Will McDonald's End Health Coverage for 30,000 Workers?

(Updated, 9:15 a.m.) McDonald's (MCD) warned federal officials that it may terminate health care benefits for 30,000 workers, according to a story in The Wall Street Journal.

The concern of the huge fast food chain and other employers of low-paid workers is that they will be overwhelmed by the costs of new regulations. McDonald's offers a limited "mini-med" plan to hourly workers, but as a result of the health overhaul, it must spend a larger amount of its premium revenue on medical care.

The company says the costs of administering the health plans are too high -- due to worker turnover and low spending on claims -- to accommodate the mandated increases. The Journal reports that "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."

Both McDonald's and the government took issue with the characterization by the Journal. McDonald's doesn't plan to drop health care coverage for employees, said Danya Proud, a spokeswoman for the Oak Brook, Illinois-based company, in an interview Wednesday, according to Bloomberg. "We're not going to walk away from health-care insurance completely, but we're going to have to look for alternatives if we can't get the resolution we're seeking from Health and Human Services," Proud said. The federal government also took issue with the Journal story. "The new law provides significant flexibility to maintain coverage for workers." U.S. Health and Human Services spokesperson Jessica Santillo said in an emailed message. "Guidance on the new medical loss ratio rules has not even been issued," Santillo wrote.

But, according to the Journal's report, McDonald's said in documents given to the government that many of its workers would be left without some critical health care benefits unless the fast food retailer is granted an exemption from the new regulations. "Steven Larsen, the HHS official who received McDonald's email memo, said the department doesn't want employers to drop coverage over the law. The agency says it has already given the carrier for McDonald's and others the chance to seek exemption from new annual limits on benefit payouts," the Journal reported.

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brownnorw

McDonald is the most profitable Fast-Food Restaurant in the World, and to contemplate dropping the Health Insurance Benefits for 30,000 employees is atrocious. WHY? 80% of the employees at McDonalds are young, healthy, individuals who would rarely require Medical attention or Hospitalization. These are young Adults from 17-25, who receive only $1,000 to $2,000 maximum coverage Annually. It is just another ploy to escape Corporate responsibility to its Workers. These benefits are, currently, only available to full-time workers, and the same 80% work less than 30 hours per week! They are only Part-Time Workers who received no Benefits at all!

October 05 2010 at 7:45 PM Report abuse rate up rate down Reply
Huggy

I think Mr.Obama should come to Detroit (the new Hollywood)and make a movie to help pay for this Obamacare. Jungle boy from Kenya runs for Number 1 Position in America. (Sorta a rags to riches story)

October 03 2010 at 11:04 PM Report abuse +1 rate up rate down Reply
1 reply to Huggy's comment
brownnorw

That is exaltly where we are headed....From Riches to Rags....when one cannot live off $250,000 a year, and MILLIONAIRES are collecting unemployment!

October 05 2010 at 8:37 PM Report abuse rate up rate down Reply
TANIA

What a MORON THIS president is!!!! Instead of have made AN EFFORT TO CREAT JOBS, HE DID THE OPPOSITE! People in this country are hurt for money and the president is going to make us all to pay this BS he calls "HEALTH CARE" THAT YOU WILL JUST BE ALLOWED TO USE IN 2016! This is just more TAXES TO BANKRUPT US AND THE COUNTRY! OBAMA spent one whole year fighting against the MAJORITY of american people to get this health plan passed! WAY TO GO PRESIDENT!

October 03 2010 at 6:27 PM Report abuse +3 rate up rate down Reply
1 reply to TANIA's comment
brownnorw

TANIA,You look like the biggest MORON, because you don't know the Facts. DONT YOU READ!

October 05 2010 at 7:49 PM Report abuse rate up rate down Reply
Marcie

This is such a crock. McDonalds is crying poor mouth. "Oh, we have to do something that actually benefits our employees??? Waaa waaaaa. We can't afford it!" The truth is, it cuts into their obscene profits. Which is why big biz was against healthcare reform to begin with. Now they are making up lies to try to get people against the changes. Everytime something costs a big corporation money, they just raise the cost of their products, or they find another way to screw the employees. Welcome to unregulated capitalism in America.

October 03 2010 at 3:15 PM Report abuse -2 rate up rate down Reply
1 reply to Marcie's comment
brownnorw

You are a READ person. I agree 100%. Where are all the Genius CEOs who formulate corporate profits. Go back to the Drawing Board, and this time,while counting your profits, you might to look at your Balance Sheets and Reserves! Wendy's smells very good right now!

October 05 2010 at 7:57 PM Report abuse rate up rate down Reply
pbihomes

Insanity is expecting our goverment to do something right. I'm going to start laying off some of my workers and cutting the salary and benefits for the others and raising my prices so my income does not go down when all of the new rules go into effect. If I can figure out which employees voted for Obama they go first.

October 03 2010 at 11:35 AM Report abuse +2 rate up rate down Reply
3 replies to pbihomes's comment
tjb

Too bad the chickens in Washington did not go further and provide the public option.

October 03 2010 at 11:29 AM Report abuse +6 rate up rate down Reply
2 replies to tjb's comment
rhwins1060

Full agree. Was it the health insurers who drew the line in the sand? I think the army and navy should operate clinics for anyone wo wants to come, for treatment- they are already there and somewhat organized. The armed forces could train para medical specialists like physician assistants, nurses and technicians with a 6 year (or more) enlistment requirement, and we would have a work force to help the rest of the public when they move on.

October 03 2010 at 10:28 PM Report abuse +3 rate up rate down Reply
brownnorw

It made to much SENSE to vote for the Public OPtion, So FOOLS rushed in and canceled it!

October 05 2010 at 8:04 PM Report abuse rate up rate down Reply
Joseph

With the enormous profits Mc Donalds makes, They could be self insuring.

October 03 2010 at 10:42 AM Report abuse +5 rate up rate down Reply
1 reply to Joseph's comment
brownnorw

FOR SURE!!!!!!!!!!!!!!!

October 05 2010 at 8:11 PM Report abuse rate up rate down Reply
crblionheart

MMMMMMM ! Obama health plan is not working. What a lier.

October 03 2010 at 8:04 AM Report abuse +6 rate up rate down Reply
3 replies to crblionheart's comment
Jeff

On Fox a couple of weeks ago, they said White Castle stated they'll have to pay 40% of what they make on health care for their employess, and another chain said they'll have to pay out more for health care then what they take in. McDonalds probably won't be the first to drop health care for their employees, they'll find a way around it. Like individuals mandatorily buying it, just pay the fine, and you'll get it anyway. I can't imagine how high taxes are going to go to keep this thing afloat.

October 03 2010 at 2:35 AM Report abuse +4 rate up rate down Reply
2 replies to Jeff's comment
rhwins1060

Maybe if the employees didn't eat the unhealthy food McDonalds served, they would not need as much health care.

October 03 2010 at 10:31 PM Report abuse +1 rate up rate down Reply
brownnorw

MEDICAID would be the alternative, whereby, each individual STATE will foot the Bill.

October 05 2010 at 8:16 PM Report abuse rate up rate down Reply
Heidiho

McDonald's is full of McCrap! They are one of the few companies that has continued to make huge profits even though the world has been in financial ruins. They are not concerned about their employees and do the bare minimum to take care of them. They have a high turnover rate with employees because no one can get ahead working for them. They are the B. P. of fast food as far as I am concerned. The only good thing they have going for them is Ronald McDonald house and that is a non profit tax exempt program. Profit is their main concern and they have pleanty of it. They should not get special permission to McScrew their employees.

October 02 2010 at 11:50 PM Report abuse +7 rate up rate down Reply
2 replies to Heidiho's comment
justgeoff

perhaps the high turnover has more to do witth the quality of workers? After all, just how much is an eigth grade drop out that can't spell CAT if you spot them the "C" and the "T" worth?

October 03 2010 at 10:51 AM Report abuse +5 rate up rate down Reply
brownnorw

lol!!!!!!!!!!!!!!!!

October 05 2010 at 8:18 PM Report abuse rate up rate down Reply