Phillips Calls Health Care A “Moral Right” Despite Not Offering It To His Own Employees

Phillips said his upscale coffee shop, Penny's Coffee, could not afford to pay a $15 minimum wage and cover health insurance.

Photo courtesy Dean Phillips for Congress

Congressional hopeful Dean Phillips has come under fire for declaring health care to be a “moral right” while delaying providing health care coverage to his own employees.

Phillips, a Democrat hoping to unseat Rep. Erik Paulsen, has made health care a focus of his campaign. Now Republicans are calling out Phillips for changing his tune for political expediency. A new ad released Wednesday slams Phillips for engaging in the “worst kind of hypocrisy.”

Phillips owns Penny’s Coffee, an upscale coffee shop with multiple locations in Minneapolis. The first Penny’s Coffee opened in late-2016 and another location soon followed in 2017.

For the first year Penny’s Coffee was in business, the company did not offer health care coverage to its employees. At the time, Phillips said his business could not afford to pay a $15 minimum wage and cover health insurance.

In an interview with Forbes in June 2017, just before opening the second location of Penny’s Coffee, Phillips admitted to not providing health care coverage, saying they were “just a single coffee shop with a handful of employees” and would reassess the need in the future.

In the same interview, Phillips claimed that “health care should be a moral right.” When asked why Penny’s Coffee did not use the credits for small businesses made available in the Affordable Care Act, Phillips admitted the provision did not do enough to make health insurance affordable for the business.

“Businesses have to make choices with limited capital,” Phillips told Forbes. “We are finally profitable, but ever so slightly and we can’t do it all. And we thought it would best reward employees to pay a very, very handsome wage — $15 an hour plus tips, so most people are making close to $20 an hour. If we were to provide health coverage, of course, that would necessitate a reduction in wages. So it’s essentially providing some choice to our employees to make decisions based on their needs.”

Phillips doubled down on his belief that health care is a “right” in an interview with the Star Tribune in August 2017. At the time, Phillips was in the process of opening a second Penny’s Coffee location in Minneapolis. Despite his strong beliefs on health care, Phillips told the Star Tribune offering health care coverage to his employees would cause him to lose money.

A year later, as the election cycle heats up, the issue has reemerged, causing Phillips to try to backtrack on his comments. Last month, a year after the second location of Penny’s Coffee opened, Phillips claimed it was a “mistruth” that Penny’s Coffee did not offer health care coverage to its employees. Phillips said his comments on health care coverage were when the business was just himself and his two partners, and they each already had health insurance. 

“Once we had full-time employees, we created a plan, that’s a very thoughtful one, and we do have insurance for full-time employees,” Phillips said during an interview last month with WCCO.

Phillips did not say when the new health coverage policy was put in place.

Full-time employees at Penny’s Coffee are now offered health care coverage that pays 50 percent of the premium, according to a statement from Phillips campaign obtained by the Star Tribune. It is unclear whether part-time employees of Penny’s Coffee would eventually be offered health care coverage.

Phillips said the Republican ad misrepresents the truth, despite previously admitting to making the decision to initially forgo health care coverage.

Watch the Republican ad below:

Christine Bauman
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