Why Most Restaurant Workers Don’t Have Employer Coverage
The restaurant and food service industry has some of the lowest rates of employer-sponsored
health insurance of any sector. Most servers, cooks, dishwashers, bartenders, and front-of-house
staff at independent restaurants, chains, and fast-food establishments are either part-time
(not eligible for benefits) or work for employers too small to offer group health insurance
affordably. Even at larger chains, benefits are often reserved for full-time salaried managers.
This leaves millions of restaurant workers responsible for finding their own coverage —
often while juggling variable tip income, irregular hours, and budgets that leave little
room for a monthly premium.
ACA Marketplace Plans: Made for Variable Income
Restaurant workers with variable tip and hourly income are often ideal candidates for ACA
marketplace plans with subsidies. Tips and hourly wages combined typically place many restaurant
workers in subsidy-eligible income ranges. Even if tip income is irregular, the marketplace
uses your estimated annual income — and adjustments can be made mid-year if circumstances change.
Key point: all income (tips, hourly wages, and any other income) must be reported on your
federal tax return and used to determine marketplace subsidy eligibility. Under-reporting
tip income can create problems at tax time.
Medicaid for Lower-Income Restaurant Workers
In states that expanded Medicaid under the ACA, restaurant workers earning below about $21,000
per year (single person) may qualify for free Medicaid coverage. Medicaid eligibility is
based on monthly income, so workers whose hours and tips fluctuate may cycle in and out of
Medicaid eligibility. In expansion states, the following are licensed by Health Advisory LLC:
Florida, Texas, Georgia (not expanded), Virginia, Ohio, Illinois, Michigan, Indiana,
Maryland, South Carolina (not expanded), Alabama (not expanded), Colorado, Arkansas,
Nevada, Wisconsin, and Nebraska have expanded Medicaid; Kansas, Oklahoma, Utah, and
South Dakota also have expansion coverage.
Frequently Asked Questions
Do restaurants have to offer health insurance?
Under the ACA employer mandate, restaurants with 50 or more full-time equivalent employees must
offer health insurance to full-time employees or face penalties. Most restaurant workers work
part-time or for smaller employers, so this mandate does not affect them.
Can servers and bartenders get health insurance?
Yes. ACA marketplace plans are available to anyone, including tipped restaurant workers.
Subsidies are based on total income including tips. Many restaurant workers qualify for
significant subsidies or even Medicaid in expansion states.
What is the cheapest health insurance for restaurant workers?
For low-income restaurant workers, Medicaid (in expansion states) is free. For those above
the Medicaid threshold, subsidized marketplace Bronze plans can cost as little as $0/month
after subsidies in some income brackets.