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National Restaurant Association - Employment-based plans are a shrinking share of restaurant employee coverage

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Employment-based plans are a shrinking share of restaurant employee coverage

Although health insurance coverage among restaurant employees steadily increased in recent years, employment-based plans made up a smaller proportion of overall coverage, according to analysis by the NRA’s chief economist Bruce Grindy.  His Economist’s Notebook commentary and analysis appears regularly on Restaurant.org and Restaurant TrendMapper.

A record 76 percent of restaurant employees had health insurance coverage in 2015, according to data from the U.S. Census Bureau’s American Community Survey (ACS).  This was up from 59 percent of restaurant employees in 2010. 

However, this growth was driven primarily by sources other than employment-based plans, even though more restaurant businesses were required to offer health insurance coverage as a result of the Affordable Care Act. 

In fact, only 59 percent of restaurant employees with health insurance got their coverage through an employment based plan in 2015 – down sharply from 67 percent in 2010.

In comparison, the direct purchase share of restaurant employee insurance coverage rose from 16 percent in 2010 to 18 percent in 2015, while the Medicaid share of coverage increased from 19 percent in 2010 to 24 percent in 2015.   

Health Insurance Costs Outpacing Sales Growth

Health insurance costs rose much faster than restaurant sales in recent years.  Between 2006 and 2016, the average annual employer contributions to health insurance premiums for family coverage jumped 51 percent, according to the Kaiser/HRET Survey of Employer-Sponsored Health Benefits.

During the same 10-year period, average sales per restaurant rose just 33 percent.  This indicates that health insurance costs are taking up a larger share of the restaurant dollar.

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