Dennis Costello runs the Hotel Bethlehem in Pennsylvania’s Lehigh Valley, employing 180 workers in the city’s only full-service hotel with restaurants and banquet space.
About half his staff takes advantage of employer-provided insurance.
But because of the federal Affordable Care Act, he says, the hotel will have to determine how to offer the same guest services while facing twice the expense.
“It will certainly require us to take a look at basically everything,” Costello said. “What we charge people, our room rates, the number of associates. We certainly would be very, very careful about filling any vacancies and really running a leaner operation.”
Local competition includes franchise hotels, with smaller staffs, that won’t be subject to provisions of the health care act.
“To now have to pay for everyone’s health care, that is going to put us at a competitive disadvantage,” he said.
Costello is one of the millions of American business owners responding to the now-constitutional implementation of the Affordable Care Act. As providers of insurance to millions of workers, employers like Costello are combing regulation information to learn how they’re affected.
Some say the act will do its job by insuring millions, which includes offering businesses new ways of obtaining insurance. But others say the penalties and associated taxes will drive up costs, hampering the hiring power of independent business owners.
One of the most direct effects on employers are health insurance penalties, which kick in at the start of 2014. The fees could go into the six figures for employers who don’t offer health insurance, or the right type of coverage.