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Posts Tagged ‘Carl Karcher’

George Will's War on Regulations

Fri ,25/05/2012

                     “Good regulations make good citizens.”

 You would not think that if you read George Will’s article “Obamacare: Regulatory state’s war on business”. He tells how Carl Karcher built his hotdog cart business up to Carl’s Jr. Restaurants, now CKE Industries, a multibillion dollar business. However, Mr. Karcher passed on in 2008 and Mr. Will has written an anecdotal story based upon quotes from CEO Andy Puzder.  He claims that “CKE’s health care advisers, citing Obamacare’s complexities, opacities and uncertainties, said it would add between $7.3 million and $35.1 million to the company’s $12 million health care costs in 2010, unless CKE converted many of its full-time employees to part time.“ He felt it would be necessary to do that to avoid providing them with the health insurance required by Obamacare. The article goes on, blaming Obama’s policies for the poor economic climate, the high cost of fuel prices, and for creating “ multitudes of regulators who regard business as the enemy” and are conducting a “regulatory state’s war on business”.

 Although the healthcare bill is called Obamacare, Mr. Will should remember that what we have is not the universal health care that President Obama wanted. It is the half-a-loaf that remained after the compromises necessary to get the bill through Congress and overcome the Senate’s plan to filibuster it. Had universal care been enacted, CKE and other businesses would not be responsible for providing health care for their workers. Mr. Puzder apparently also missed the point that even now Obamacare requires that insurance companies use 80% of the premiums collected to pay for healthcare. In many cases, this will mean lower premiums and rebates to the insured *. The affordable health care act was passed requiring universal coverage, but Congress weakened the restrictions on what insurance companies can charge. The problems CKE has in covering employees with health insurance is more the fault of Congress than of the administration.

There is also an ethical problem that Mr. Will passed over. Most of CKE Industries’ employees work for near minimum wage and are covered by the company’s “mini-med health care program”. If that program does not meet the requirements of Obamacare, is it adequate to cover their needs if they have a serious health problem? Mr. Karcher is not here to speak for what he would do, but Mr. Puzder apparently sees it as a trade-off between job creation and providing adequate health care for his employees. He is apparently willing to convert many employees to part time in order to cut costs on their health care. In 2007, before the company went private, CKE Restaurants, Inc. earned revenues of approximately $1.5 billion. Is it possible that Mr. Puzder is making a trade-off between his employees’ healthcare and the company’s bottom line? Perhaps Mr. Will should look into that issue.

* Note: Under the Affordable Health Care Act, health insurers must pay 80% of the premiums collected for medical expenses or return the difference. Here is a list, by state of the amount expected be refunded under this provision.