Restaurants in Atlanta ask diners to cover health insurance for servers

“I do not want to bury it in a price increase. I wanted the customers to understand, ”O’Brien said.

She feared backlash from customers, but feedback has been overwhelmingly positive.

Calvert said he has not experienced a single pushback incident at the Ticonderoga Club, adding: “I have had guests thank us for it again and again.”

Vizethann estimated that 90% of Buttermilk Kitchen’s customers have been “super friendly and positive” about the decision, although some have questioned why she does not just raise prices.

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“I do not want to praise myself out of the market,” she said.

In addition, she said that by using the service charge as a line item instead of folding costs into prices, it allows for flexibility and helps with accounting. “If there is a guest who feels strongly about not paying for it, we simply remove it,” said Vizethann, who has removed the charge from customer bills twice since the implementation of the new policy this fall. “As a separate line item, I can see exactly what comes into that contribution.”

caption arrowCaption

Buttermilk kitchen owner Suzanne Vizethann added a 5% pre-tax surcharge on all transactions to cover health care and sick leave. The added fee is displayed as a line item on all customer receipts. Lent by Suzanne Vizethann

Credit: Suzanne Vizethann

Buttermilk kitchen owner Suzanne Vizethann added a 5% pre-tax surcharge on all transactions to cover health care and sick leave.  The added fee is displayed as a line item on all customer receipts.  Lent by Suzanne Vizethann
caption arrowCaption

Buttermilk kitchen owner Suzanne Vizethann added a 5% pre-tax surcharge on all transactions to cover health care and sick leave. The added fee is displayed as a line item on all customer receipts. Lent by Suzanne Vizethann

Credit: Suzanne Vizethann

Credit: Suzanne Vizethann

Prior to the change, Vizethann was only able to offer health insurance to salaried executives. The fee allows her to offer health care to 22 hourly wage earners, half of whom are enrolled.

“In our industry, this is something completely unheard of with small restaurants,” she said. ‘It puts focus on that topic. It’s a way for us to start taking care of our people. “

Little Tart employee Lea Liles, whose husband is also now insured through his plan, welcomes his boss’ decision. “We have medical, dental and vision. It’s been great to get all those things,” she said. “For the doctor, you only have to pay a deductible. I have not had to pay too much out of pocket, which is great.”

Another kind of war

Employer-funded health care has not always been the norm in the United States. Before World War II, most Americans paid for all of their medical care or had health insurance that only covered major expenses, such as hospitalizations. Other expenses were paid out of pocket, directly to the providers.

During World War II, the federal government introduced wage and price controls on employers in an effort to avoid inflation. This prompted companies to offer other incentives, including health benefits, to compete for workers.

After World War II, health care coverage for people went up all over the world. Britain, Canada and European countries opted for universal health care, funded by the government. The United States chose to rely on expanding the system of private health insurance purchased by employers.

Into the third year of a pandemic, and in the midst of the current wave of the highly contagious omicron variant, restaurant operators are in a position similar to business owners 80 years ago as they try to attract and retain employees while also take care of their well-being.

“We can only pay our staff that much,” Calvert said. “What we can do is find ways to build value: insurance, pay rises based on employment and reaching sales targets, access to life insurance. We offer maternity leave. Next year we hope to offer PTO (paid free). We try to build a holistic value for our staff so that it becomes not just payroll, but consistency and life and health and all that. “

The food service industry has among the highest numbers of uninsured workers in the United States. Using data from 2013-2014, a 2018 survey was published by the Centers for Disease Control and Prevention found that 35.5% of food service workers between the ages of 18 and 64 reported that they had no health insurance coverage.

The key has always been affordability, said Georgia Restaurant Association president Karen Bremer. “More employers, if affordable, would do it. Many employers have to look at different paths to help support their employees.”

Calvert and his business partners had considered adding a supplement to the Ticonderoga Club ahead of the pandemic. Then, when the virus hit, revenue dropped by half. “We were afraid to launch it because we could not afford to lose any revenue at all,” Calvert said. “When we first realized that COVID was a lifestyle and would not go away, we thought, ‘We put this as a line item.'”

Instead of offering a health insurance plan to employees at Mission and Market in Buckhead or Tre Vele in Sandy Springs, chef partner Ian Winslade reimburses employees up to $ 250 a month for medical expenses. “We’ve looked at different levels,” he said. “They are unreasonably expensive. Health insurance is such a catastrophic mess at the moment, at all levels. The costs have risen sharply and the benefits have dropped dramatically. The co-insurance piece is so high.”

Winslade said affordable insurance schemes do not favor a small business like his, which employs only 50 people, compared to a larger restaurant group that has a payroll of 100 or more employees.

The Atlanta-based Fifth Group, which operates such local restaurants as Ecco, South City Kitchen and Alma Cocina, currently employs 550 people, down from 950 before the pandemic. It offers healthcare as part of its benefits package, but even this large restaurant group is struggling to get the insurance to meet. “We have a lot of (insurance) companies that were not interested in bidding on us because we were not big enough,” said partner Robby Kukler.

The pandemic exacerbates insurance costs. “It’s challenging if you have … high consumption in a year, like COVID, where you have team members using insurance. It tends to drive insurance costs up,” said Tish Morris, director of human resources at Sizzling Steak Concepts, which operates four Ruth’s Chris Steak House franchises in the Atlanta subway, as well as Up on the Roof in Alpharetta.

The Unsukay restaurant group, which includes Local Three in Vinings and MTH Pizza in Smyrna, offers insurance to its full-time employees (defined as anyone who works more than 28 hours a week). Chef partner Chris Hall said the company has seen between 30% and 50% increases in insurance costs each of the past five years, and has changed insurance company twice during that time. “At some point, it starts to hit an unsustainable number,” Hall said. “I can not even transfer a surcharge, as things are rising right now, otherwise you will want a $ 24 hamburger.”

Calvert said the Ticonderoga Club supplement is “better than nothing,” but he also expressed frustration that “the system is generally broken.” He lamented a loss of $ 30,000 in gross revenue in December, when omicron caused him and other restaurant operators in the area to close temporarily. “If I ever have to close and have no income, I still have to pay insurance,” he said. “It’s a huge challenge. Sales have dropped, but our insurance bill is still the same. Once you’ve committed, there’s no going back.”

Call for help

Since announcing the supplement at Little Tart, O’Brien has let Vizethann choose her brain in terms of funding employee health care, and will also soon meet with the owner of a spa in Grant Park who is interested in taking that step.

Vizethann has asked a few queries, including from a restaurant owner in Florida. She called the process “scary and intimidating” as well as cumbersome and pointed out that there is not much downtime or administrative time in the restaurant industry. “If I had not had Sarah (O’Brien) sit down and sketch it all out, I probably would have delayed it,” she said.

caption arrowCaption

Signage at Buttermilk Kitchen notes a 5% fee on transactions to cover employee benefits. Lent by Suzanne Vizethann

Credit: distribution

Signage at Buttermilk Kitchen notes a 5% fee on transactions to cover employee benefits.  Lent by Suzanne Vizethann
caption arrowCaption

Signage at Buttermilk Kitchen notes a 5% fee on transactions to cover employee benefits. Lent by Suzanne Vizethann

Credit: distribution

Credit: distribution

Calvert was contacted by a number of food service operators – including groups employing hundreds of people in several states – who were fascinated by the health care supplement, but never followed up. “If one or two did this, it would be nationally affected,” he said. “It can change hundreds of lives.”

Since its inception in 2013, the nonprofit organization Giving Kitchen has helped thousands of food service workers face unexpected difficulties. Last year, the Atlanta-based organization served nearly 1,900 customers and distributed $ 1.4 million in financial assistance, of which more than $ 427,000 went to customers directly affected by COVID-19. Requests for help have increased 229% compared to 2018.

Vizethann and Calvert wonder if an organization like Giving Kitchen could play a role in helping other small businesses navigate the insurance equation.

“What if they had someone to help set it up?” said Calvert. “What if Atlanta became the first city to have their entire restaurant strength covered?”

“People have asked us before if we could be a broker, but that’s not possible from a legal or logistical point of view,” said Giving Kitchen CEO Bryan Schroeder. But he added that the organization is working to create an employer tool, “for operators who say, ‘I need help making my restaurant a better restaurant’.”

The resource will address a range of topics, including mental health, insurance and harassment in the workplace, he said. “We know that intention and heart are there. What people need is guidance and the first steps.”

Atlanta Journal-Constitution health reporter Ariel Hart contributed to this article.

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