under Obamacare. The National Restaurant Association previously asserted health care reform might hurt restaurants' slim profit margins, since it requires employers with more than 50 employees to provide affordable health insurance.

The Mercer study did not indicate whether they, like Schnatter, plan to pass on the higher cost of employee health care to consumers.

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