Reportedly, Schnatter told shareholders during a conference call that President Obama’s Affordable Care Act, assuming it rolls out as planned in 2014, will cost Papa John’s “11 to 14 cents per pizza, or 15 to 20 cents per order from a corporate basis.
“We will find tactics to shallow out any Obamacare costs and core strategies to pass that cost onto consumers in order to protect our shareholders’ best interests,” he added.
Without getting into a debate about the Affordable Care Act or the intent of Schnatter’s comments, the story did get me thinking about food service industry health benefits in general. Has anyone in the industry figured it out? Many of the nation’s most popular food chains are often criticized for offering less-than-stellar coverage.
Well, it turns out you don’t need to look beyond our own backyard to find a company doing it right.
Since 2006, Burgerville has offered its employees a robust healthcare package that includes full medical, dental and vision coverage. To qualify for the plan, employees must work at least 25 hours a week and pay a $30 premium.
“Our conversation (that led to offering affordable healthcare) was really around what is the next evolution of our mission, ‘serve with love?’ How does that impact our employees? What is it that we could be doing for our employees that we currently aren’t?” explained Jack Graves, chief cultural officer at Burgerville.
“We always look at our mission,” he added. “We might have to make some other eventual sacrifices, or others might have to make sacrifices – maybe those who are working at a different level in our company… All I know is that we work very hard with our partners (Regence BlueCross BlueShield) to make it work.”
Prior to the implementation of Burgerville’s current health benefits plan, executives at the Vancouver-based company discovered that the idea of affordable healthcare was so foreign to their employees that many had trouble understanding the concept – a fact that became clear when the company surveyed its employees with benefits options in 2005.
“We had healthcare on the list, childcare, 401K and other benefits that could have been looked at,” recalled Graves. “Our full expectation was that healthcare would show up on the top of the list. And when it didn’t, we were quite surprised. Childcare showed up at the top of the list. So we went back and said, ‘Why not healthcare?’ Well, because nobody could actually perceive it being affordable. They had no concept that even if we offered them healthcare that it would be affordable.”
When the company went back and surveyed its employees a second time (this time clarifying that it would be affordable), Graves said the response was overwhelming.
Of course, with an ever-changing regulatory environment, a health benefits plan as hearty as Burgerville’s doesn’t come without challenges. Graves said the company’s costs have gone up roughly 75 percent from where they were six years ago. Additionally, when the plan was originally rolled out, employees’ premium was half of what it is now (it was originally just $15).
Despite the challenges, Graves said the positive effects of Burgerville’s benefits package have easily outweighed the negative.
“The first year we initiated it, our turnover went from 128 percent to 55 percent instantly,” he noted. “Just calculating the cost of recruiting, hiring, uniforms, training – all those things – we easily paid for the program.
“We’ve got many more long-term employees that are happy employees,” Graves added. “They’re glad to be there, the guests see the same faces when they go into the restaurants, they see a stable work environment and they appreciate that we take care of the person that greets them with a warm smile. It just changes everything. Our people’s self esteem changes. There are so many pluses; it just fits with everything else that we do.”
Looking ahead to the impending Affordable Care Act, Graves said Burgerville is still working to interpret its potential impact.
“Initially, it looks like we have a plan where it will make sense for us to carry on as we are, versus abandoning it and paying the fees to send people out to get their own,” he said.
As for what other companies in the food service industry might do, Graves could only guess.
“Until they really look at what’s important to them and can see the advantage as we’ve done, I don’t know what choices others will make,” he said. “I think they’ll mostly be financial. We happen to see there’s a real strong bottom line on the people-side as well. And that works for us.”
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