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Health Insurance Costs for Restaurateurs

  • Antonio Evans
  • September 6, 2011

A restaurant business, big or small has to deal with internal issues such as benefits for its employees. Getting a group health insurance is something that a restaurant owner should consider. After all if your staff is healthy, then your business follows.

As an employee myself, I am willing to participate in a group health insurance plan which I know will provide me with the protection I need. I know that not many employees enjoy this health benefit as part of the compensation package, but I couldn’t also be one-sided and not have to think about my employer. Are all health benefits the same? How about the level of coverage, does it affect the premium? How much do I contribute if I participate in a group insurance plan? And the cost, is it affordable? I’ll get to the bottomline of this blog, the health insurance costs for restaurateurs who happen to be employers, themselves.

Keeping the cost of providing health insurance to employees low can be done by looking at several options for a group health insurance plan. Take the level of coverage, for example. Each employee has different needs such as dental coverage or maternity. The basis for the coverage level can be based on the needs. This can scale back the cost of the insurance plan.

Here’s how you can look at the costs of health insurance so you can provide affordable and efficient health coverage.

The costs of health insurance benefits vary based on different factors:

  • State where the restaurant business is located. Different states and companies provide an agreement policy as to how much the health insurance costs and the premium payment scheme.
  • The status of the employee can determine if the employee is qualified or not. The employment status of an employee determines the compensation package, including health benefits and the type of coverage the employee can qualify.
  • Salary or payment of the employee (this follows factor #2). All employees, whether fulltime or part-time, get equal rights when it comes to paying for their health insurance. For example, 1% of the employee’s monthly income will be deducted for their health insurance premium. The rest will be shouldered by the employer. The lesser the salary is, the lower the deduction is.
  • The division of the payment is also dependent upon the agreement between the employer and the employee. There are restaurant owners who offer a 60/40 (60% of the cost will be paid by the employer and 40% will be paid by the employee). Others make an equal split of 50/50 for the premium payment contribution. If your restaurant allows tipping, then that can be an option to pay for health insurance premium.
  • Affiliation of the restaurant can also determine the type of health coverage that will be provided and how much each insurance costs. There are restaurant owner groups and organizations that offer more affordable health insurance benefits for restaurant employees.

Health Insurance Costs for RestaurateursSome facts and statistics about restaurant health insurance for employees:

  • With over 10 million people working in restaurants, 88% are not given sick leaves with pay and a scary 63% of these employees actually work despite being sick.
  • 90% of restaurant employees are not given health insurances or benefits for them to make use of.
  • In the US most tips are un-reported. I’m not sure 100% of the numbers, but waiters in say NJ make $3 per hour, low to average monthly rent is about $1,000. If they work full time they only make $400 per month. They make most of their actual wages from tips. Taking this from tips would not be accepted in the US.
  • The average cost for restaurant employee health insurance annually may vary depending on health insurance policies for restaurant employees in your area. In New York, the single coverage for an employee averages $5,418 annually or $451.50/month and for San Francisco, it averages $5,472 annually or $456/month.

Note: This is the cost for fulltime workers (not working below 30 hours per week), and the number would also be different in cases of part-time employees.)

It’s not only alarming for the workers, but also for customers as well. How can you assure that you provide quality service if the ones providing them are not in good shape? By giving your employees health insurances, you can not only help them get medical attention and do their job well, but it also helps you run and keep a healthy business.

The Restaurant Health Care Alliance is an initiative of National Restaurant Association and the United HealthCare (insurance firm) which aims to provide health insurance coverage for millions of restaurant employees working without insurance. And just as a new Federal health act has been passed last year for the benefit of many employees, restaurant owners have never been more pressured. The Federal Affordable Care Act (ACA) is designed to work with the employee’s need of health benefits which involves awarding of health insurance, more affordable health insurance for employees and many more.

About the Author:

Antonio Evans is an entrepreneur/speaker/researcher who specializes in the intersection of Artificial Intelligence and the culinary world. More from Antonio Evans

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