Tapping Into Benefits: A Brewery Owner’s Guide to Offering Group Health Insurance in California

Running a taproom in California’s competitive market demands retaining top-tier talent. A high turnover rate can cause a lot of problems for your operation, the customer experience, and your hiring budget. Support your brewery’s longevity by offering your employees benefits that will give them more security and an incentive to invest their future with your company. Let’s discuss how to set up a group health insurance plan to create a better team.

Decoding California Small Business Health Insurance Mandates

Constantly replacing experienced staff hurts your bottom line and diminishes the quality of your customer service. Unfortunately, high turnover rates often affect front-of-house taproom staff and skilled cellar workers.  When an experienced employee leaves, they leave behind a cascading financial impact. You must spend time and money recruiting and training their replacement. Your brewery may also experience a dip in taproom sales or production efficiency as the new hire gets up to speed.  

Part of the problem is that baseline compensation levels have largely remained the same across the craft beer industry, which puts pressure on workers. Compensation stagnation contributes to a decrease in health insurance, paid time off, and other secondary benefits.  Offering comprehensive benefits can keep your best people from leaving. Consider a highly trained taproom manager who’s considering moving to a larger corporate restaurant group solely for better health benefits. Medical coverage can prevent this talent drain and keep institutional knowledge inside your brewery.  Implementing small business health insurance plans in California can position your brewery as a premier employer. It also lets your workforce know that you view their roles as sustainable, long-term careers rather than stepping-stone jobs. 

Understanding Your Options for Metallic Tiers and Plan Pricing

Before diving into plan structures and pricing, you must determine how state and federal guidelines classify your brewery.  Under the federal Affordable Care Act, applicable large employers are those with 50 or more full-time employees, which makes them subject to specific mandates. However, state-level regulations in California offer unique classifications.  A small business in the small-group health insurance market includes those with 100 or fewer eligible employees, benefiting growing businesses. This means that even if your brewery operates multiple taproom locations, you can likely still qualify to shop in the small-group market if you meet the criteria.  Part-time taproom workers factor into this count.

Full-time Equivalent (FTE): Part-time hours are added together to determine FTE status. For instance, two part-timers working 15 hours each week could be considered one FTE, a consideration you shouldn’t overlook when determining the size of your brewery. Once you know your classification, you can choose from standardized bronze, silver, gold, and platinum tiers. This system helps you forecast costs and select a baseline plan that aligns with your operational budget while adequately supporting your brewing staff. 

How to Implement Health Benefits for Your Taproom Staff

Roll out coverage that protects your team without breaking the business with these steps. 

1. Calculate Your Eligible Employees

Run a census of your payroll to determine your exact headcount and FTE status. Under California rules, you generally need at least one W-2 employee besides the owner or their spouse to qualify for small group plans. Survey your staff before finalizing anything to gauge interest.  Consider how you handle seasonal peaks, such as summer taproom surges or Oktoberfest rushes. Temporary or seasonal employees usually don’t count toward your eligible full-time roster, which simplifies your coverage obligations during periods when brewery staffing needs fluctuate.

2. Determine Your Employer Contribution Budget

Review your finances to decide how much of the monthly premium the brewery will cover. Minimum employer contributions usually start around 50% of the employee-only premium.  Run multiple cost models. For example, determine what the financial impact looks like if you cover 75% of a baseline tier versus 50% of the higher tier. Once you establish the budget, communicate the financial contribution clearly to your team. 

Transparency shows them how much the brewery is investing in their well-being.  Remember that the baseline cost you’re modeling is not fixed, as it can fluctuate due to various business and demographic variables. Factors like the brewery’s size and location, the employees’ ages, and the plans you select affect the overall costs.

3. Select Plan Tiers for Your Team

Evaluate the plans you will offer to your team. Consider the actuarial value, which is the standardized model Covered California uses to determine the rates an insurance plan pays for hospitalizations and other benefits.  The Platinum plan is the most beneficial option available. The insurance provider covers 90% of the costs, while the patient pays for the remaining 10%. In contrast, the Bronze plan only covers 60% of the expenses, leaving the rest for the recipient. So, as the brewery owner, you need to balance the monthly cost of a Platinum plan with the significantly lower cost to you of your employees’ out-of-pocket expenses.  

A health insurance broker who is certified can assist you in choosing a plan. They can negotiate rates, assist with enrollment, and explain the jargon of plans in layman’s terms for you and your team. After selecting a plan, host a “talk about a plan” session in the taproom. Provide your staff with a definite deadline to review the tiers, ask questions, and submit paperwork for coverage to go live on time.

Financial Relief for Breweries Through Tax Credits

While offering insurance is a major expense, the federal government offers financial incentives for small businesses that step up to protect their workers.  The small business health care tax credit operates on a sliding scale depending on your brewery’s size and average wages. The smaller the employer, the bigger the available credit. 

Eligible small business employers can get up to 50% of premiums paid, which means you can get significant savings if you qualify. These incentives have strict requirements. To secure credit, you must have fewer than 25 full-time equivalent employees. You must also pay average wages of less than the Internal Revenue Service-adjusted amount and contribute at least 50% toward employee-only premium costs. 

Pour a Stronger Foundation for Your Brewery’s Future

Make your employees’ well-being a priority. The right team insurance can help your team be happier, serve customers better, and foster a stronger taproom culture. It also keeps your employees on task and focused on what they’re doing and what they’re creating for guests. Look into your situation today.