It has been suggested on more than one occasion that U.S. consumers do not truly understand their healthcare benefits. But a recent incident involving a TikTok user suggests the ignorance may be deeper than anyone originally thought. It would appear that the average consumer doesn’t even understand how employers cover their portion of their employee health plans.
The incident in question involved a restaurant bill. Included on the bill was a line item covering ‘staff benefits’. Upon inquiry, the customer discovered that staff benefits are essentially employee healthcare benefits.
Outrage Over the Charges
No doubt that seeing ‘staff benefits’ on the bill surprised the customer. The server’s explanation of what those benefits are was probably a surprise as well. But learning that the restaurant passes healthcare costs along to customers sparked an unusual amount of outrage that demonstrates just how ignorant people are.
Not only was the customer outraged, so were multiple TikTok users who read the customer’s post. One commenter specifically said they would not have paid the supposedly extra charge. It is as though the restaurant was expected to absorb the cost of providing employee health benefits without passing the expense along.
Unfortunately, that’s not how business works. Whether or not an employer decides to reveal who pays for health benefits, it is always the customer in the end.
Pricing Must Cover Costs
Let us take this particular incident and set it aside for just one minute. Every business on the planet has expenses. Companies spend money to make their products or offer their services. Where does that money come from? It comes from customers.
Businesses price their products and services based on a combination of their costs and profit target. If it costs a company $50 to manufacture, market, and distribute a product, they will charge at least that much at retail. In all likelihood, they will charge more so that they can make a profit.
Getting back to the restaurant, they do the same thing. They roll all their costs and profit into their pricing. And guess what? Employee health plans are one of the expenses restaurants need to cover. It is one of their costs.
Choosing a Lower-Cost Alternative
Whether customers know it or not, their purchases pay for the health benefits of all the employees who provide the products and services they buy. That includes the customers who purchase from your employer. Your employer rolls the cost of providing health benefits into its final pricing structure. A portion of every dollar spent on your company’s products or services goes toward covering your health plan.
Companies that want to keep their retail pricing as low as possible can employ a number of strategies for doing so. One of them is to choose a low-cost alternative to traditional health insurance. That is what we specialize in here at StarMed. Our low-cost plans are self-funded plans designed to offer minimum essential coverage at a more affordable price.
We’re Paying One Way or Another
Wrapping all of this up is as simple as saying the only mistake the restaurant made was putting that line item on the bill. Perhaps ownership thought customers might like to know how much of their total bill goes to covering healthcare expenses. Who knows? At any rate, diners are still paying the bill.
One way or another, we all are. Employer-sponsored health plans cost employers money. Those costs are passed on to customers through retail pricing. It is how business works. It’s how business has always worked. It is too bad that so many people don’t understand such a basic and fundamental principle.
