Health care quarterly:
Restaurant association touts health care insurance package
Fri, May 21, 2010 (3 a.m.)
Like most business organizations, the Nevada Restaurant Association has been diligent in finding programs to help its members during tough economic times.
One of its most successful ways has been the implementation of a health care benefits package.
“It’s really challenging for restaurateurs to be profitable and provide health insurance for their employees, especially with the current economic challenges and the new health care reform bill,” said Heather Pressley, the association’s director of marketing and administration. “This program is extremely cost-effective.
“So many restaurateurs are working on a small profit margin and are very labor intensive,” she said. “Running a business could be a catastrophe without the right coverage for their employees.”
This is where the association, which took root in 1982, stepped in a year ago and set up a benefits program for its members, including a “qualified plan” option that allows employers to use the minimum-wage insurance differential that can save members $1 an hour on each minimum-wage employee working at least 20 hours a week.
In Nevada, the minimum wage is $7.55 an hour, but employers can pay $7.25 an hour if they offer health insurance. That’s because the federal minimum wage stands at $7.25, and states are required to pay the higher amount. So that’s only a savings of 30 cents per hour, per employee when insurance is offered.
But that’s all changing in a couple of months.
Beginning July 1, the state’s minimum wage will increase 70 cents to $8.25 an hour. Employers that provide insurance could pay $7.25 an hour — a realized savings of $1.
In an industry where many of the servers are minimum-wage employees who rely mostly on tips for income, the health insurance is an important issue for both restaurant employees and restaurants.
The association uses Bridgeport Benefits as its partner, and Pressley said it has received very positive feedback.
“Working with restaurants is very difficult for a broker,” she said. “It’s just not your typical 9-to-5 business. Our broker has been very flexible with our restaurateurs. It’s been great for all involved.”
Options include limited and major medical, dental, vision, life, short-term and long-term disability, critical illness and health savings accounts. The plan benefits restaurateurs in that there are no minimum number of employees to qualify, no cost to the association member to join and no participation requirements.
“As servers, most of the restaurant employees weren’t used to getting health insurance benefits,” Pressley said. “This plan has been a win-win situation for everyone.”
Restaurateurs must be members of the association to offer the plan to employees. However, there are no additional stipulations such as a requirement on the number of employees who participate. Basic plans cost the employer as little as $16 per employee, per week, Pressley said.
“I just recently talked with one restaurant owner who is using our health care plan, and he said the savings to him is more than $100,000 in wages annually,” Pressley said. “He is just one of many in that situation.”
“The cost savings really depends on the coverage, and honestly, things get really complicated very quickly,” she said. “Health care is definitely a huge expense and without the right plan, can be catastrophic. With that said, finding the right plan is the key to helping your bottom line. That’s why we are working so hard with our members to find the right solutions.”
Pressley said the association is putting together figures to find out what percentage of restaurants offer health care coverage and how many restaurant employees are covered.
According to the National Restaurant Association, restaurants employ about 13 million people nationally — second only to the health care industry in providing jobs. The association says about one third of that workforce — 4 million to 5 million workers — is without health insurance.
“We expect that we have similar stats here in Nevada, from a percentage standpoint,” Pressley said.
The recently passed health reform law will also directly affect small businesses, such as many restaurants in Southern Nevada.
Starting in 2014, businesses with more than 50 employees will be required to either offer health care coverage or pay a penalty of up to $2,000 per full-time worker. That coverage will also have to meet certain minimum benefits — covering specific services as well as a majority of an employee’s total health costs — or face additional fines.
Additionally, part-time employees would be counted toward the 50-employee minimum on a pro-rated basis. That would bring more small businesses into the group mandated to provide health coverage to its workers.
“This health insurance plan will ultimately be a big benefit to all of our members,” Pressley said. “We will continue to make sure that our plan follows all of the guidelines mandated on the state and federal levels. There is still a lot more to be worked out on deciding what those mandates are going to be by 2014, but we are on top of that.”
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