Government Mandated Health Insurance

[DanM]

First off, let me preemptively request that we keep this discussion civil. The proposed US government mandated health insurance law is a heated subject to many. Lets please keep the discussion to its affect on the food service industry and not the law itself.

It looks more likely every day that congress will enact a law requiring all Americans to have health insurance through either an employee based health insurance plan or a government run program. I was wondering what impact the proposed law will have on the food service industry.

How will it effect food prices and cost to your customers?

How will this effect hiring practices, wages, employee retention, and other employee issues?

How will this effect profit margins for businesses?

Is this even feasible in a restaurant environment?

Will restaurants offer insurance, or will they pay the penalty and make employees buy their insurance from the government?

etc...

If this bill does become law, it will have a significant impact on the food service industry. I hope this thread will help those of you who own or run a restaurant or food service company better understand how it will impact your business and for everyone else to understand the impact of the law will have on our dining experience.

[tomdarch]

So far I've heard almost no actual debate in the ongoing so-called "healthcare debate" - the set of issues is so complex that very few of us grasp enough of the details and issues to be able to develop a truly informed opinion. This strikes me as a potentially very interesting way to get at the issue - how will some of these proposed reforms effect one particular industry? From the little bit I understand about how the majority of "restaurants" operate, it may be very difficult on them. They seem to be structured on a reliance on very low paid labor with few or no "benefits", including the interesting exemption of servers from minimum wage laws.

I should say that I am not involved in the restaurant industry, other than being a frequent patron! In the abstract, I am quite willing to pay somewhat more for my meals in exchange for both the moral/ethical benefit of knowing that the people working there have access to basic health services and the very practical benefit of reducing the probability that the person prepping my salad ingredients is coughing up some infectious disease because he can't afford antibiotics or the doctor visit to get the prescription in the first place. But, how much more might I be charged? That's very difficult to predict.

This low-pay structure will probably benefit some restaurants. If we're using the current House bill (HR 3962) as the basis for discussing "Healthcare Reform", then there are a set of exemptions for small businesses. These exemptions start for businesses with annual payrolls of less than $750,000. That would seem to allow for a lot of sub-minimum wage servers and low paid dishwashers. (not to mention the fact that some restaurants pay folks in, er, "creative" ways that would further reduce their "official" payrolls). I'm not expert enough to find the exact exemptions in the current HR 3962, but in previous versions, many (possibly most) small businesses were entirely exempt from the requirement to provide employer-based health insurance for their employees. Nice for the restaurant, but that situation would simply shift the mandate to the low-paid employees themselves. I can't say for sure, but my understanding is that most mom-and-pop places and small diners would have no direct effect from HR 3962, other than that the owners themselves would be required to have health insurance. It's the big restaurants with better paid staffs that would be directly impacted by a mandate for employer-provided insurance - but some of them are already effected by currently existing federal and state requirements precisely because of their large staffs and/or large payrolls.

(as an aside, this is a huge, complicated bill. But after hearing the ever-growing page counts (1900! 2000! 2040! 8 bajillion pages! "Ahahahahaha!" says the Count!) I was surprised to see exactly why there are so many pages - the official format is one narrow column of text on each page, sometimes indented, with only about 5 to 10 words per line. Also, if I understand correctly, only part of the bill is "new legislation" - there seem to be big chunks that clarify how this bill supersedes or amends other pre-existing legislation.)

Here's HR 3962 in all it's sausage-y glory: http://docs.house.gov/rules/health/111_ahcaa.pdf

Another question: What portion of restaurant workers qualify for their state's Medicaid program? I think that HR 3962 expands the Medicaid program, which could cover some low-paid restaurant employees.

[Chris Amirault]

Big article in Nation's Restaurant News today, with the expected organizations coming out against the bill:

The National Restaurant Association, International Franchise Association and National Council of Chain Restaurants all said last week that they opposed the House bill, which mandates that employers offer health benefits to part-time employees or pay a penalty. ...

In its letter to House members, the NRA maintained that the foodservice industry is made up largely of small businesses "with an average profit margin of less than 4 percent, and in the current economic environment total industry sales are down considerably over the last two years."

The NRA said that more than 90 percent of the foodservice industry is made up of small businesses with 50 employees or fewer. "Without a broader exemption for small businesses, as well as consideration for the overwhelming number of part-time employees we have, the bill would place unforeseen hardships on our industry."

[paulraphael]

Maybe we should be looking to countries that have both excellent restaurants and excellent health care. France? Spain? Italy? Great Britain? Japan? How do they do it?

[prasantrin]

In Japan, most people are covered by the National Health Insurance Plan or some sort of employee health insurance plan (like the Teachers Union Health Insurance). In the case of national health insurance, which is most likely what most restaurant employees are covered by, the cost depends on the person's income. I pay a whopping $3500 a year in insurance premiums, plus I have a 30% co-pay if/when I actually require medical or dental services.

The average restaurant employee, even at high-end restaurants, makes much less than I do (I am assuming), so their premiums would be much lower. The restaurant, as far as I know, would not be responsible for any of the costs, so it would not affect the prices.

Unionized work places, however, usually have employee health care plans. In those cases, the employer pays roughly half the cost of the premiums. I imagine as far as restaurants are concerned, this would only affect those restaurants in hotels, if even those.