Dunkin’ Donuts Seeks to Limit Employees’ Obamacare Coverage

The Dunkin’ Brands restaurant company, which includes Dunkin’ Donuts and Baskin Robbins, is pushing regulators to narrow the Affordable Care Act‘s definition of a full-time employee. 

Currently, the health reform law considers employees who work 30 hours a week full-time for the purposes of insurance availability. Dunkin’ Brands would have the government use a 40-hour workweek benchmark instead.

Under the ACA, companies that employ more than 50 full-time workers must either offer them health insurance or pay a penalty of $2,000 per employee.

The difference between a 30-hour week and a 40-hour week would mean that companies would not be on the hook for insuring untold thousands of employees. The cost to insure a single worker would average $4,664, or $11,429 for one with a family, according to the Kaiser Family Foundation think tank.

Some employers, especially restaurant chains like Denny’s and Olive Garden, have already indicated that they could limit their workers to 25-hour weeks in order to avoid having to provide insurance.

Dunkin’ Brands hedged their advocacy in a response to questions from a DailyKos writer, saying in a statement, “We believe that the definition of a full-time employee, and the number of hours a full-time employee works each week, should be consistent with existing Federal and State laws, and we have communicated this to the Administration. We do not advocate any change to this definition for the purpose of reducing the number of employees eligible for insurance.”

Benefit-Free Business Model

Typically the federal government has stayed out of defining full time workers. The Fair Labor Standards Act doesn’t define the difference between full and part-time employment, leaving it up to the employer and noting that the law is applied regardless. The only place the FLSA does intervene in regard to hours is to mandate overtime pay for people who work more than 40 hours per week.

John. P. Hancock Jr.

“There was no real definition because it didn’t make any difference,” says John P. Hancock Jr., a labor and employment attorney with the firm Butzel Long. “Each employer set up his or her standard as to what was going to qualify you for health care.”

Before the ACA, the government didn’t mandate that employers provide any health care so they had no reason to define a full-time work week. “The only place it mattered was when you were obligated under a collective bargaining agreement,” Hancock says. “They would define anyone who averaged more than 30 to 32 hours per week would get full time benefits.”

With the drastic decline of private-sector unions in the past few decades and the ascendency of large non-union employers like Walmart, the landscape has changed as companies began requiring longer work weeks before benefits would kick in. “A lot of companies have gone to modified schedules,” says Hancock. “You’ve got a whole group of employers out there who have maintained businesses based on paying employees less than 40 hours a week without benefits.”

After the economic downturn in 2008, many consumers were left with no-benefit retail jobs as their only means for providing for their family. For those who didn’t qualify for Medicaid, insurance could be a pipe dream, because they couldn’t get it from their employer and couldn’t afford it on their own.

Now the ACA is set to bring a measure of relief — but the companies whose business models are based on not paying benefits could see a crunch. “For a lot of companies, like fast food, grocery stores, retail,” the attorney says, “it will be a tremendous burden, at least from their way of thinking about it.”