facebook pixal
Workforce

DOL offers relief on health insurance costs

Employee health insurance could become more affordable for restaurants and other small businesses under a regulatory change proposed today by the U.S. Department of Labor.

The measure would enable employers like restaurateurs to band together, even across state lines, for more leverage in negotiating rates from insurance companies. Forming a group could also provide the scale that enables larger companies to self-insure, or essentially form a funding pool of sufficient size to pay employees’ healthcare expenses.

“By joining together, employers may reduce administrative costs through economies of scale, strengthen their bargaining position to obtain more favorable deals, enhance their ability to self-insure, and offer a wider array of insurance options,” DOL said in announcing the proposed rule changes this morning.

Small employers could come together on the basis of geography or industry to obtain insurance for employees. Previously, rules permitted some pooling of insurance purchases, but regulations blocked groups from extending across state lines.

The expectation is that existing national trade groups and affiliations like franchise associations would add coverage options for members.

“The National Restaurant Association applauds the administration for supporting healthcare options for small businesses to allow them to pool their resources to provide healthcare for their employees” Clinton Wolf, SVP of health and insurance services for the association, said in a statement.

Sole proprietors of a small business could also join the groups themselves to secure less-costly health insurance coverage.

DOL will be collecting comments from the public about the new rules for the next 60 days.

The proposed change is the latest example of DOL becoming more employer-friendly under President Trump. The department has also delayed adoption of new overtime-pay regulations and has proposed rule adjustments that would allow front-of-house tips to be shared with kitchen employees.

Want breaking news at your fingertips?

Get today’s need-to-know restaurant industry intelligence. Sign up to receive texts from Restaurant Business on news and insights that matter to your brand.

Trending

More from our partners