Burgerville serves up generous health plan, mandate or not

Burgerville serves up generous health plan, mandate or not
Pictured from left to right are Jack Graves, Burgerville's chief cultural officer, with Burgerville general managers Beth Kelly and Paul Ridlon, at the Tigard Burgerville's first anniversary celebration.

Burgerville may be well known in the Portland-Vancouver region for its seasonal milk shakes and Walla Walla sweet onion cheeseburgers. But another reason it stands out has nothing to do with the menu.

In an industry not known for showering generous benefits on part-time staff, the Vancouver-based restaurant chain offers a health plan to employees working as few as 25 hours a week and pays up to 95 percent of their premiums. Single employees pay $30 a month (with a $500 annual deductible) and those on the family plan pay $100.

The Affordable Care Act will require “large employers,” with 50 or more full time workers (those who clock at least 30 hours a week) to offer health benefits starting in January 2015. There will be a stiff penalty for failing to do so. Many restaurant owners are worried that the added expense won’t pencil out, but Burgerville has already gone beyond Obamacare requirements.

“We offer pretty incredible benefits to our employees already,” said Jack Graves, the burger chain’s chief cultural officer. “The health care transformation is going to have an impact. We’ll make choices in how to move forward based on what’s best for our employees.”

Graves said some workers may be better off buying their health insurance through their state exchange, where individuals and small businesses will be able to purchase plans starting in October. He said he has read in trade publications of other restaurants planning to cut hours and employees to avoid compliance with the Affordable Care Act, but Burgerville is not among them.

“That would be counterproductive,” Graves said. “We’ve benefited from having health care — we have higher caliber employees and more loyal employees. It’s been a win-win-win for us. There’s no question it costs.”

Collectively, restaurants are continuing to hire in the face of the uncertainty surrounding health reform requirements. The number of restaurant jobs in Oregon rose 5 percent year over year, from 128,600 in June 2012 to 135,600 last month, according to the National Restaurant Association. That’s in keeping with national trends as well.

There are exceptions. Fatburger fast-food restaurants has already started cutting worker hours below the 30-hour threshold, CEO Andy Wiederhorn told CNN. Some Fatburger franchisees have teamed up to share a higher number of employees all working fewer hours to duck the rules, according to CNN.

John Hamilton, vice president of marketing and communications for the Oregon Restaurant & Lodging Association, said he gets calls from members every day about health care requirements. But since the ACA hasn’t yet hit, the impact may not be felt for some time.

“Some don’t have a full grasp of what’s going on,” he said. Some are wondering what to do if they offer a group plan and not all qualifying employees take it and how much they’ll be penalized. One member said their expenses would triple if they offer health plans and they’re trying to figure out how to stay in business.

“Some are straddling the line. How does it pencil out? Can they afford it?” Hamilton said. “Only so much can be absorbed by the employer.”

Burgerville has long had a relatively generous health plan. The Wall Street Journal published a story about it back in 2009, when the health benefits were even available to hourly employees working 20 hours a week. The company bumped that up to 25 hours a few years ago because it found some on the plan “didn’t have to work very hard to be there,” Graves said.

Of Burgerville’s 1,300 employees, 580 are on the plan. The remainder either work too few hours or they choose not to partake because they’re on someone else’s plan, such as a spouse or parent. Burgerville pays 90-95 percent of the premium for hourly workers and 80 percent for salaried employees.

Graves said Burgerville’s turnover is a third less than the industry average of every six months to a year. He said it’s not uncommon for Burgerville employees to hit the 15-year mark, when they receive a “nice watch.” It will be adding 50 more workers when it opens a store at the Portland International Airport.

Has Burgerville raised its prices to pay for these benefits?

“We actually don’t look at menu pricing at all,” Graves said “It’s taken from our bottom line profit and from marketing. We don’t advertise a lot.”