COBRA Act and Frans Fries - Essay Example

This plan draws funding from the employers of the employees registered under the plan where they pay premiums of up to hundred and two percent (Andersen, Rice & Kominski, 2011). Therefore, this health plan serves as a reprieve for employees to continue accessing health care until they find another avenue for paying their premiums if any of the above occurs. However, as much as the plan is the right of the employees, they must make prior notification to make the act work for them (Andersen, Rice & Kominski, 2011).

In this regard, Fran’s Fries is a community-located eatery that serves a greater fraction of the community. In essence, the eating joint’s location is in the central part of town where heavy trading and interaction occurs. Fran’s Fries boasts of matching up to big names like McDonald's and Steers because of the level of service and products on offer. Sequentially, the brains behind this strategically placed are Fran who couples as the joint’s owner and manager. Fran has vast experience in the hospitality industry because of previous work engagements with several five-star hotels. Therefore, the business draws success from passion and remarkable inter-employee relationships. Fran’s Fries has created employment for twenty employees who work in the kitchen and also in the front service.

Before the economic recession of 2008, the business entity was at the top of the fast food market in the region, which necessitated the need for the management to make their employees live with comfort. According to Fran, business took a turn for the worse when the recession occurred as many of the eatery’s consumers lost their jobs and others opted to carry light foods from their homes rather than eat take-outs. Essentially, fast foods led to the popularity of the eating joint where management also incorporated health care plans for their employees and their families. Moreover, the COBRA policy also followed suit to which the manager did not foresee the occurrence of the event. With the recession in sight, Fran had to lay off some workers periodically because the profits realized could not sustain the entire workforce.

In this regard, the challenge of having to pay for the premiums of the laid-off employees faced the business the profit generation was not sufficient for the cause. Therefore, Fran had to battle with ensuring that the business stays afloat and also ensuring that the business complies with the COBRA act. Lucky for the business, they took up a policy that allowed the business to only pay extended premiums for employees for a period not exceeding four months. However, the manager says that this was also strenuous for the business as the laying off occurred in phases rather than in one stride. This made the incurrence of loss a part of the business until the time that the business stopped the process. By the time the recession was over, the business owner says that the business had slashed the workforce by half, which almost brought Fran’s Fries to its knees. However, Fran insists that the employees that lost their work at Fran’s Fries benefitted from the COBRA policy because four months was enough time for them to find other means of maneuvering.

For Fran, the process of ensuring that Fran’s Fries did not crumble was a humbling experience because the business learned how to survive on minimal profits. In addition, Fran maintains that stringent measures may apply for a business to stay afloat where the business interest supersedes friendship. For instance, the loss of livelihood for some employees was a matter that had to occur meaning that Fran had to do the laying off in a subtle manner. Sequentially, Fran advises that it is vital for business owners to calculate the future, but it is equally essential for the business to work on the present if they intend to get there. Therefore, the amount of premium that the business paid off for the laid-off workers of Fran’s Fries was minimal as compared to the amount that they would have spent in paying them with the reduced profits.

In conclusion, the challenges in the economy affect both sides of the divide because when the government incurred economic loss because of the recession the ripple effect also fell on small business entities like Fran’s Fries. Lastly, the COBRA act favored both sides because Fran’s Fries reduced its operating costs by downsizing its workforce while the employees had health insurance for the following four months.