How ICHRA Helped a Multi-Location Restaurant Group Restructure Group Health Insurance Costs and Increase Employee Participation
A 15-location, multi-franchise restaurant group operating across two states was facing a 40% health insurance renewal increase, with higher healthcare risk concentrated in certain locations. GoBenefits analysed the group’s employee populations and implemented an ICHRA (Individual Coverage Health Reimbursement Arrangement) for the higher-risk population while maintaining a traditional group health plan for the healthier workforce.
As a result Group medical premium was reduced to 8%, while store participation increased as younger employees were able to enrol in lower-cost individual health plans.
Industry
Restaurant & Hospitality
Locations
15 Locations, 2 States
Challenge
40% Renewal Increase & Concentrated Risk
Strategy
ICHRA + Traditional Group Plan
The Challenge: A 40% Renewal Increase Was Putting Pressure on Group Health Insurance Costs
Managing restaurant employee benefits across multiple locations can become challenging when healthcare risk is concentrated within specific employee populations. For this multi-franchise restaurant group, certain stores were experiencing a greater concentration of higher-risk employees, contributing to significant pressure on the organization’s overall group health insurance costs.
The organization was facing a 40% health insurance renewal increase and needed an alternative approach that could address differences in healthcare risk without applying the same benefits strategy across every employee population.
Key Challenges
Rising Renewal Costs: A 40% health insurance renewal increase created significant pressure on the organization’s healthcare budget.
Concentrated Healthcare Risk: Higher-cost healthcare needs were concentrated within certain stores and employee populations.
Multi-Location Workforce: Employees across 15 locations and two states had different healthcare needs and utilization patterns.
Group Health Insurance Costs: Maintaining a single group health insurance approach made it difficult to respond to differences in employee risk.
Employee Participation: The organization needed a benefits strategy that could support participation across different employee populations while maintaining meaningful healthcare coverage.
The organization needed a more flexible health insurance strategy that could address higher-risk populations while continuing to provide competitive coverage for its broader workforce.
The Solution: An ICHRA Strategy Built Around Different Employee Populations
GoBenefits team analysed the organization’s employee populations and identified that higher healthcare risk was concentrated in certain stores. Rather than applying the same group health insurance strategy across the entire workforce, we created separate benefit strategies based on the needs and risk profiles of different employee populations.
We also considered the practical factors associated with ICHRA implementation, including employee class requirements, plan affordability, individual-market options, and the potential differences in provider networks and plan costs across markets.
ICHRA for Higher-Risk Employees
Traditional Group Health Plan
Individual Coverage Choice
Flexible Risk Segmentation Strategy
Employee Impact
Greater Cost Control. More Flexible Benefits.
By combining an ICHRA for the higher-risk population with a traditional group health plan for the healthier workforce, we helped the restaurant group create a more targeted approach to managing health insurance costs and employee benefits.
- More targeted risk management across employee populations
- Greater flexibility in health plan design
- Higher employee participation at participating stores
- Individual coverage options for employees enrolled through the ICHRA
- Continued group health coverage for the healthier employee population
- Better alignment between benefits and employee needs
The strategy also helped increase store participation as younger employees were able to access lower-cost individual health insurance plans through the ICHRA.
This case demonstrates how an ICHRA can give multi-location restaurant groups another way to manage healthcare costs when facing high claims experience, low participation, and significant renewal pressure.
“GoBenefits helped us rethink our approach to group health insurance by creating different strategies for different employee populations. The ICHRA gave us greater flexibility in managing healthcare costs while providing employees with coverage options that better fit their needs. We also saw stronger participation at participating locations.”
— HR & Benefits Team, Multi-Location Restaurant Group
Looking for a More Strategic Approach to Restaurant Employee Benefits?
GoBenefits helps multi-location restaurant groups evaluate ICHRA, group health insurance, and alternative employee benefits strategies to address healthcare costs and workforce needs.