
The announcement Thursday followed a report in The Wall Street Journal that McDonald’s warned federal regulators it could drop its health-insurance plan for nearly 30,000 restaurant employees unless regulators waive a new requirement of the health overhaul. The requirement, known as the minimum medical loss ratio, concerns the percentage of revenue received from premiums that must be spent on benefits.
McDonald’s is among the retailers and restaurant chains that offer a “mini-med” limited benefit. Most of these plans don’t meet a 2011 condition that they spend 80% to 85% of premiums on medical benefits instead of overhead expenses.
McDonald’s last week sent a top official at the Department of
Health and Human Services a memo saying “it would be economically prohibitive for our carrier to continue offering” its “mini-med” limited benefit diagram unless it got an exemption from the requirement.
On Thursday, administration officials indicated they are hopeful that HHS Secretary Kathleen Sebelius will be able to allow certain waivers to the condition, but that it was too early to confirm they will. She must wait for guidance from state insurance commissioners, and the administration doesn’t expect to release the agency’s final guidance until December. The agency said the law gives Ms. Sebelius discretion to apply the condition.