Tolga Sevdik, a co-owner in two Downtown restaurants -- Butcher
and the Rye and Meat & Potatoes -- now has health insurance.
But like so many restaurant workers, he went years without
coverage, even while working as a manager of a club in the Strip
It was a costly move. An appendicitis attack landed him in the
hospital. And with it came a bill more expensive than a year at a
private college that he's still paying off.
That experience is partly what prompted Mr. Sevdik and his
business partner, chef Richard DeShantz, to offer health insurance
to their employees. "I don't want the people who work for us to end
up in a similar situation," he said.
Traditionally, small to mid-sized restaurants have been selective
in whether they offer health insurance because it's expensive and
restaurant profit margins are low. Some places offer it for
management while others extend it to cooks.
Yet as more restaurants compete for staff in Pittsburgh's shallow
applicant pool, health insurance is being offered as an incentive to
stay longer, reducing the short workplace tenures and employee churn
that are part of the restaurant industry culture.
The behemoth on the horizon is the Affordable Care Act, also
known as Obamacare, with an encroaching deadline in January 2015.
While this may seem far off, it's already shaping restaurant
So while employees jockey for the position that affords them the
best salary and benefits, restaurants are scrambling to understand
how the changes will affect their bottom line.
According to the Affordable Care Act, restaurants that employ 50
or more full-time employees -- defined as 30 hours a week or more --
will be required to pay for health benefits. If they don't, they'll
have to pay a $2,000 penalty per employee after the first 30
workers. Obamacare also mandates that the premiums employers pass on
to employees can't exceed 9.5 percent of an employee's household
Mr. Sevdik and his restaurants are staying ahead of the law;
they're offering health benefits to employees who work 30 hours or
more a week once they have been employed for 90 days.
"We're trying to run like a corporate place," he said. "It's so
hard to find good employees in Pittsburgh. One way to secure them is
to make sure they're covered."
For the past year Meat & Potatoes has covered 100 percent of
management's insurance premiums and 50 percent of full-time staff
insurance premiums, which translates to $66 a month per employee.
These benefits will be extended to workers at the newly opened
Butcher and the Rye by January 2014.
Under Obamacare, employee contributions could change, although
Mr. Sevdik is not yet sure how. "It's pretty confusing," he said. "I
get emails about compliance from my insurance broker once a week."
Employers will eventually have to structure their health offerings
so that an employee's maximum "out of pocket" expense would be
capped at $6,350 for the year, or $12,700 per family.
Restaurants that haven't yet aligned with the Affordable Care Act
requirements are anticipating they'll be hit hard, particularly
local mid-sized restaurants such as those run by Brian Pekarcik,
chef and partner of Spoon as well as BRGR in East Liberty and
Cranberry and Grit & Grace to open next month Downtown. …