UnitedHealthcare alliance targets uninsured restaurant workers

NATIONAL REPORTS-With nearly 13 million employees today and possibly 14 million by 2020, the restaurant industry is the second largest private-sector employer. It also represents a significant portion of the uninsured population-and an untapped market for health insurers.

Those restaurant businesses look especially attractive in anticipation of 2014, when the Patient Protection and Affordable Care Act (PPACA) requires that everyone carry insurance.

At any given time, some 4 million to 6 million-one out of every two to three restaurant workers-do not have health insurance, according to the National Restaurant Assn. Looking at the larger picture, that's 13% to 19% of the 32 million uninsured people PPACA is intended to help.

Its purpose is twofold, says Cheryl Randolph, a spokeswoman for UnitedHealthcare. First, the alliance will help small-business member restaurants find coverage options for their employees, including part-time workers. In some markets, UnitedHealthcare Catalyst, which combines comprehensive catastrophic plan coverage with an up-front benefit allowance for certain preventive-care services, is one of the options available. Another option is United Healthcare Edge, a small-business product that ranks specialists and hospitals into copayment tiers according to relative quality and cost efficiency.

According to Randolph, the alliance also is intended to help the industry's individuals and employees who do not have employer-sponsored coverage to choose plans. Choices include short-term insurance, health savings accounts and a high-deductible plan. Other products, including dental plans and discount health cards, will also be available.

The initial launch will begin in Colorado and Pennsylvania, with California and Texas on deck.

LAYING THE GROUNDWORK

In targeting this group of employees, UnitedHealthcare may be laying the groundwork for 2014, when PPACA:

The requirement that individuals purchase insurance "signals a significant change in the health insurance marketing and distribution model," says Ana Gupte, an analyst with Sanford C. Bernstein & Co. who follows UnitedHealthcare. "Branding to consumers will gain far more importance in this post-reform world."

Clearly targeted marketing to specific populations isn't a new strategy for UnitedHealthcare, which has already targeted seniors.

"UnitedHealthcare has done a terrific job branding their products and services in the senior market through its lucrative AARP alliance for Medicare Supplement offerings," Gupte says. "I expect the alliance with the National Restaurant Assn. is another such move to gain similar branding and distribution advantages within the under-65, small-group restaurant market where the employer and individual mandate now create a need for affordable coverage offerings."

Gupte anticipates that other insurers will also make attempts to secure and lock in such alliances in advance of 2014.

UnitedHealthcare's Randolph says that the Restaurant Health Care Alliance was not implemented specifically to capture business in advance of 2014.

She says United has implemented several PPACA provisions ahead of deadlines. In April, UnitedHealthcare ended its use of policy rescission, except in cases of fraud, ahead of the September 23 implementation date. The company also said it would immediately offer extension of existing coverage for graduating students up to age 26 on their parents' plan.

The Restaurant Health Care Alliance, she says, has been in development for two years.

"This is something that we would have done with or without reform," Randolph says. "This is a good opportunity to reach these markets, particularly the uninsured."