McDonalds Threatens to Drop Insurance

[Terrel L. Shields]

from WSJ

McDonalds has warned federal regulators that it could drop its health insurance plan for nearly 30,000 hourly restaurant workers unless regulators waive a new requirement of the U.S. health overhaul.

The Obamacare plan would force expensive changes to McDonalds plan. Similar plans are at CBS, Disney, etc. and those companies are also demanding changes that would impact 1.4 million workers... So who is left to PAY for their insurance and look at the smallest Mom and Pop operations...

the restaurant chain's insurer won't meet a 2011 requirement to spend at least 80% to 85% of its premium revenue on medical care.
McDonald's and trade groups say the percentage, called a medical loss ratio, is unrealistic for mini-med plans because of high administrative costs owing to frequent worker turnover, combined with relatively low spending on claims.

 

[Green Hornet]

from WSJ

The Obamacare plan would force expensive changes to McDonalds plan. Similar plans are at CBS, Disney, etc. and those companies are also demanding changes that would impact 1.4 million workers... So who is left to PAY for their insurance and look at the smallest Mom and Pop operations...

Seems to me that they are saying that they are not even willing to even try and meet the ratios. That they would rather resort to threats than actually figure it out.

When are people going to catch on that this is standard operating proceedure for companies when new regulations come out. This has been going on for centuries. The sky is falling....ahhhhh...oh, never mind.

How much expense is associated with signing one person up and removing another? My guess is it is typically a lower paid office staff that handles this. What is the turn over rate? Most plans of this type that I have seen, the employee is not even eligible until 2 or 3 months of employment.

Show me some numbers!

Wait, this sounds like the AMCs saying that they add value to the process for their %50 take.

 

[Mountain Man]

Seems to me that they are saying that they are not even willing to even try and meet the ratios. That they would rather resort to threats than actually figure it out.

When are people going to catch on that this is standard operating proceedure for companies when new regulations come out. This has been going on for centuries. The sky is falling....ahhhhh...oh, never mind.

How much expense is associated with signing one person up and removing another? My guess is it is typically a lower paid office staff that handles this. What is the turn over rate? Most plans of this type that I have seen, the employee is not even eligible until 2 or 3 months of employment.

These businesses have HIGH employee turn over. That's why some have permanent signs that say "Now Hiring". The administrative cost to keep track of all this is enormous! That is why they can not comply with the big O's socialized med program, the caps on expenses is not reasonable. Insurance companies are in the biz to make a profit after all... they are not a charity. Some are mutual, but even they can't afford to ride in the red. It's Econ 101... but none of the politicians in control right now have ever held a real job or punched a time clock, so I'd not expect them to understand.

 

[TJSum]

The politicans are not as dumb as they appear with this one, the intent all along was to drive everyone into one governent run system. They knew the bill would not pass if written with the true goal in mind, so they wrote it this way, knowing it would end up in the same place anyhow. Hopefully in November, all the bums will be tossed out of office so we can pass new laws to override this "free health care" nonsense. The Big O can then be shown the door two years down the road, he should have run for office in Cuba with this kind of nonsense.

 

[Green Hornet]

These businesses have HIGH employee turn over. That's why some have permanent signs that say "Now Hiring". The administrative cost to keep track of all this is enormous! That is why they can not comply with the big O's socialized med program, the caps on expenses is not reasonable. Insurance companies are in the biz to make a profit after all... they are not a charity. Some are mutual, but even they can't afford to ride in the red. It's Econ 101... but none of the politicians in control right now have ever held a real job or punched a time clock, so I'd not expect them to understand.

I'm not arguing the politics of healthcare reform or what the current politicians position's are.

I'm tired of seeing the same old baloney. Every time something new is instituted, a similar batch of press releases come out touting the end of the world as we know it...the same old process. A few days/weeks later not another peep is heard. One after the other. Even if they do not have any factual basis, it creates the illusion of constant upheaval and trauma.

I really don't know if what they are saying is true or if it is the same old scare tactic.

How about some real reporting instead of acting as the industries mouth piece. Ask some simple followup questions instead of printing quotes issued by the PR staff.

As I said, show me the numbers. What does it cost to sign someone up...to remove someone. Once the paper work is input by the lower level folks, it's all computerized, if not, it should be...oops, I just hit the inactive button. That cost 2 cents. How much does it cost to process a claim? I don't know.

Assuming that most of the coverage is for preventitive care, I would think the processing costs would be pretty small with standardized coding.

 

[Green Hornet]

On the healthcare issue.

I was having a conversation with my brother prior to the vote, he is a CEO of a major corporation. I was asking him why a company would appose universal healthcare if it did not cost anything additional to the company? Why would a company want to manage a healthcare plan?

Other than apposing universal healthcare from an ideology point, there really is not a business reason to appose it.

 

[The Warrior Monk]

As I said, show me the numbers. What does it cost to sign someone up...to remove someone.

In NY, increases for individuals are limited by law. Group health care, used by corporations, is not, so guess who gets slammed? That includes mom and pop shops that are incorporated, which includes myself. How much did my insurance go up?....60%. As a result, I had to switch to an even higher deductible. Corporations simply cannot afford to take this type of hit without either dumping employees or dumping the health care.

It is just simply no surprise that the economy is not recovery. Policies like this are huge disincentives to hiring people.

 

[Green Hornet]

In NY, increases for individuals are limited by law. Group health care, used by corporations, is not, so guess who gets slammed? That includes mom and pop shops that are incorporated, which includes myself. How much did my insurance go up?....60%. As a result, I had to switch to an even higher deductible. Corporations simply cannot afford to take this type of hit without either dumping employees or dumping the health care.

It is just simply no surprise that the economy is not recovery. Policies like this are huge disincentives to hiring people.

Again I ask, why is health insurance an employer issue? Why, as an employer, would you want the headache of the healthcare issue?

The main reason companies are not hiring is because they don't need to. Why would you hire someone if the demand is not there and the potential of near term growth is not the result of hiring the person?

 

[The Warrior Monk]

Again I ask, why is health insurance an employer issue? Why, as an employer, would you want the headache of the healthcare issue?

There are all sorts of reasons. As a prospective employee, would you consider the benefits the firm provides when deciding to accept a position?...Except for the independently wealthy and certain nonprofits, anyone would. Employers know this an must adapt accordingly.

Firms with existing benefits are stuck between a rock and a hard place. They can't simply just dump benefits, because that creates instant tension with employees. They also can't start treating new hires differently, because that also creates office tension.

The main reason companies are not hiring is because they don't need to. Why would you hire someone if the demand is not there and the potential of near term growth is not the result of hiring the person?

If they don't need to they won't hire. However, if they need to hire, then their bottom line matters. If the costs go up for existing employees without profits increasing accordingly, they're not going to hire someone new.

 

[Green Hornet]

There are all sorts of reasons. As a prospective employee, would you consider the benefits the firm provides when deciding to accept a position?...Except for the independently wealthy and certain nonprofits, anyone would. Employers know this an must adapt accordingly.

Still does not address the question WHY healthcare is employer based.

So, there is a benefit to the company for offering healthcare. Given your statement above and your statement below about the bottom line, the ability to attract better employees must outweight the cost of offering the benefit.

Firms with existing benefits are stuck between a rock and a hard place. They can't simply just dump benefits, because that creates instant tension with employees. They also can't start treating new hires differently, because that also creates office tension.

Sure they can, happens all of the time. My wife is grandfathered in a gets good benefits...newer employees, not so much.

If they don't need to they won't hire. However, if they need to hire, then their bottom line matters. If the costs go up for existing employees without profits increasing accordingly, they're not going to hire someone new.[/QUOTE]

Very true, if the cost/benefit analysis does not point to benefit, then why hire a person.

However, I disagree with the not hiring someone new because the other employees cost too much, assuming that the current pay/benefits structure is allowing a profit for the company. If it is not, then the management should be fired for allowing this to happen.

The decision to hire or not is typically based on the potential benefit of the additional person. Yes, I know, office politics, protecting budget allocations...are also considerations. If the benefit does not outweigh the cost, then they should not be hired...depending on how you measure the benefit.

So..overall, the cost of offering healthcare is offset by the increased abilities of the potential employees that you attract. Maybe this only applies to skilled positions and not so much for part time and entry level positions.

The current employment environment is the perfect time to slash benefits for non skilled workers, the supply of workers exceeds the demand. Could this be the real reason that, Macs and others, are cutting benefits hiding behind the legislation. Nah, corporations never do anything like that.