National Restaurant Association Member Testifies Before Congress on ACA Implementation Challenges for Restaurants and Small Businesses

Published on : Thursday, December 5, 2013

National-Restaurant-Association-logo-300x125 (1)Testifying before Congress on behalf of the National Restaurant Association, Texas restaurateur Ellis Winstanley explained the challenges of the aggregation rules under the Affordable Care Act and called on Congress to remove the unnecessary burdens placed on small businesses.

Winstanley, CEO of Tradelogic Corporation, an Austin, TX based company specializing in acquisitions and operations of hospitality, construction, software, printing & promotion and apparel businesses, testified today before the U.S. House of Representatives Small Business Committee hearing entitled, “The Health Care Law: The Effect of the Business Aggregation Rules on Small Employers.” The hearing was called to examine the process of determining whether businesses are considered single or multiple employers under the health care law. Winstanley is currently the owner of eight restaurants and several other businesses throughout Texas and Arizona.

“The health care law presents compliance challenges for restaurant and food service operators due to the unique characteristics of our industry’s workforce,” Winstanley told the committee during his oral testimony. “It is difficult for many restaurants, especially small businesses, to determine how the law impacts them and what they must do to comply.”

Winstanley highlighted the complexities restaurants face when dealing with Employer Aggregation Rules, the process used to determine what is considered a large versus small employer under the law. The rules, part of the US Treasury Department’s Tax Code, are the first time many restaurateurs, especially smaller operators, have needed to understand how these complicated regulations apply to their businesses. Navigating these complex rules has come at a cost to restaurant and foodservice operators across the country.

“The employer aggregation rules present a challenge,” said Winstanley. “It may seem like a simple thing to do, but due to the aggregation rules and the structure of many restaurant companies, determining the employer is more complicated than many expect. The application of these aggregation rules is having an impact on small businesses. Employers face the cost of consulting a tax professional to protect themselves against penalty and take on the burden of compliance as an applicable large employer.”

Winstanley highlighted the fact that restaurants and small businesses like his across the country are struggling to understand how complicated aggregation rules apply to their business model, explaining that the impact of being an applicable large employer will increase the cost of business.

“The impact of the aggregation rules, and hence our status as an applicable large employer subject to the Employer Shared Responsibility and Reporting of Employer Health Insurance Coverage provisions, among others is that quite simply, the cost of doing business for each small business we own will go up,” said Winstanley. “Labor costs are typically one-third of a restaurant’s expenses. We only have a finite dollar amount to spend on labor costs given our thin margins, including employee benefits such as health insurance coverage.”

Winstanley closed his testimony stating his concerns regarding cost of coverage and the increased administrative burdens he and his fellow restaurateurs will face, but renewed the restaurant industry’s commitment to working with Congress on finding solutions for the small business community.

Read Winstanley’s full testimony here

As part of its ongoing efforts to educate members, the National Restaurant Association has launched an online Health Care Knowledge Center and a comprehensive Health Care Law Toolkit.

Source:- National Restaurant Association

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