Association health plans (AHPs), an alternative to the Affordable Care Act (ACA), has been a topic of great interest around Washington these days. It remains to be seen whether the proposed expansion of AHPs will come to fruition, but for many small businesses within a common industry, association health plans are an attractive option that could benefit employers and employees alike. It is with that goal in mind that the National Restaurant Association has established the Restaurant & Hospitality Association (RHA) Benefit Trust, an AHP seeking to make health insurance more attainable for small restaurant businesses.
By creating an association that combines the employee pools of member organizations, RHA is offering a unique opportunity for restaurants with 99 or fewer insurance-eligible employees to obtain group-priced insurance serviced by UnitedHealthcare. Currently, those small businesses below the larger corporate ACA thresholds miss many of the discounts and financial benefits that larger companies receive. To offset healthcare costs, many small restaurants have reduced employee hours to keep them below full-time, cut back the total number of employees, or simply not offered company-funded insurance. However, this new option from the National Restaurant Association allows small restaurants to compete for better employees by offering this very important employment benefit. When a restaurant doesn’t offer insurance, many employees are forced to look for work elsewhere so that their needs are met. This AHP is designed to give employers an edge in attracting staff.
Restaurants certainly must work hard to market their services to prospective customers, but employees—and what it takes to retain them—are just as important. In fact, customer experience at a restaurant isn’t only about the food or the atmosphere, but the culture—including the experience that patrons have with the staff. Employee churn increases operating expenses not only because of the expense of training new employees, but because it can also result in lost revenue if it impacts customers. Improving employee benefits—including health insurance—can help solve this issue.
While the RHA program has gone live, association health plans raise concerns because their expansion is still very much in the US Department of Labor’s (DOL) proposal phase. Initiated as a response to an executive order by the President Trump last fall, the effort appeals to many, but also raises a number of concerns:
- Who qualifies as an “employer” for an association health plan?
- What happens when an AHP crosses state lines? How is it regulated?
- Will an AHP be exempt from the Affordable Care Act (ACA)?
The DOL will have to continue to hammer out the details of AHPs and the impact it will have upon the insurance marketplace. However, according to the National Restaurant Association, the RHA Benefit Trust has been crafted to be compliant with the Affordable Care Act, so that those that participate will not have to worry as much about uncertain public policy yet to come. Instead, it is an opportunity to make the most of restaurant group relationships, overhead savings, and a means to attract and retain great employee talent.
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