Archive for October 30th, 2010

McDonalds to Compare Health Insurance Waivers

Saturday, October 30th, 2010

McDonalds and other retailers hope that the U.S. Department of Health and Human Services will grant them a waiver to continue offering the same “mini-med” insurance plans.  The plans do not comply with the new health care reform law, but President Obama has stated that his administration is working with McDonalds and other companies so that their employees are not negatively impacted.  “Mini-med” plans offer limited benefits to hourly workers, of which McDonalds employs over 30,000.  It’s affordable for both the employee and the company and offers employees prescription drug coverage, preventative care, and both inpatient and outpatient care.  Compare health insurance costs and McDonalds and other retailers pay far less in administrative costs when they offer “mini-med” plans.

The stipulation in the health care reform bill stating that 85% of the premium costs that companies collect must go directly to paying medical costs rather than administrative costs is the problem for McDonalds.  Because of their high turnover and fairly low payouts of claims relative to other costs, they spend more than 15% of collected premiums on administrative costs.  The “mini-med” plans offered by McDonalds also have annual and yearly benefit caps on coverage which could be eliminated in the new health care reform.  McDonalds is looking for other health insurance options, possibly from Assurant Health or another insurer, in case they are not able to get a waiver from the government.  Obviously having McDonalds’ hourly employees lose their group health insurance is not a side effect of the reform that the government anticipated, so hopefully something can get worked out soon.