Will Mc Donald’s Cut Back on Health Insurance for its 30,000 Hourly Workers?

Added by David Sandercock on September 30, 2010

A new legislation in healthcare, supported by President Barack Obama, would supposedly restrict funds for usage in marketing activities, managerial salaries, and non-medical purposes.

The Wall Street Journal reported that in response to this new rule, McDonald’s Corp might cut back on insurance coverage for their 30,000 hourly employees.

This consequence is not desired by the U.S. Department of Health and Human Services. However, according to Reuters, Mc Donald’s has claimed the Wall Street Journal report to be “completely false”.

Mc Donald’s is not in favor of the new provision in the law that 80 per cent of revenue needs to be spent on medical care in the “mini-med” insurance plans.

Supposedly, in a company memo, as revealed by the Wall Street Journal, Mc Donald’s has stated that it would not be economically feasible to continue coverage of hourly employees unless the minimum of 80 percent requirement is waived. However Federal regulators could not guarantee a waiver.

Reuters quoted Jessica Santillo, spokeswoman of the U.S. Department of Health and Human Services, as stating that “This story is wrong. The new law provides significant flexibility to maintain coverage for workers”.

Mc Donald’s maintained that they are committed to provide adequate health benefits and insurance protection to all its employees.

They called the report misleading, and said that they are in conversation with the regulatory authorities to understand implications of the new law better and share their opinion as well.