I had a great meeting the other day with a health insurance broker that specializes in the restaurant space, Chad Sidles of Sidles, Duncan & Associates (https://www.sidlesduncan.com/). During the conversation, Chad and his partner Peter pointed out that they had recently helped a large, profitable chain save thousands annually by setting up a ‘self-funded’ benefit plan for their employees. Why does this work for multi-unit restaurants and what is it?
A self-funded health care plan is one in which the employer will cover the cost of the deductibles and any out of pocket expenses on behalf of the employee (see https://en.wikipedia.org/wiki/Self-funded_health_care). They avoid the really really expensive health care costs by getting a very high deductible to cover major events (this comes with a much lower premium than your typical plan.)
Why does this work well for restaurants? Because the typical demographic of a restaurant employee is relatively low and therefore doesn’t use the doctor much. The less your employees actually visit a doctor, the more money you save as an employer. The average age of a restaurant manager in the US is 38.
Speaking from experience, a number of years ago we switched interally to this type of a plan and we saved just over $9,000 per year in health insurance premiums. We have about 30 people we cover on our plan and it worked for us because they are all between the ages of 25 and 40 (a low-risk age group.)
If you have not spoken to your heath broker recently, make sure you bring this topic up to them. It could put more money in your pocket instantly.
Morgan Harris – Co-founder | Restaurant365