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.

Americans who were worried about the recent health care reform bill eliminating Cobra coverage can rest assured that will not happen, according to The New York Times article “Health Law Preserves Cobra Plan” by Walecia Konrad.  The government-mandated Cobra program is meant to bridge insurance you have lost with new insurance coverage.  Compare health insurance under Cobra and it basically continues insurance coverage from a job you were either laid off from or left to find another job.  Cobra lasts for 18 months and you have to pay the premiums your old employer was paying for you as well as what you were previously paying in most cases.  The health care reform bill that just passed basically makes no changes to Cobra, but for people that couldn’t afford Cobra or had yet to find another job after the 18 month coverage expired, some other aspects of the new law should help them.

A government subsidy covering 65% of laid-off workers’ Cobra coverage  expired at the end of March which puts many unemployed families in a predicament where they will go from paying around $385/month to $1,100/month for their coverage.  For families like that who may no longer be able to afford Cobra coverage and those whose Cobra has expired, they have to look into the independent insurance market at companies like Assurant Health for coverage.  Anyone who was previously insured under Cobra cannot be denied coverage by individual insurance companies based on a preexisting condition, so make sure to shop around well before your 18 months expires to find health coverage.  Some other options to look into if you are uninsured are getting onto your parents insurance up to age 26 and obtaining coverage under the new state run high-risk insurance pools.  But even without a subsidy, Cobra may be the best way to continue your previous insurance after a job loss.