Quick meals franchises and quick-service eating places face a singular problem on the subject of medical health insurance. Earlier than the Reasonably priced Care Act (ACA), many franchise house owners solely supplied protection to their administration groups, sometimes round 30 staff. However when the ACA’s employer mandate kicked in, that equation modified dramatically.
Now, any enterprise with 50 or extra full-time equal staff should provide medical health insurance to anybody working 30 or extra hours per week. For franchise house owners, this abruptly meant providing protection to 500+ staff as a substitute of simply 30 managers. Conventional group medical health insurance shortly grew to become unmanageable, each financially and administratively.
That’s the place ICHRA is altering the sport for the hospitality business.
The quick meals franchise problem
The restaurant business faces distinct hurdles that make conventional group medical health insurance notably problematic.
Excessive worker turnover. Fast-service eating places expertise the best stop fee of any business based on the Bureau of Labor Statistics.¹ With fixed workforce modifications, monitoring eligibility and managing enrollments turns into an administrative nightmare.
Low participation charges. Many restaurant employees are younger, earn decrease wages, or have already got protection via a mum or dad’s plan or authorities packages. When participation drops under 50-75%, group plan premiums skyrocket for everybody who stays enrolled.
Unpredictable renewals. One franchise group acquired a 50% premium enhance from United Healthcare in 2024 as a consequence of low participation and excessive utilization.² This can be a widespread story throughout the business. One other hospitality group confronted a 63% renewal enhance earlier than switching to ICHRA³.
Various workforce wants. A cashier incomes minimal wage has vastly completely different healthcare wants and price range constraints than a normal supervisor. Conventional group plans pressure everybody into the similar one-size-fits-all protection.
Variable hours and seasonal employees. Restaurant staffing fluctuates between busy and sluggish seasons, making it troublesome to find out who qualifies for full-time standing underneath ACA guidelines.
Why ICHRA works for quick meals franchises
In accordance with Eric Consiglio, a advantages advisor who works with a number of quick meals franchise house owners together with McDonald’s, Burger King, and Tim Hortons areas, ICHRA solves the core drawback: “The ICHRA technique actually hit residence for what they’re seeking to obtain.”
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Right here’s why ICHRA is turning into the go-to resolution for franchise house owners:
Price range management and predictability
With ICHRA, franchise house owners set precisely what they wish to pay per worker. No extra shock 40-60% premium will increase at renewal. No extra watching prices spiral as participation drops. The allowance quantity stays secure 12 months after 12 months, making healthcare prices probably the most predictable line merchandise on the price range as a substitute of probably the most unstable.
One franchise HR director even acquired her first-ever bonus after switching to ICHRA due to the corporate’s healthcare financial savings.²
Worker selection and adaptability
“Most of these staff solely have single protection,” Eric notes. With ICHRA, staff store for their very own particular person medical health insurance plans on {the marketplace}. Younger, wholesome employees can select inexpensive high-deductible plans. Staff with households or persistent circumstances can choose extra complete protection. Everybody will get what they really want as a substitute of being pressured into an costly group plan they could not need or cannot afford.
ACA compliance with out the headache
For franchise house owners who qualify as relevant giant employers, ICHRA satisfies the ACA’s employer mandate necessities. So long as the allowance meets affordability requirements (9.96% of the worker’s earnings for 2026), franchise house owners keep away from penalties whereas giving staff entry to high quality protection.
Scalability throughout a number of location
Michael Yacoub, an advisor working with a consumer who owns 20-25 quick meals chains, explains the executive benefit: “They didn’t have to fret about participation necessities and renewals.” Whenever you’re managing a whole lot of staff throughout a number of areas, ICHRA’s simplified administration turns into invaluable. No extra coordinating enrollments, managing claims, or coping with completely different provider necessities at every website.
Actual outcomes from restaurant franchises
The numbers converse for themselves:
- Leblon Franchising Holdings (23 Popeyes areas): Prevented a 50% premium enhance by switching to ICHRA, reaching full price range stability.²
- Palisades Hospitality Group: Escaped a 63% group plan renewal and now provides inexpensive protection throughout all California and out-of-state areas.³
- Multi-location franchise consumer: Diminished medical health insurance prices whereas sustaining high quality advantages for a 550-employee workforce with traditionally low participation.
Michael’s consumer was initially unfamiliar with ICHRA however grew to become a loyal advocate after seeing the outcomes: “She’s been an ICHRA fan for about two years, and she will’t converse extra extremely of Take Command.”
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Understanding the ICHRA worker expertise
For restaurant employees, ICHRA gives one thing conventional group plans not often provide: private management.
Youthful staff of their 20s and early 30s, who make up a good portion of the hospitality workforce, can choose fundamental, low-cost plans that match their restricted healthcare wants. Many pay nothing out of pocket as soon as the employer’s allowance is utilized.
Staff with households can select plans with broader networks that cowl their kids’s pediatricians and specialists, one thing that is unattainable when everyone seems to be locked into the identical group plan.
Staff transitioning between jobs hold their particular person plans even after leaving your restaurant, eliminating protection gaps that happen with conventional employer-sponsored insurance coverage.
Getting began with ICHRA
Making the change would not must be sophisticated:
- Decide your worker lessons – You possibly can provide completely different allowance quantities to full-time vs. part-time staff, hourly vs. salaried employees, or staff in numerous geographic areas.
- Set your allowances – Resolve what you’ll be able to afford to contribute per worker per 30 days. You management the price range utterly.
- Select an administration associate – Work with an ICHRA platform like Take Command that handles compliance, worker help, and reimbursements, so you’ll be able to give attention to operating your eating places.
- Talk with staff – Assist your group perceive their new profit and the way to buy protection that meets their wants.
- Deal with reimbursements – Staff submit proof of protection, and also you reimburse them tax-free via your ICHRA administrator.
The underside line for franchise house owners
The hospitality sector continues to face unprecedented challenges with labor prices, worker retention, and compliance necessities. Quick meals franchise house owners who’ve made the change to ICHRA constantly report the identical outcomes: secure prices, happier staff, and dramatically simplified administration.
As Eric places it, for franchise house owners within the hospitality sector, “The ICHRA technique actually hits residence for what they’re seeking to obtain.” Whenever you’re managing a number of areas, a whole lot of staff, and tight margins, ICHRA provides a strategic benefit that conventional group medical health insurance merely cannot match.
Able to discover ICHRA on your quick meals franchise or QSR? Take Command can assist your hospitality enterprise transition to ICHRA with minimal disruption and most financial savings.
Contact our group to see how a lot you may save whereas bettering advantages on your restaurant employees.
References
- U.S. Bureau of Labor Statistics. (2022). Job Openings and Labor Turnover Survey. Retrieved from https://www.bls.gov/
- Hooper, J. (2025, April 8). Contained in the New Insurance coverage Mannequin Serving to Eating places Serve High quality Healthcare. QSR Journal. https://www.qsrmagazine.com/story/inside-the-new-insurance-model-helping-restaurants-serve-quality-healthcare/
- Take Command Well being. (2024, November 19). How Palisades Hospitality switched to ICHRA and prevented a 63% group plan renewal. https://www.takecommandhealth.com/success-stories/palisades-hospitality