McDonald’s May Drop Health Plan

Nearly 30,000 hourly workers at McDonald’s could see their health plans dropped.

McDonald’s Corp. is seeking approval from federal regulators to waive a requirement in the health care law.  The company told regulators it cannot meet the 2011 requirement to spend a minimum of 80% of its premium revenue on medical care.  From WSJ:

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.

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.

This is just the latest news about the ripple effects that the health care law is having across America.  Nancy Pelosi wanted to pass the bill so we can find out what is in the bill.  As idiotic as that statement was, the bill is quickly becoming the nightmare most Americans perceived it to be.