Businesses begin bracing for the Affordable Care Act
(CBS News) NEW YORK CITY - Most parts of Obamacare will take effect next year, but a lot of small businesses are already making plans.
At the Five Guys restaurant in New York City, burgers and fries are the specialties, but owner John Rigos worries he'll have to cook up some cost savings when the affordable care act is fully implemented.
"It'll likely affect the number of people we can hire," Rigos said.
Rigos, who has 10 New York franchises and 250 employees, was waiting until after the election to confront the new health care legislation -- officially called the Affordable Care Act -- which will force him to provide insurance for all his full time workers, or face hefty fines.
"It'll probably have to reduce the staff to some degree, and again, focus on building smaller stronger team rather than being as aggressive in opening up new stores and creating new jobs," Rigos said.
Papa John's CEO: My Obamacare claims were twistedHow the Affordable Care Act affects you
The new legislation will require businesses with 50 or more workers to provide affordable health care for their employees starting in 2014 or pay a penalty of up $2,000 per worker. Businesses with fewer than 50 employees -- that's 96 percent of all companies, will be exempt. They won't have to do anything.
Dr. Ezekiel Emanuel, a health policy advisor to the White House who helped develop the new plan, said the cost to businesses is a "real concern."
"Near term we're going to see some blip in some costs. But I think actually when we rearrange costs and make it more efficient, we're actually going to see costs moderate," Emanuel said.
Some companies will find it cheaper to pay the fine than buy insurance. Twenty-two percent of small companies say they are likely to stop offering health coverage in the next five years.
Five Guys owner Rigos said he's not opposed to everyone having health care, adding: "I absolutely support it. I want to be clear about that, it's a big deal. It's still very challenging. There's 25,000 restaurants within the New York City market we're competing against, so it's not like we have surplus profits that we could just earmark a portion of them to go toward these types of initiatives."
Rigos told CBS News he's already met with his lawyer and accountant to begin putting a plan in place.
