With over 13 million people working in the $566 billion American restaurant industry, the National Restaurant Association (NRA) is committed to finding solutions to the escalating costs and shortage of health insurance coverage. Employers and employees of restaurants face a serious challenge that threatens their ability to obtain health coverage: the ever increasing cost of health care. As America continues to strive for innovation in health care, we must find ways to make health care more affordable for families, business of all sizes and entrepreneurs.  

As the nation’s second largest private sector employer, the National Restaurant Association (NRA) and our affiliated organizations and members support expanding coverage in a way that maintains our ability to put even more Americans to work. To that end, NRA supports:  

Ensuring the continued viability of private businesses while increasing the availability of health care options for Americans who choose to participate

• The Association opposes employer mandates, and any "pay or play" option under consideration at a minimum must fairly treat employers with high labor costs related to overall profitability. A per capita tax on employers fails to recognize that restaurants employ large numbers of employees across the wage spectrum and operate on extraordinarily thin profit margins. Employer mandates also fail to recognize that many restaurant employees work for multiple employers. The cost of employer mandates can potentially be quite damaging to the restaurant industry given the narrow profit margins commonly found across the industry's diverse business models.  In addition, the industry's heavy reliance on labor can also exacerbate the cost factor given that health care proposals frequently use # of employees as a key metric.

• Part-time worker exemption from any total employee calculation or penalties.
• Protect small business with as robust an exemption as possible.
• Secure a 90-day waiting period before employer requirements begin.
• Modify the definition of full-time employee as one working 390 hours/calendar quarter (13 weeks).

• Taxes and fees aimed at financing health care reform must be sensitive to the economics of businesses and individuals. Costs must avoid inhibiting new jobs creation, preventing basic business profitability or limiting the opportunity for business to continue or increase their ability to provide private health care options for their employees.

• Mandated minimum coverage levels fail to recognize the widely varying needs of the employee base of the restaurant industry. It is preferable to allow employers to offer benefits that are uniquely aligned with the needs of their workforce.

• As more than 80 percent of health care consumers spend less than $1,000 a year on medical care (especially in service industries with a predominance of younger workers), the most pressing coverage needs are for policies that cover major illness or accident.   Allowing insurers to offer catastrophic coverage for major illness or injury (versus “pre-paid health care”) would open up more opportunities for employees to opt for the kind of coverage that best matches their needs.  
  

Expanding coverage through containment of health care costs

• Contain health care costs by group purchasing through a network of private, nonprofit cooperatives.

• For many years, the NRA has supported the creation of health care pooling arrangements or “exchanges” that provide small businesses increased options for affordable health care.  These policies would allow small businesses like restaurants to pool employees’ health coverage statewide or nationwide to achieve lower rates.  The NRA supports the bipartisan SHOP ACT (Small Business Health Options Program Act) introduced in the 111th Congress by Senators Durbin, Lincoln and Snowe (S. 979) and Congressman Ron Kind (H.R. 2360). 

• Allow small businesses and the self employed to band together in a statewide or nationwide pool to obtain lower health insurance prices.
• Offering a range of private health plans that have to compete for business.
• Qualifying small business owners are allowed an annual tax credit of up to $1,000 per employee ($2,000 for family coverage).
• Self-employed individuals would get an $1,800 annual tax credit ($3,600 for family coverage) to purchase health insurance.
• Cut down on administrative costs for small businesses.
• Ban the practice of rating insurance based on health status and claims experience.

• The NRA supports the CHOICE ACT (Cooperative for Healthcare Options to Improve Coverage for Employees – H.R. 6582 in 110th Velazquez/Pitts, H.R. 850 and H.R. 859 in 111th) which allows businesses to form cooperatives similar to risk pools and provide coverage for high-cost claims. 

• The NRA supports expanding and increasing flexibility with Health Savings Accounts (HSAs). NRA opinion polling shows that 70 percent of restaurant employees have a strong interest in HSAs.

• Incentivize individuals to live healthier lifestyles and promote wellness in the workplace.

• NRA research showed 64 percent of employed Americans have a strong interest in using wellness programs.  As up to 80 percent of health care dollars are spent on 20 percent of patients, the greatest savings will come from better managing care for those with high-cost chronic illnesses as well as encouraging more participation in wellness programs.   
 

• Reform the health care delivery system to curb fraud and abuse, saving dollars for key health care needs.

• The NRA supports initiatives that promote the use of health information technologies and its swift implementation, including creation and use of interoperable electronic personal health records that would increase efficiency of health care services and the accuracy of health care information while reducing treatment and prescribing errors. 
 

• Address tort related matters that have contributed to the increasing cost of health care.

• Encourage both federal and state governments to pass medical malpractice reform to reduce the lawsuit abuse that drives up the overall cost of health insurance and medical care.  The skyrocketing health insurance premiums caused by frivolous suits hurt both employers and employees. 
  

Strengthening the viability of the private insurance market through increased competition and effective, but reasonable regulation

• Increase choice in coverage by expanding competitive and viable health care coverage options in the market place.

• Employers and employees in high-cost states should be able to get access to lower-cost alternatives across state lines.  Cross-border purchasing provides both state and Federal legislators the opportunity to authorize multi-state, regional, or nationwide insurance markets, benefiting not only workers in states with high health insurance premiums, but the economies of states with low premiums as well. 

• Create a more competitive, affordable and accessible private health insurance market for entrepreneurs, businesses, both small and large, and individuals.

• To provide coverage to a mobile workforce, allow uninterrupted coverage and extend coverage to the uninsured, tax laws and insurance regulations should permit employees to take their coverage with them when they change jobs.  Given that restaurant employees change jobs more often than other workers, such an option would disproportionately benefit them – and their next employer. 
 

• Enable both employees and employers to deduct the cost of their health insurance premiums under state and federal law. Current tax policies essentially lock health insurance to the workplace. This would expand opportunities for employees in the restaurant industry and other sectors. It would foster a system that reflects the needs of both employers and employees by providing each with the ability to pay for health coverage with pre-tax income.

• Refundable tax credits paid in advance by state or federal authorities to low-income workers who need premium assistance the most would greatly increase the ability of these workers to afford health coverage.  This would provide more heath care buying power for the workers least likely to have insurance coverage today. 
  

• Preserve the rights granted under ERISA allowing employers to offer uniform benefits across state lines.

• Defend current ERISA protections for multi-state employers.