Hospitality Companies Fear Rising Costs of “Mini-Med” Plans

The hospitality industry is already feeling the effects of healthcare reform, and employees may wind up paying the price.

According to an article in the Nation’s Restaurant News, a recent Hay Group survey showed that over 75% of restaurant employers are considering reducing the hours of full-time workers to part-time, in light of new health care reform mandates.

Starting in 2011, insurers of “mini-med” plans (limited medical plans offered to hourly workers) will be required to spend 80% – 85% of premiums on medical benefits – instead of on overhead expenses.  Currently, most benefit plans in the restaurant industry do not meet these limits, due to greater administrative costs caused by high turnover.

Under September’s reform bill, mini-med plans’ annual limits on coverage were raised significantly for full-time employees – making the plans prohibitively expensive.  These higher limits would not apply to part-timers, however, so hospitality employers might view shifting employee work status as a way around the problem.

Yet restaurant employers may just be trading one problem for another.  Cutting full-timers’ hours may help them avoid health insurance issues, but it may also create new workforce problems in the form of increased turnover and worker apathy.

While employers are weighing their options, they’re buying time by applying for mini-med plan waivers.  These waivers grant a one-year respite from meeting certain requirements (e.g., minimum annual benefit levels) of the federal health care reform law.  In fact, many survey respondents (67%) said they will likely apply for these waivers.

Horizon Hospitality Human Resource Outsourcing (HRO)

If you find yourself spending too much time on employee-related matters and not enough time running your business, Hospitality HRO can help.  By outsourcing your human resource department, you will enjoy a level of employee benefits usually found at only the largest employers.

With Hospitality HRO, you can outsource your human resource department to a company that understands the complexities unique to the hospitality industry.  Hospitality HRO provides clients with exceptional resources, economies of scale and broad human resource expertise.  We’ll help you:

  • simplify your operations
  • refocus on your core business
  • limit your liability
  • control rising costs, such as healthcare benefits
  • enhance productivity

Please contact Horizon Hospitality or e-mail me directly to learn more.


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