Health Insurer's Alliance With Restaurant Industry Aims to Take Bite Out of Working Uninsured

A health insurer's partnership with the National Restaurant Association to sell health plans to restaurant workers represents a potentially lucrative bite into the working uninsured market in the United States.

In development for nearly two years, UnitedHealthcare and the association launched the Restaurant Health Care Alliance in May. The initiative is intended to provide restaurant owners and their employees easy access to cost-effective health plans.

Restaurants employ a large portion of the working uninsured, said Jeff Alter, chief executive officer of the Northeast region of UnitedHealthcare, a unit of UnitedHealth Group (NYSE: UNH).

Restaurants represent the second-largest private-sector employer and 4 million to 6 million of the nearly 13 million U.S. food-services industry employees are uninsured at any given time, according to UnitedHealthcare.

The association approached the company about two years ago about the opportunity, Alter said. However, a request-for-proposal process also occurred with a couple of bids from other insurers, he said.

The alliance represents a precursor to the new federal health reform law as it's trying a private solution to what reform is intended to do -- provide greater access to coverage that's affordable for Americans who are under-insured or the working uninsured, Alter said. It "dovetails nicely into reform efforts that came after our initial discussions" with the association, he said.

The partnership is long term, and UnitedHealthcare has modest goals to sign on 5,000 to 8,000 members in its health plans over the first 18 months as the initiative rolls out in the pilot states of Pennsylvania and Colorado, with plans to expand into Florida, California and Texas, Alter said.

Over the years, the company's fully insured commercial business could be impacted, but the company may get more penetration into the working uninsured from various state programs, such as Medicaid, he said.

Not directly addressed in the new law are association health plans -- a collection of health-related products, services and insurance programs available to association members, according to AmWINS Group Benefits. The association contracts with insurers to make coverage available to association members, AmWINS said.

The restaurant alliance is not an association health plan, Alter said. It will tailor health plans that are employer-sponsored but also give employees access to UnitedHealth's individual plans -- UnitedHealthOne, he said.

The plans can be small group or individually underwritten, Alter said. An employer could have some of their employees on an employer-sponsored health plan, he said. In other cases, it can be a vouchered-out individual program where the employer could contribute X amount of dollars for some or all its employees to buy the individual plan, Alter said.

Heading into the major reforms that start in 2014, the difference between public-funded, individual and employer-sponsored plans "will become blurred," Alter said. The alliance "is trying to bring access agnostic of the funding to as many of the restaurant employees as possible."

UnitedHealthcare's "Edge" and "Catalyst" health plans might receive the "earliest attraction," he said.

Edge provides lower office visit co-payments and greater plan coinsurance coverage when employees receive quality and cost-efficient care provided by physicians in its "premium-designation program." Catalyst combines comprehensive catastrophic coverage with an up-front benefit allowance for certain preventive-care services.