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Papa John's CEO Says Health Care Reform Law Will Increase Price of Pizza

In its most recent annual report, Papa John's International Inc. warned of higher costs due to the health care reform law.

August 9, 2012
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Expect to pay more for pizza orders in 2014 when key provisions of the health care reform law go into effect, says Papa John's International Inc. CEO John Schnatter.

"Our best estimate is that 'Obamacare' will cost 11 to 14 cents per pizza," Schnatter said at a shareholders' meeting last week. "Obamacare" is a term often used when referring to the Patient Protection and Affordable Care Act of 2010.

Schnatter said during a conference call that the company's strategy would be to pass the added cost onto consumers to protect the best interests of its shareholders.

In its most recent annual report, the Louisville, Kentucky-based pizza delivery and carryout giant, also warned of higher costs due to the health care reform law.

The law "could negatively impact our domestic system in future years as our company-owned and franchised restaurants may have to provide health care coverage that was not previously offered to certain part-time employees," Papa John's reported.

Under the law, employers will be liable for a $2,000 per employee penalty if just one full-time employee—an individual working at least 30 hours a week—is not offered qualified coverage, effective in 2014.

Papa John's is not the only employer whose costs will go up in 2014 due to the health care reform law. This week, a survey by Mercer L.L.C. reported that 46 percent of employers in the hospitality industry expect their health care plan costs to rise by at least 3 percent in 2014.

Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.

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