Offering health benefits to your employees can help retain restaurant workers and boost loyalty. However, health insurance is not required if you run a small business with less than 50 full-time employees. Applicable large employers with 50 or more full-time employees must provide health insurance and follow the Affordable Care Act (ACA) guidelines or will otherwise face fines.
Mira offers an affordable health coverage solution for individuals, families, and workers. For as little as $25 per month, small business employers can now offer their workers healthcare that meets their budget. Members have access to urgent care, virtual care, as well as highly discounted prescriptions and lab testing.
Best Health Benefits for Restaurant Employees
If a restaurant has fewer than 50 full-time employees, it is not required to offer health insurance to employees. However, offering health benefits can help reduce employee turnover in an industry where a restaurant’s employee tenure averages 26 days. Only 31 percent of restaurants offer their workers health insurance, making restaurant employees one of the most uninsured groups of workers.
The restaurant industry still has some of the highest rates of underinsured and uninsured workers, resulting in financial insecurity and causing high-quality workers to frequently leave the industry for greater stability in their paycheck and benefits. Some options to provide health benefits to restaurant employees include the following:
- Restaurant Association Plan: Best for RHA Members
- SHOP Coverage: Best for Comprehensive Coverage
- Health Reimbursement Arrangements (HRAs): Best for Flexibility
- Subscriptions and Stipends: Best for Promoting Mental Health and Wellness
- Care Membership Plans: Best for Affordability
Restaurant Association Plan: Best for RHA Members
The Restaurant and Hospitality Association Benefit Trust is a health care solution for hospitality groups with 6-50 eligible employees. The trust is insured by UnitedHealthcare, but is not available in all states, and is only offered to members of the National Restaurant Association. Some of the features included in the RHA Benefit Trust:
- Over 40 different health plan designs
- Simplified administration
- Access to wellness programs and services
- Management carve out available
SHOP: Best for Comprehensive Coverage
The Small Business Health Options Program (SHOP) allows small employers to provide health and dental insurance to their employees. Qualifying small businesses that participate in the program may be eligible for the Small Business Healthcare Tax Credit, which covers up to 50 percent of the cost of providing insurance under the following conditions:
- Fewer than 25 full-time employees
- Employees earn on average less than about $55,000 annually
- The employer pays more than 50 percent of the premium
- The plan is offered to all full-time employees
- The policy is bought through the Small Business Health Options Program (SHOP). Use the Small Business Health Care Tax Credit Estimator to see if you qualify.
Health Reimbursement Arrangements: Best for Flexibility
Health reimbursement arrangements (HRAs) are flexible alternatives to health benefits. HRAs give employers greater ability to control costs and provide employees with more options. HRAs are arrangements and not accounts where employers help their employees pay for medical expenses. Some benefits of HRAs include:
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- Transfers employer responsibility for health risks
- More personalized plan choices for employees
- More straightforward and flexible plan design options
- Greater budget control
- No participation concerns
Different types of health reimbursement arrangements may be available, depending on the size of your business and the kind of arrangement you offer. A few examples include a QSEHRA and ICHRA, described below.
A Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) is for small employers who don't offer group health coverage to their employees. QSEHRA helps employees pay for medical expenses. If an employer offers a QSEHRA, it can be used to help pay for the health care costs of an employee’s family, such as premiums, for qualifying health coverage.
In 2021, the QSEHRA contribution limits were $5,300 for single employees and $10,700 for families. Employers can design QSEHRA reimbursements to vary based on age, family size, and status, but participants must have insurance that meets Minimum Essential Coverage (MEC) to participate.
An individual coverage health reimbursement arrangement (ICHRA) is a new type of health reimbursement arrangement as of 2020. Employers of any size can reimburse employees for some or all of their health insurance premiums. With an ICHRA, there is no maximum contribution, but participants must have individual insurance or Medicare to participate. Participation is at the employer’s discretion based on employee classes and can be designed to reimburse at different rates for different classes. ICHRA funds also roll over year to year.
Subscription and Stipends: Best for Promoting Mental Health and Wellness
Offering a paid subscription or membership to mental health and wellness apps or fitness centers can help show your employees that you care about their well-being. One study reported that service workers who rely on tips are at greater risk for depression, sleep problems, and stress than those in non-tipped, salaried industries. In addition, according to a 2015 study, the foodservice and hospitality industry has some of the highest substance abuse and alcohol use rates of all industries.
If health insurance or HRAs are too expensive, offering assistance to employees to help manage work demands can still show you are attentive to your employees’ needs. Some applications even exist specifically tailored to substance use and addiction. A few examples of mental health and wellness applications include:
Care Membership Plan: Best for Affordability
A care membership plan such as Mira offers an affordable health coverage option for any type of business. Employers can provide their workers access to urgent care, primary care, behavioral health services, and discounted gym memberships with Mira. The employer pays the monthly subscription fee, while the member is responsible for the cost of their copay at the time of service. The price ranges between $25 to $60 per month depending on plan duration - either a quarterly, biannual, or annual plan.
Care is available in nearly every state, and no eligibility requirements apply. Set up is quick, and employees can receive access to care the same day they sign up. Mira is the best overall for offering low-cost solutions to the employee without paying thousands of dollars on premiums and deductibles.
Health Benefits for Restaurant Owners Frequently Asked Questions (FAQs)
When evaluating health benefits for your business, consider the following questions to help narrow your scope.
Is there an open enrollment period for restaurants?
Enrollment will depend on the benefit option. With SHOP coverage, there is no open enrollment period. An employer can start offering SHOP coverage to employees at any time of the year. With an HRA, there is also no open enrollment period. You can set up an individual coverage HRA at any time. An employer will need to provide a written notice to new employees as soon as they're eligible to participate and to current employees 90 days before the beginning of each plan year. There is also no open enrollment period with a plan like Mira or a subscription to other wellness applications.
Can business owners offer health insurance to part-time workers?
Yes! Some companies already offer health insurance to part-time workers, but it is not very common. There are no legal requirements to provide part-time workers health insurance, but offering health benefits to part-time workers can boost retention and loyalty by investing in workers’ health.
How much does it cost for employer-sponsored health insurance?
The cost of employer-sponsored health insurance varies depending on numerous factors and increases each year. In 2021, annual premiums rose 4 percent from last year to $22,221 for employer-sponsored coverage. Of those premiums, covered workers contributed 17 percent of the cost for single coverage and 28 percent for family coverage, amounting to an average of $5,969 for their annual premiums. Deductibles for single coverage averaged $1,669.
Offering health benefits to workers as restaurant owners can help boost employee retention and reduce turnover. Restaurant workers are more likely to be uninsured than other workforce industries, and only a few restaurants offer health benefits. Providing access to healthcare can help show your employees you care about their well-being, boost their loyalty, and make your business more competitive over other establishments. If you have a tight budget, consider affordable alternatives to the health insurance listed above.