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Pay A Penalty? Biz Owners Face Health Care Dilemma

"I would have to say, 'look, guys, you're family to me in many respects, but this family also depends on having the kind of cash flow available to keep the lights on and keep employing most of you,'" Wang says. "It would have to come down to that."

Not providing insurance and paying the penalty is another alternative. "That's what we're going to decide by 2014, if the math is so obvious it's cheaper for us to do the $2,000 per head," she says.

The health care law generally requires that companies with 50 or more full-time workers provide health insurance for their staffers. If they don't provide any insurance, they'll have to pay the $2,000 penalty for each worker on their payroll. If they buy insurance, but it doesn't meet the government's tests for affordable coverage, they'll have to pay $3,000 for each worker whose coverage isn't deemed affordable. If that seems confusing, that's just the beginning. There's a labyrinth of other details that include plans that can be "grandfathered" in and a maze of other fine points that small business owners are trying to decipher.

In some industries, owners are considering cutting employees' hours to under 30 a week, which would take those workers out of the jurisdiction of the law. Restaurant owners are looking at that option after Darden Restaurants Inc. said in October it was going to try changing the mix of full-time and part-time workers at its restaurants including Red Lobster and Olive Garden. When full-timers leave, Darden will considering replacing them with part-timers, spokesman Rich Jeffers says.

Hurricane Grill & Wings, a restaurant franchise with five company-owned restaurants, is also thinking of lowering the number of hours that its servers and other hourly employees work. That would exempt them from having to be covered under the law. President Martin O'Dowd says the company would have to monitor the quality of its service and food to be sure there's no impact on customers if workers are unhappy with their shorter work-week. But he's not anticipating any problems.

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