What nonprofit, hospitality, and retail employees want from their health insurance

Group health insurance was designed for a workforce that shows up full time, at one location, on a schedule that holds steady from quarter to quarter. Nonprofits, restaurants, hotels, and retailers rarely staff that way. Nonprofits recruit against corporate salaries they cannot match and use benefits to close the difference. Hospitality and retail employers build schedules around seasonal demand and variable hours, which leaves a portion of their staff below the eligibility threshold for the company plan.

Take Command's 2026 State of Employee Health Benefits Survey asked 1,000 employees across ten industries how they feel about their coverage. Employees in these three fields reported the widest gaps between what their benefits cost them and what those benefits give them control over.

• Nonprofit and social services: only 14% believe they have plenty of choice in their coverage

• Hospitality and tourism: 45% have already left the group model and buy their own insurance

• Retail: 57% would rather take employer money and choose a plan themselves

This is blog six of six in our series. Read the first five installments here:

1. The future of health benefits is choice

2. New data shows employees are at their health insurance breaking point

3. Group insurance is costing you more than you think

4. The tables have turned: HRAs are replacing group plans as a health insurance option

5. A health insurance alternative that actually works (for employers and employees)

Talk to an expert

Download key survey findings

How nonprofit, hospitality, and retail health insurance compare

Concern about 2027 costs runs above the 78% survey average in two of the three industries:

• Hospitality and tourism: 81% somewhat or very worried

• Nonprofit and social services: 80%

• Retail: 77%

From there the three diverge, and the differences shape what each employer should do about it.

• Nonprofit employees are concentrated on group plans and report the lowest satisfaction figures of the three

• Hospitality employees have already shifted to the individual market in large numbers

• Retail employees sit between the two, with a significant share whose weekly hours determine whether they qualify for coverage at all

Nonprofit health insurance does the recruiting that salaries cannot

Nonprofit employers use benefits to compete for people they cannot outbid on pay, and our survey shows the approach works:

• 96% said health benefits were somewhat or extremely important when deciding whether to stay at or leave a job

• 58% said they would turn down a new position over a weak benefits package

• The coverage itself is landing differently:

• Only 18% describe themselves as very satisfied with their company's health benefits

• 15% are somewhat or very dissatisfied

• Just 14% believe they have plenty of choice when selecting a plan

• 47% said employees rather than employers should be making health insurance decisions

One number moves against that trend. When asked whether they would prefer employer money to choose their own plan, 37% of nonprofit employees said yes, which trails the 49% survey average by twelve points. Employees who have only ever been enrolled in a group plan have no reference point for what an individual plan would cost them or which doctors it would cover, and that uncertainty shows up in the response. It reads as a gap in information rather than a gap in interest, since the same group asked for more control in the question directly before it.

The pattern here is worth separating out. Nonprofit employees are not asking for a bigger benefit, and they are not telling us the employer got the strategy wrong. They are telling us that a plan chosen for them by someone else does not cover what they need it to cover. A nonprofit that adds an allowance and opens up the individual market answers that complaint without increasing what it spends per employee.

Read more about HRAs for nonprofits

Hospitality health insurance has already moved to the individual market

Hospitality and tourism produced the largest demographic split in our survey. Among these employees, 45% buy health insurance on the individual market, compared with 22.4% across all industries. The respondent pool divided almost evenly, with 55 on a group plan and 45 covered individually.

Part-time and seasonal scheduling explains most of that. Employees who do not hold steady full-time hours are frequently ineligible for the company plan, which makes the individual market their only route to coverage. The survey suggests it serves them reasonably well:

• 86.7% said their plan allows them to visit the medical providers who matter to them

• 36% of those with individual insurance are very satisfied with the quality of their care, compared with 29% on group plans

• 51% said employees should control their own health insurance choices

• 45% would prefer employer funding to select a plan

An HRA maps onto this staffing model directly. Employers can define employee classes, including full-time and part-time, and set a different allowance amount for each. A seasonal server and a year-round front desk manager can both receive a contribution scaled to their role. Employees who already hold individual coverage keep the plan and the doctors they have, and the employer contribution reduces what comes out of their paycheck for it.

Read more about HRAs for restaurants

Retail health insurance leaves part-time workers behind

Retail employees gave the strongest endorsement of employee control anywhere in the survey:

• 57% said employees should be choosing their own health insurance

• 57% would prefer their employer hand them money to select a plan, well above the 49% average across all industries

• 77% are somewhat or very worried about costs rising in 2027

The choice gap is visible inside the industry as well. Among retail employees with individual insurance, 41% said they have plenty of choice when selecting coverage, compared with 27% of retail employees on group plans.

The eligibility issue drives much of this. Employees who do not consistently work more than 30 hours a week often fall outside group plan eligibility, which means no employer contribution toward their coverage at all. Seasonal hiring and turnover compound the problem, because the same employee can qualify one quarter and not the next.

Roughly 9% of all survey respondents currently have an HRA, and their answers point somewhere different:

• All but one said their insurance allows them to see the medical providers who matter to them

• 55.6% said their employer covers the full amount of their premium

An HRA lets a retail employer contribute toward coverage for everyone on payroll, on terms the business sets, whether that person manages a district or works twenty hours a week on the floor.

Read more about HRAs for retail owners

What the cost data shows across all three industries

The industry findings track with the broader survey results:

• Median out-of-pocket spend for 2025 was $751 for employees with individual insurance, compared with $1,200 for employees on group plans

• Heading into 2026, costs rose for 76% of group plan employees and 67.6% of individual-market employees

• More individual-market employees held flat, with 30% reporting no change compared with 23% on group plans

Employers are seeing the same results from the other side of the table. According to the HRA Council's 2025 data report:¹

• Large employer ICHRA adoption climbed 34% year over year

• 83% of small businesses used an HRA to offer health benefits for the first time

• Dependent enrollment in HRAs rose 37%

The employer-side benefit is a contribution amount set before the plan year starts. One high-cost claim in a small risk pool can drive a double-digit renewal increase for a nonprofit or a regional restaurant group no matter how the year was managed. A defined contribution takes that outcome off the table, because the insurer is no longer the one deciding what the company spends.

Why health insurance education determines whether the benefit works

Survey respondents across industries described three specific difficulties:

• Selecting a plan without help

• Confirming whether a doctor is in network

• Estimating what a given plan would actually cost them over a year

Those are solvable problems, and they explain why a nonprofit workforce asking for more control still hesitates when offered it. Take Command pairs every HRA with an in-house support team that walks employees through their options, checks plans against their current doctors and prescriptions, and handles enrollment. For a nonprofit running a two-person HR function, or a retail chain managing turnover across dozens of locations, that support replaces work the employer would otherwise absorb.

What nonprofit, hospitality, and retail employers should do next

These three industries hire differently and budget differently, and the survey points all of them in the same direction:

• Employees rate health benefits as central to whether they stay

• Majorities or near-majorities want a say in the plan they end up with

• The employees who already choose their own coverage report lower out-of-pocket costs, better provider access, and higher satisfaction with the care they receive

Nonprofits, restaurants, hotels, and retailers have spent years adapting a full-time, single-location insurance model to workforces that do not look like that. A defined contribution removes the adaptation. The employer decides what it spends, and each employee picks the plan that covers their own doctors and prescriptions.

Ready to see what an HRA could do for your team? Talk to a Take Command expert and we will show you how.

References

1. HRA Council, 2025 HRA Council Data Report. https://www.hracouncil.org/report