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IndustryWire: Two Clarifies Health Care Surcharge

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Last week, after Delfina's $1.25 health care surcharge was brought to light by the BauerBlog, Hawthorne Lane denizen Two Restaurant also came under some scrutiny when it was discovered to be tacking on a similar charge to its diners' bills. The rub, of course, wasn't the charge itself, but the fact that Two had already provided health care to its employees prior to the Healthy San Francisco mandate, thus giving the impression that the new charge was a bit opportunistic.

Owner David Gingrass recently sent an email to explain the happenings over in SoMa (his full letter is after the hop). The short version is that yes, he offered insurance to all full-time employees prior to the mandate, and now he is using the $1.25 surcharge to provide a private, better insurance plan to all workers (the mandate says only full-time employees must be insured). In other words, he's going above and beyond the minimum city requirements, with the help of the $1.25 per diner boon, which should please his employees and supporters of health care, but might further annoy those diners opposed to the new surcharges popping up around town. His words follow:

From David Gingrass, owner of TWO:

TWO, and Hawthorne Lane previously, has offered PPO insurance to all employees who work more than 30 hours per week since we opened more than 12 years ago. I fund the entire premium for management staff and their families. Eligible hourly staff who choose to participate pay 50% and I pay 50%. This sort of insurance is expensive and affords our team much more extensive coverage than HMO insurance. My half of an individual employee's PPO premium exceeds the $1.14 per hour requirement by 30%. Nevertheless, not all employees choose to participate because of the cost.

The $1.25 per person cover charge at TWO (and a growing number of other SF restaurants) was calculated to cover the difference between the expense to my business pre and post Healthy SF. I anticipate the actual cost being closer to $1.31 per cover, but I wanted a round number.

Using the proceeds from our cover charges, we now offer a second insurance plan, an HMO plan, which costs me just slightly more than the $1.14 per hour. All of my previously un-insured employees, primarily cooks and dishwashers, will now be able to receive basic health care at my expense. Like the SF minimum wage law, the healthcare legislation was carelessly crafted and does not really do exactly what it set out to. The downside for my employees is that we will now need to replace our part-time employees with a smaller number of full time employees.

· FW: $1.25 service charge added to restaurant bill [~ESF~]
· Adding a surcharge for health care [BauerBlog]

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