Randall Tabor, who owns two Quiznos sandwich restaurants in Virginia Beach, Va., once aspired to triple the number of outlets he owns.
But after the federal health-care overhaul passed in 2010, Mr. Tabor says, he shelved those plans. The law requires that employers with 50 or more full-time workers provide health insurance to employees by 2014 or pay a penalty. Mr. Tabor, who employs 36 people at his two Quiznos shops and another restaurant, wants to stay small so he doesn’t trigger the requirement.
Restaurants and retailers face some of the toughest changes now that the Supreme Court has kept the overhaul in place. These industries historically are among the least likely to provide insurance to workers.
Many franchisees of big chains hover around the threshold at which they will be required to start insuring workers or pay the penalty. With high turnover and a large percentage of part-time and seasonal workers, restaurant and retail operators must juggle several variables in figuring out whether they will cross the threshold.