Small Business

Health Insurance for Restaurant Employees

Published on December 18, 2019


Are you considering health insurance for your restaurant employees? You may be surprised to learn that even small restaurants can qualify for small business health insurance coverage, and your restaurant may be able to save money through lower group premiums and potential small business tax credits.

If you’re not sure if you can afford health benefits for your restaurant employees, continue reading to learn how group medical coverage could be more accessible than you may have previously thought.

Should you provide group health insurance to your restaurant employees?

According to the Affordable Care Act (ACA), an employer is not required to offer health insurance if it has less than 50 full-time or full-time equivalent employees. However, although restaurants may not be obligated to provide medical benefits to their workers, offering a group health plan may help business owners through contributing to a key strategic priority: the retention of restaurant employees and staff.

Due to the unique nature of the restaurant industry, restaurant owners have faced significant challenges that often prevent them from being able to offer health insurance benefits to their employees. In particular, the primary problem is that restaurants tend to be high-turnover businesses, which can create labor issues for employers because of frequently needing to look for and train new staff.

Offering popular benefits to your restaurant employees, such as group health insurance coverage, may be an effective way to reduce turnover and increase loyalty and retention. Workers may be more likely to stay at a restaurant if they know that their employer cares about their long-term well-being. From the restaurant owner’s perspective, additional benefits of providing health insurance may include less employee absences and less sick days due to workers having more access to medical resources.

How small business health insurance can help your restaurant save money

Offering group health insurance to your restaurant employees may be easier and more affordable than you previously thought. Enrolling in small business health insurance coverage could allow both you and your restaurant employees to save on the cost of health benefits in several ways:

  • More affordable premiums – Group health insurance premiums tend to cost less than individual health plans. According to an eHealth study, the average small business health insurance premium per person was 7 percent lower than the average individual health plan premium.
  • Cost sharing contributions – In group health plans, employers typically share the cost of monthly premiums with their workers. As a result, employer-sponsored health coverage may be a more affordable option for your restaurant employees than getting their own individual policies.
  • Tax deduction benefits – As a small business, you can usually deduct health insurance premiums paid toward employee health coverage from your federal business taxes.
  • Potential tax credit – If your restaurant has less than 25 employees and meets certain annual wage requirements, you may be able to qualify for the small business health care tax credit.

The benefits of group health coverage are available even if you have relatively few restaurant employees at your business. According to the eHealth 2018 Small Business Health Insurance Report, the average number of covered employees was 3.9 people among small businesses that purchased group health plans through eHealth in 2018.

Restaurant health insurance: which health plan is best?

As a small business owner, you have the final say regarding what benefits should be offered to your restaurant employees and staff. If you are shopping for group health coverage for your restaurant, relevant considerations to keep in mind include which health plans and insurance companies are available in your area, as well as your budget and coverage priorities.

According to the eHealth 2018 Small Business Health Insurance Report, Point of Service (POS) plans were chosen by almost half (47 percent) of small business owners, while Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) plans were also popular choices. Overall, selecting between plan types will often depend on finding a balance between costs and flexibility.

Choosing the best health plan for your restaurant employees will involve speaking with your staff to find out what their medical needs and preferences are. Since each plan has different terms, conditions, and limitations, be sure to review official plan documents to understand how a specific health plan works.

By offering medical insurance to your restaurant team, you may be able to better retain key people who share your passion, enthusiasm, and dedication as a restaurant owner. Ultimately, choosing a small business health plan could be a practical and effective way to help you keep your best restaurant employees, servers, cooks, and chefs on board for the long term.

eHealth can help you find affordable small business health insurance plans that work for the budget and coverage preferences of your restaurant employees, as well as you and your family. Visit or speak with one of our licensed health insurance agents to learn more about your options today.

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