With ACA, McDonald’s could face $420M costs

The Affordable Care Act (ACA) could cost the fast food giant and its franchisees more than $400 million a year in additional health care costs — time to start worrying?

Unfortunately, there’s no clear-cut answer but, unless your company’s the size of Mickey D’s, $420 million is probably an unrealistic figure to anticipate.

But for McDonald’s CFO Peter Bensen, that figure is very real. According to the Wall Street Journal, Bensen announced during a conference call that McDonald’s is estimating that each restaurant will face $10,000 to $30,000 in added annual costs.

With 14,000 restaurants in the U.S., the total cost to the company and franchisees will total $140 million to $420 million.

A number of variables

Bensen said the broad range is due to variables including:

• the number of employees per restaurant
• the number of full-time employees per restaurant
• the percentage of employees that accept health insurance, and
• changes to McDonald’s healthcare plan.

To put things in perspective, Bensen said the commodity-costs increases it experienced in 2011, for example, added more than $30,000 in overhead to each restaurant that year.

“While this is a significant item, and it’s gaining a lot of attention, as a [profit and loss] item we have managed through items of this magnitude in the past and I’m hopeful we can do that in the future,” Bensen said.

What to consider now

If you’re still sitting back and waiting for the right time to hunker down and prepare for the changes from the ACA, now’s the time to start looking at your numbers and get at least a rough idea of what to expect.

Number of employees, full-time employees and employees already enrolled in your company’s health insurance are all numbers worth paying attention to when projecting additional costs with the ACA.

What steps have you taken to prepare for the ACA? What are the most important figures to look at when calculating and projecting new costs? Let us know in the comments.