McDonald’s: Wall Street Journal Report is All Wrong
The Wall Street Journal sent shudders though McDonald’s yesterday when they reported that McDonald’s was threatening to drop health care coverage for hourly workers.
Today, McDonald’s responded by saying the Wall Street Journal got it all wrong.
“Media reports stating that we plan to drop health care coverage for our employees are completely false,” said McDonald’s in a statement. “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.”
Steve Russell, senior vice president and chief people officer of McDonald’s USA, said:
“The Wall Street Journal reported the McDonald’s supposed threat based on a leaked memo. The (memo) allegedly said McDonald’s would do away with its limited-benefit coverage, commonly known in business as “mini-med plans.”
A McDonald’s spokeswoman said the company:
“Could neither confirm nor deny any information that was reported in the Wall Street Journal article, as that information was obtained through leaked documents or unauthorized means.”
Restaurant News summarized the issues…
“The article said McDonald’s would seek a waiver for its provider of health benefits from a regulation in the Patient Protection and Affordable Care Act regarding mini-med plans. That requirement states that providers of such plans must spend 80 percent to 85 percent of revenues derived from premiums on actual medical care, rather than administrative salaries or marketing, in 2011.”
According to the Wall Street Journal, the memo said such a high percentage, known in insurance parlance as “medical-loss ratio,” or MLR, would be an onerous requirement for McDonald’s insurer to meet, given the high administrative costs for mini-med plans due to the high turnover of industries that typically adopt such coverage, like restaurants.
Photo: Tony the Misfit
