When the Affordable Care Act passed, the hospitality industry was directly affected. All of a sudden, many restaurant owners had to offer health insurance to full-time employees for the first time. But unlike some other industries, determining which restaurant staffers are eligible for health insurance is tough. Many jobs in restaurants are filled by hourly employees with schedules that fluctuate week to week – and staff fluctuates, too. The service industry experiences a high turnover rate that further complicates matters. Determining which employees you’re required to offer insurance to isn’t the only hurdle. Due to the wide variety of employees—from the high school busboy who works only on weekends to the full-time veteran server providing for a family of four—having a one-size-fits-all plan doesn’t make a lot of sense. That’s where an employer private exchange can help. It gives restaurant owners and managers the ability to offer a collection of plans to their staff so that each can pick the plan that best suits his or her needs. Think of it as an online benefits store. You provide an allowance, and your employees go shopping for their benefits. If you’re an employer in the restaurant industry, your first step is to determine whether or not you are an “Applicable Large Employer,” which means someone with 50 or more full-time employees (they have to work 30 or more hours a week on average to count as full-time). If you have less than 50- full time employees, you might be eligible for small business health care tax credit. Next, determine what type of coverage you are going to offer and if you’re going to offer your staff a “defined contribution,” which is a fixed amount you’re willing to pay towards their plan (i.e. the allowance). When you decide to do a defined contribution, employees can see exactly how much the employer is paying, which demonstrates the cost of providing health insurance. Employees are able to enroll themselves online, receive assistance in comparing different plans and select the one they want. While some employees may opt for a plan with a low premium, other employees may be willing to pay more for a plan with better coverage. It’s really their choice. Private exchanges aren’t limited to medical insurance. There are exchanges, such as Blue Cross Blue Shield of Michigan’s, that offer specialty and ancillary products as well, such as life, dental and vision insurance. As the employer, you determine whether or not you will subsidize some of these products or make them voluntary. The possibilities are endless in private exchanges, and as they continue to emerge in the next several years, taking the appropriate steps to help your restaurant now will lead to continued growth and a healthy, happy workforce. For more information on private exchanges click here and make sure to check out these other posts:
- Five Things to Consider When Selecting a Private Exchange
- Enrollment in Private Exchanges Can Increase Employee Enrollments in HSAs
- Private Exchanges Accelerating Consumer-Directed Health Plan Adoption
Photo credit: Andrew Stawarz About the Author
Jason Hover is vice president of Private Exchange for Blue Cross Blue Shield of Michigan. He’s responsible for driving the company’s strategy and solutions in the private exchange market, which includes developing the company’s proprietary GlidePath℠ private health insurance exchanges. Hover also leads strategy development for the Blue Cross Commercial Business division. Hover joined Blue Cross in 2009 and previously served as director of Commercial Business Strategy and director of Strategy and Planning.