Benefits

McDonalds Health Coverage Draws Capitol Hill Attention

By Staff Report

Oct. 4, 2010

A leading U.S. senator plans to grill McDonald’s Corp. and its health insurance provider over coverage of nearly 30,000 restaurant workers.


Sen. Jay Rockefeller, D-West Virginia, who is chairman of the Senate Commerce, Science and Transportation Committee, sent a letter Oct. 1 to BCS Financial Corp., the fast-food chain’s health insurer, asking for detailed information about plans offered to hourly workers.


The Capitol Hill inquiry is heating up after reports this week that the new health reform law might prompt Oakbrook Terrace, Illinois-based BCS Financial to drop the plan because it doesn’t meet the new requirement that at least 80 percent of premiums are paid back in benefits.


A story in the Wall Street Journal—which the Oak Brook, Illinois-based chain called “completely false”—said McDonald’s might drop the plan unless it could get the rule waived, and federal regulators quickly said that Department of Health and Human Services Secretary Kathleen Sebelius would “exercise her discretion” in enforcing the regulations.


Rockefeller is taking it one step further.


“If the information in the story is correct, your company is apparently spending a significantly lower percentage of McDonald’s employees’ health care premiums on their medical care than the benchmarks established” in the new health reform law, he wrote. “If this is the case, McDonald’s hourly wage workers are setting aside portions of their paychecks for an insurance product that may not be providing them a good value.”


“In addition to spending an insufficient portion of their premium dollars on medical care,” he continued, “the products BCS is selling to McDonald’s employees are not likely to protect them against the costs of a major health care episode. The $2,000 maximum annual coverage you apparently offer in your McDonald’s ‘Basic Plan’ would not come close to covering the costs of hospital emergency services or the delivery of a child.”


The senator asked for information on coverages, deductibles, premiums, copayments and other “out-of-pocket” costs that McDonald’s workers pay, and how much they have received in benefits over the past five years, with a deadline of Oct. 15.


Also, he wants the company and its insurer to “describe the business arrangement under which McDonald’s allows BCS to sell health insurance products to McDonald’s employees.”


A McDonald’s spokeswoman said the company had no comment on the letter. A BCS spokesman was not immediately available for comment.   


Filed by Paul Merrion of Crain’s Chicago Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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