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McDonald’s Denies Plan to Drop Health Care Coverage

McDonald’s Denies Plan to Drop Health Care Coverage

McDonald’s is on the defense again, this time over health care coverage for hourly workers.

A Wall Street Journal article said that McDonald’s Corporation warned it could drop its health insurance plan for hourly workers unless regulators waive a new requirement of the Affordable Care Act.

McDonald’s currently offers mini-med plans for hourly workers. Under these plans, workers pay $14 per week for a plan that caps benefits at $2,000 a year, or a plan costing $32 a week for a $10,000 annual cap.

The medical-loss ratio of the Affordable Care Act requires 80 to 85 percent of premium dollars to be spent on medical care. Some opponents of health care reform claim this is unrealistic because of the high administrative costs involved in this type of plan.

From the WSJ article:

“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.”

Steve Russell, Senior Vice President and Chief People Officer, McDonald’s USA, posted the following statement in response to a WSJ article:

“Media reports stating that we plan to drop health care coverage for our employees are completely false. These reports are purely speculative and misleading.

McDonald’s and our franchisees have been a leader in offering a fully insured limited benefit plan to hourly restaurant employees for more than 10 years. Regardless of how the regulations evolve over the next several months, McDonald’s is committed to providing competitive pay and benefits, and the strongest employment opportunities possible.

We strongly believe that we offer one of the highest quality limited benefit plans available, including a customized medical plan providing outpatient, inpatient, preventive care, and prescription drug coverage. As we’ve continued to enhance our plan and better educate restaurant employees about the benefits we offer, we’ve seen unprecedented interest and participation. Today, the majority of our franchisees offer the limited benefit plan and nearly 30,000 employees are enrolled in the medical coverage. This participation has more than doubled since 2005.

We’ve had the opportunity to speak with regulatory agencies directly to better understand the implications of the law and to share our point of view. Moving forward, we will continue to have an open dialogue with legislators as well as regulators.”

UPDATE: 10/1/2010
Business Week reports that Senator Jay Rockefeller (D-WV) opened a probe into the limited benefit mini-med plans that McDonald’s Corp. offers employees, questioning the value versus cost to employees.

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7:43AM PDT on Oct 12, 2010

Interesting. Thanks

5:39PM PDT on Oct 9, 2010

Very interesting article. Thanks for posting!

10:06AM PDT on Oct 7, 2010

i wouldn`t put it past them

3:35AM PDT on Oct 7, 2010

No wonder employers would want out, when they have to pay inflated prices for pharmaceuticals when there are cheaper natural supplements available to do the same thing.
Example: Rx Niaspan (for cholesterol control) can cost 10 or 20 times more than the natural vitamin it was copied from - Vitamin B-3, niacin, which also controls cholesterol. Vitamins are safe if you stay within the recommended limits. Most pharmaceuticals, in addition to excess cost, have serious side effects.
Whatever happened to CHOICE? Big Pharma and their pals at FDA are responsible to a major degree for the huge deficit and unnecessary taxpayer burden.

3:18AM PDT on Oct 6, 2010

thanks for the article

11:39PM PDT on Oct 5, 2010

I pray that it is true.

8:37PM PDT on Oct 4, 2010

Thanks for the article

8:23PM PDT on Oct 4, 2010


3:54PM PDT on Oct 4, 2010

Can anyone explain why McDonald's will get an exemption? How does our political system work? The squeaky wheel gets the grease?

I thought that part of the point of the health insurance bill was to ensure that people got real coverage. While McDonald's mini-med program is better than nothing, it certainly doesn't come anywhere close to what the bill calls for.

9:03PM PDT on Oct 3, 2010


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