US fast food giant McDonald’s may drop its health insurance plan for nearly 30,000 hourly restaurant workers unless regulators waive a new requirement, The Wall Street Journal reported late Wednesday.
The report posted on the Journal’s website said the move suggests that new rules in US health care legislation may disrupt workers’ health plans. McDonald’s and a number of other employers of low-wage employers may halt coverage if the government does not loosen a requirement for bare-bones medical plans, it added.
Under legislation passed earlier this year to overhaul the beleaguered US health care system, insurance plans are required to spend at least 80 to 85 percent of the premiums on benefits. But McDonald’s and others say that these “mini-med” plans have higher administrative costs and cannot meet the requirement.
McDonald’s, which the Journal said has informed regulators that it may drop its health insurance, provides mini-med plans for workers at 10,500 US locations, most of them franchised. A single worker can pay 14 dollars a week for a plan that caps annual benefits at 2,000 dollars, or about 32 dollars a week to get coverage up to 10,000 dollars a year.
Backers of the health law wanted the requirement to prevent insurers from spending too much on executive salaries, marketing and other costs that they said do not directly help patients.
The Journal said the McDonald’s move was the latest indication of possible unintended consequences from the health overhaul, including premium increases and the fact that dozens of other employers could find themselves in the same situation as McDonald’s.
A government official told the newspaper that employers with mini-med plans may apply for a waiver to a rule that would otherwise require them to raise the cap on annual benefits to 750,000 dollars.
Washington, Sept 29, 2010 (AFP)
