Employers in the quick-service world have been erroneously told they have to operate from a position of weakness when it comes to employee healthcare benefits. Employers have been led down paths centered more on ACA compliance with a focus mostly on FT employees, instead of solutions fitting the needs of the quick-service industry, where you have a much higher percentage of part-time (PT) employees. It is the PT employee population where most openings exist, turnover is the highest, and recruiting is the most difficult. Fortunately, both FT and PT employees can be addressed with robust, and more than cost effective solutions.
Viable and vetted programs exist, accomplishing positive results on their own. The “wow factor” happens when they are bundled together as a turnkey solution. Immediately, employers can compete for employees, including the ability to offer part-time or variable hour employees a pathway to affordable and portable health care. Employers dramatically reduce costs, while improving their offering. Employees will have options to improve coverage, and it will cost much less. In many cases, employees working for quick-service, the cost will be $0, and include their families.
Why is this possible? Three governmental regulations help drive this, with the newest being in place for two years.
- American Rescue Plan (March 2021) /Inflation Reduction Act (August 2022)—provides Affordable Care Act (ACA) subsidies.
- IRC Section 501(r) Modifications (December 2015)—IRC Sections 501(r) 3,4, and 5 center on non-profit hospitals, which account for over 70 percent of hospitals nationwide. Legally, they must provide affordability for hospital care to those who cannot afford it, based on multiples of the Federal Poverty Levels.
- IRC Section 125 (November 1978)—Provides employees the option to pay for certain benefits pre-tax. Employers benefit by not having to pay matching FICA (Social Security and Medicare) taxes.
As a result of these Internal Revenue Codes and the Inflation Reduction Act, some tremendous, fully insured, limited health programs and great advocacy services have emerged, providing employers and employees, including their families, access to real and affordable healthcare coverage, relief from hospital costs, and much more. Currently eight-10 insurance carriers (and growing) offer fully insured limited health plans designed to save employers hundreds of dollars annually in matching FICA taxes for each participating employee. These programs also have a positive impact on most employee paychecks. Because of program design, numerous ancillary benefits can be bundled in, such as $0 co-pay telemedicine, EAPs, wellness, mental health solutions and advocacy services for the entire family.
This totally changes the narrative for employers in the quick-service world. Instead of struggling with healthcare benefit offerings mostly geared towards your FT, benefit eligible employees, which is only 20–30 percent of your population, you now have a viable, cost-effective solution for all employees. Furthermore, by re-investing the FICA tax savings generated by the limited healthcare plan back into your group healthcare plan, you strengthen it even more.
Take a hard look at the statistics. They aren’t pretty, and it’s obvious changes need to be made. The quick-service world does not fare well compared to other industries. Employers and employees have some huge battles. Here are the facts:
Employees—Among Highest Percentage
- Living in poverty
- Single moms
- Medical debt
- Fighting addiction
- Living with depression
- Wage Increases
- Industry flight
- Changes to business model
- Governmental pressures
- ACA compliance
- Fear of union
The good news … these viable and more than affordable solutions benefit everyone! Employers increase EBITDA, while vastly improving their benefits offering. Immediately upon hire, a tremendous first impression is created with new employees before they even clock in for their first shift. Employers become heroes right out of the gate. You only have to look at the statistics to realize the struggles many of these employees are facing. Can you imagine the stress relief a single mom will have, knowing she has real and affordable healthcare for her and her family, or the person already struggling to pay bills now has access to affordable healthcare?
This doesn’t solve all the problems, but it puts quick-service restaurants back in the game. They can now compete from a benefits perspective while reducing costs. It is also very likely they will reduce turn-over, improve morale, productivity, and have a much happier workforce, leading to happier customers, increased sales, and greater profits.
Jennifer Willmore is the President of Benefit Disruptors, a leading healthcare benefits trend-setter in the quick-service/Restaurant/Hospitality industries. Jennifer spent 15 years working in the hospitality industry. Based on her own real-life experiences and programs she personally uses; she took the path of becoming a licensed health broker to create the strongest healthcare benefits solution for these underserved industries.