- Joined
- Jul 26, 2009
- Messages
- 19,024
- Reaction score
- 8
FOXNews.com - McDonald's Tells Federal Regulators Its Worker Health Plan Violates New Rule
McDonald's Warns It May Nix Hourly Employee Health Coverage, Citing New Federal Rule
Published September 29, 2010
McDonald's Corp. has warned federal regulators that it could drop its health insurance plan for nearly 30,000 hourly restaurant workers unless regulators waive a new requirement of the U.S. health overhaul, the Wall Street Journal reported.
The move is one of the clearest indications that new rules may disrupt workers' health plans as the law ripples through the real world.
Trade groups representing restaurants and retailers say low-wage employers might halt their coverage if the government doesn't loosen a requirement for "mini-med" plans, which offer limited benefits to some 1.4 million Americans. The requirement concerns the percentage of premiums that must be spent on benefits.
While many restaurants don't offer health coverage, McDonald's provides mini-med plans for workers at 10,500 U.S. locations, most of them franchised. A single worker can pay $14 a week for a plan that caps annual benefits at $2,000, or about $32 a week to get coverage up to $10,000 a year.
Last week, a senior McDonald's official informed the Department of Health and Human Services that the restaurant chain's insurer won't meet a 2011 requirement to spend at least 80 percent to 85 percent of its premium revenue on medical care.
McDonald's and trade groups say the percentage is unrealistic for mini-med plans because of high administrative costs owing to frequent worker turnover, combined with relatively low spending on claims. Democrats who drafted the health law wanted the requirement to prevent insurers from spending too much on executive salaries, marketing and other costs that they said don't directly help patients.
McDonald's move is the latest indication of possible unintended consequences from the health overhaul. Dozens of companies have taken charges against earnings—totaling more than $1 billion—over a tax change in prescription-drug benefits for retirees.
McDonald's Warns It May Nix Hourly Employee Health Coverage, Citing New Federal Rule
Published September 29, 2010
McDonald's Corp. has warned federal regulators that it could drop its health insurance plan for nearly 30,000 hourly restaurant workers unless regulators waive a new requirement of the U.S. health overhaul, the Wall Street Journal reported.
The move is one of the clearest indications that new rules may disrupt workers' health plans as the law ripples through the real world.
Trade groups representing restaurants and retailers say low-wage employers might halt their coverage if the government doesn't loosen a requirement for "mini-med" plans, which offer limited benefits to some 1.4 million Americans. The requirement concerns the percentage of premiums that must be spent on benefits.
While many restaurants don't offer health coverage, McDonald's provides mini-med plans for workers at 10,500 U.S. locations, most of them franchised. A single worker can pay $14 a week for a plan that caps annual benefits at $2,000, or about $32 a week to get coverage up to $10,000 a year.
Last week, a senior McDonald's official informed the Department of Health and Human Services that the restaurant chain's insurer won't meet a 2011 requirement to spend at least 80 percent to 85 percent of its premium revenue on medical care.
McDonald's and trade groups say the percentage is unrealistic for mini-med plans because of high administrative costs owing to frequent worker turnover, combined with relatively low spending on claims. Democrats who drafted the health law wanted the requirement to prevent insurers from spending too much on executive salaries, marketing and other costs that they said don't directly help patients.
McDonald's move is the latest indication of possible unintended consequences from the health overhaul. Dozens of companies have taken charges against earnings—totaling more than $1 billion—over a tax change in prescription-drug benefits for retirees.
Not exactly, it is obviously a concern.
...frowning...