By Janean Chun
While some business owners threaten to cut workers’ hours to avoid paying for their health care, a West Palm Beach, Fla., restaurant owner is going even further. John Metz said he will add a 5 percent surcharge to customers’ bills to offset what he said are the increased costs of Obamacare, along with reducing his employees’ hours.
“If I leave the prices the same, but say on the menu that there is a 5 percent surcharge for Obamacare, customers have two choices. They can either pay it and tip 15 or 20 percent, or if they really feel so inclined, they can reduce the amount of tip they give to the server, who is the primary beneficiary of Obamacare,” Metz told The Huffington Post. “Although it may sound terrible that I’m doing this, it’s the only alternative. I’ve got to pass the cost on to the consumer.”
Metz is the franchisor of Hurricane Grill & Wings, which has 48 locations, five of which are corporate owned, and president and owner of RREMC Restaurants, which runs approximately 40 Denny’s and several Dairy Queen locations. He planned to use the 5 percent surcharge tactic in all his restaurants starting in January 2014, when Obamacare is fully implemented.
As the first anti-Obamacare executive to bring up the surcharge option, Metz is “going out on a limb,” Paul Fronstin, director of the health research program at the Employee Benefit Research Institute in Washington, told The Huffington Post. Still, surcharges have precedent. Fronstin pointed out that the airline industry charges fliers a 9/11 security fee.
Still, consumers have many more restaurant options than airline choices, and Fronstin speculated that Metz’s move is more about politics than prices. Fronstin said that Metz and business owners, like coal company owner Robert Murray, who are blaming their extreme actions on Obamacare or on President Barack Obama himself may in fact be motivated by their own troubled business finances or political leanings.
“When you’re blaming it on one thing and it’s due to something else, you’re basically making a political statement,” Fronstin said. “And if you do something for political reasons, it can backfire, because someone else has the opportunity to come in and take the business away.”