Since many restaurants have a high rate of turnover or seasonal workers, providing employees with healthcare benefits may not be a top priority. Nonetheless, in the competitive restaurant industry, healthcare benefits are an important part of recruiting and retaining the best managers, chefs, and servers.
Many restaurants simply forgo offering health insurance to their employees. This leaves the employees at risk of incurring large medical bills in the case of an accident or expensive medical procedure. In addition, offering healthcare benefits is a great way to offer a compensation package that many other restaurants do not offer.
Some startup or family-owned restaurants may have limited capital, making the cost of traditional group health insurance a significant challenge. In addition, since many employees are part-time or seasonal, the restaurant may not have enough employees to meet the minimum participation requirements.
A more ideal solution is for restaurants who want to offer their key employees health benefits is to send their employees to the individual health insurance market. The restaurant can still help their employees with their individual health insurance costs while remaining within the strict confines of their budget. Here’s why employer-funded individual health insurance is an ideal solution for restaurants.
Why Individual Health Insurance is Ideal for Restaurants
Employer-funded individual health insurance is ideal for restaurants because the solution allows them to offer healthcare benefits for employee recruiting and retention, while still controlling their benefits costs. The solution is affordable, 100 percent paperless, and flexible enough to fit the diverse needs of a busy restaurant. In addition, by utilizing employee classes, the restaurant can set up different healthcare allowances for the different employee roles. This is attractive to restaurants who would like to allocate different allowances to managers, sous-chefs, and chefs. Here are the benefits of individual health insurance and why they fit well with restaurants:
1. Controllable Costs: Being able to set, control, and predict all health benefits costs is revolutionary for many restaurants. Reimbursing employees’ individual health insurance gives restaurants controllable costs by:
Defining their budget by setting any contribution amount to employees’ healthcare
Giving employees access to monthly healthcare allowances
Allocating different allowances to managers, sous chefs, executive chefs, line cooks, and staff
Allowing employees to select their own individual health insurance policies
Reimbursing employees only for eligible health insurance premiums up to the amount in their healthcare allowance
2. More Time for Serving Customers: Many restaurants do not have, have a lot of extra time to focus on administering healthcare benefits. With a credible reimbursement software provider, the reimbursements take less than 5 minutes per month to administer online. Some restaurants consider grossing up salaries for their employees’ health insurance without a formal plan or compliant software. However, remaining in compliance with federal regulations and health reform can be costly, time-consuming, and an administrative hassle.
A credible reimbursement software provider eliminates the time, costs, and administrative hassle of offering health benefits. Restaurants that select a reimbursement software provider can expect to:
Spend less than five minutes per month administering their reimbursement plan
Have access to their reimbursement plan online 24/7
Incorporate reimbursements with their existing payroll system and HR process
3. A Competitive Edge for Hiring: While some restaurants give their key employees a stipend for health insurance, many restaurants do not offer any kind of healthcare benefits. Offering healthcare benefits as part of a compensation package can give restaurants a huge advantage within the industry when competing for sought-after chef, manager, or food and beverage director.
Why Individual Health Insurance Works Well for Restaurant Employees
1. Employee Choice: Individual health insurance offers more choice and control to employees by allowing them to choose a plan that fits their own needs, including coverage level and network. Employees can choose their own plans to work with their budget. These plans can be customized to individual circumstances and age.
For example, if a young employee is relatively healthy and on a tight budget, a plan with a lower premium and higher deductible may be the right choice. On the other hand, for employees with more healthcare needs, a plan with a higher premium and lower deductible may be the better plan.
2. Lower Costs: Individual health insurance costs up to 60% less than group health insurance coverage. Additionally, employees may qualify for premium tax credits, depending upon their income level, household size, and eligibility for other government subsidized programs.