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 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. McDonald’s says the new health law threatens coverage for many workers.
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% to 85% of its premium revenue on medical care.
McDonald’s and trade groups say the percentage, called a medical loss ratio, is unrealistic for mini-med plans because of high administrative costs owing to frequent worker turnover, combined with relatively low spending on claims.McDonald’s move is the latest indication of possible unintended consequences from the health overhaul. Federal officials say there’s no guarantee they can grant mini-med carriers a waiver. They say the answer may not come by November, when many employers require employees to sign up for the coming year’s benefits.
New laws and unintended consequences will force employers to drop coverage forcing US employees toward eventual nightmare single payer plan. McDonalds pushes the MiniMac while the Feds are requiring a Big Mac Health Care Plan down the throat of employees.