Thursday, September 30, 2010

Will you be able to keep your current health plan?

Maybe not, if you are an hourly employee at McDonald's, according to WSJ.   Mickey D sells limited coverage policies at $14 to $32 per week with benefits capped at $2000 to $10000 per year.  The ratio of plan spending on medical care to total premium revenue is below the magic 80-85% threshold set under the health insurance regulation bill passed earlier this year.  This regulation was intended to force insurers to minimize overhead.  Mickey D claims high worker turnover raises their administrative costs so much that the 80-85% target may not be reachable.  If it cannot receive some sort of waiver, the company is seriously considering dumping the plan.  With the fines for violating the mandated coverage regs well below the cost of health insurance policies that meet the new federal standards, do not be surprised to see many other companies take a hard look at dropping their coverage as well.

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