Instead it will be forced to "plow more money into employees' benefits," Jerdonek says. "Insurance companies have additional requirements put on them. The costs are passed onto the consumer and in this case the consumer is the small-business owner. That's the pressure it puts on me. That money has to come from somewhere. The price elasticity for our clients isn't very stretchy."
Jerdonek says offering excellent health coverage and benefits is a major factor in retaining employees, so it's not something to be toyed with. "We are in a highly competitive [industry]," he says. "We have to attract and retain really smart people and in order to have the really smart people we have to do more than other firms are willing to do. And one of the things we do is we pay a substantial amount of our employees' health- care premium."
CEO Larry Meigs said the message the in-home senior care franchise is sending to franchisees is encouragement to grow instead of trying to avert the law.
"We're working hard to encourage to all of our franchisees to grow their way out of this as opposed to pulling back," Meigs says. "If you pull back to have only part-timers you're really going to be limited to provide your services. In our case the employees are the service themselves."
The in-home senior care franchise has roughly 450 offices that employee about 50,000 caregivers. Meigs says about 40% of his franchisees would meet the employer mandate.
That said, the company has pulled back on education and planning suggestions for its franchisees.
"Now what we tell them today might be outdated six months from now," Meigs says. "Even at our conference in Baltimore two weeks ago, we had three different attorneys give workshops [on health care reform] and every one of them qualified their remarks. We have similar workshops scheduled for the remainder of the year -- we're retooling the events to be more generic. We don't want to be handing out a lot of information that's going to become prehistoric six months from now."
-- Written by Laurie Kulikowski in New York.
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