Community - GolfBusiness

“I don’t think there will be much of an impact directly on our
business or the industry in general, but, unfortunately, you just
don’t know what you don’t know,” laments Glen Byrnes, manager
of Golden Horseshoe Golf Club in Colonial Williamsburg,
Virginia. “I have to say that it will not affect our business or that
of most golf operations in a direct sense because there aren’t
many golf operations that employ more than 50 people. And
those that do already have attractive benefits packages that include
health insurance to attract and retain the best people.”
Byrnes’ last point is debatable, particularly given the
number of single-asset owners in the industry, but there’s
no denying that resorts and management companies will
face some major challenges under the new law. Many, if not
most, of these types of operations employ large restaurant
staffs, an area of the business where tips supplement an otherwise
low hourly wage and health insurance coverage is rare.
If an employer were near the 50-employee number, he or she
would likely be forced to shift those jobs from full-time to
part-time and cut everyone’s hours below 30 to help reduce
the financial burden the mandate promises to deliver.
Employers in other industries are already preparing for
just that kind of restructuring. Orlando-based Darden Restaurants,
owner of Red Lobster, Olive Garden and Longhorn
Steakhouse, has stopped offering full-time schedules to
hourly workers in select markets as an experiment prior to
the law’s full implementation. In an email statement, Darden
said the full-time-to-part-time test is “just one of the many
things we are evaluating to help us address the cost implications
healthcare reform will have on our business. There are
still many unanswered questions regarding the healthcare
regulations, and we simply do not have enough information
to make any decisions at this time.”
The food industry isn’t alone in its concerns.
According to a survey conducted by the Midwest
Business Group on Health, a nonprofit coalition
dealing with healthcare, the average business owner
expects costs to increase upwards of 5 percent
immediately, and as much as 10 percent to 15 percent
over the next five years.
“So many parts of the rules, regulations and provisions
have not been defined,” says Larry Boress,
president and CEO of Midwest Business Group on
Health. “For example, by next March (2013), employers
have to communicate to their employees
how they can buy [insurance] through exchanges,
and there are no exchanges yet. It’s a difficult situation
especially for small businesses, when anything
that adds to your costs may jeopardize survival.”
That fear has a trickle-down effect, as evidenced
by the universal concern among golf course operators
for the businesses of their customers.
“We’re in a perilous time,” says Butch Byrd, manager at Ballentrae
Golf Club in Pelham, Alabama. “While I don’t think
we’ll see the healthcare law affect our business on the cost side
of the ledger, at least not in the short term, I do think we’ll see
an immediate impact on the revenue side. That’s because small
business people are worried. And when they’re worried, they
aren’t spending money, especially on things like golf.”
Lawren Just, owner of Persimmon Ridge Golf Club in
Louisville, Kentucky, agrees, and she cites the example of one
member who just happens to own several fast-food franchise
outlets to underscore her point. “They’re already looking at
splitting the stores into separate companies and having their
employees work 20 hours at one store and 20 hours at another,
just so they can get around the fines and penalties and keep
their costs down,” she notes.
Ultimately, it’s the continued uncertainty that has many
owners stuck in something of a holding pattern, and one reason
many people aren’t particularly bullish on the future. “I travel
throughout our section, and I can’t tell you how many people
are telling me how concerned they are about the survival of
their businesses,” Byrd says. “That’s not a good thing to hear
when you’re in a business that relies on disposable income.
“Any time you take money out of the hands of the consumer,
whether it’s costs going up or wages going down,
the recreation and leisure industry gets hit first,” he adds.
“It’s unfortunate, and thankfully we have positioned ourselves
well to handle it. But I think it is a concern throughout
our industry.”
Steve Eubanks is an Atlanta-based freelance writer and former golf course owner.
The Rules
THE AFFORDABLE CARE ACT, COMMONLY KNOWN AS OBAMACARE,
dictates that employers with 50 or more full-time workers must provide
health insurance for all workers. Employers must pay at least 65 percent of
the cost of a family policy or 85 percent of the cost of an individual policy.
Those who refuse to do so must pay a penalty of $2,000 per full-time
worker, minus the first 30 employees.
But even those companies that already have insurance plans are not
immune from cost increases because the law also states that the insurance
provided must meet the federal government’s requirements in terms
of benefits. These benefits are a moving target, but include things some
employers find morally objectionable like contraception and the so-called
“morning after” pill.
Hobby Lobby recently lost a suit claiming that the owners’ religious beliefs
were being infringed by such mandates. Moral objections aside, many
businesses that offer insurance today will have to change to new, more
expensive plans tomorrow in order to comply with the myriad new regulations
as they are revealed. —S.E.