McDonald's could drop health coverage for 30k employees

[theeedude]

Another reason to avoid McDonalds. Do you really want to buy food at a place where staff doesn't have health coverage to get checked out if they are sick? And no, $2K per year is not health coverage, it's a fig leaf.

 

[Red Dawn]

30k people across 10k locations means only the top 3 managers at each location get this insurance. Part time people do not get it. Even most of the full time people don't get it. A small McDonalds will have 10-20 total employees, 1 store manager, and about 5 shift managers.
Source: I worked at McDonalds before.

Lol, the OP made it seem like all of McShits workforce was getting screwed.

 

[ShawnD1]

There's like 13.3K locations across the USA now. It's just a drop in the bucket. As far as I'm concerned Mcdonalds can go fuck themselves. They should grow a pair and charge an extra buck for the big mac so they can provide all their employee's full and part time with exceptional insurance coverage so Joe the Tax payer doesn't get stiffed again. MacDonalds should just make an take the first step and and set and example for the rest of the chains and maybe inspire wall mart and other stores like them to follow in their foot steps.

This would cost them billions of dollars. In fast food, every penny matters. The reason I never go to Dairy Queen is because their burgers are $1-2 more expensive than other places.

 

[ebaycj]

From the article the OP quoted in his post:

McDonald's, in a memo to federal officials, said "it would be economically prohibitive for our carrier to continue offering" the mini-med plan unless it got an exemption from the requirement to spend 80% to 85% of premiums on benefits. Officials said McDonald's would probably have to hit the 85% figure, which applies to larger group plans. Its insurer, BCS Insurance Group of Oak Brook Terrace, Ill., declined to comment.

McD's is using BCS Insurance Group of Oak Brook Terrace, Ill

You know who else is headquartered out of Oak Brook Terrace, IL ?

McDonald's.

 

[theeedude]

Seriously, company takes at least 20% of the premiums for itself and only pays out up to $2000, which is basically nothing. Sounds like a scam on the clueless McDonalds workforce.

 

[HumblePie]

You know who else is headquartered out of Oak Brook Terrace, IL ?

McDonald's.

Which was the point I also made. It is their insurance company.

And as for 30K employee's not claiming $552K per year in claims, yep I did say that Hayabusa. Why? Obviously they aren't making that many claims now or McD's wouldn't be bitching. Because if they were making that may claims yearly so that the insurer was already paying out 80% of their premiums, then why the hell would McD's care about a new law stating something they already do? Duh.

These insurance plans are for a few select employees as already pointed out, and even then for mostly young healthy people. Claims for medical purposes on these plans are rarely made even for "preventative" checks.

The whole thing still smells of McD crying because they are about to lose their lollipop.

 

[ericlp]

This would cost them billions of dollars. In fast food, every penny matters. The reason I never go to Dairy Queen is because their burgers are $1-2 more expensive than other places.

The point is if you knew that extra dollar went to some "AMERICAN HEALTHCARE" I'm sure most (I use that term loosely) would not mind paying the extra.

Maybe MCD's should rip out the Mcdonald kids home donation boxes and switch it over to workers health care! hahaha

Sad Sad Sad. The usa needs global free health care for all.

 

[Hayabusa Rider]

global free health care for all.

That would be nice. I'd like a really big free mansion too. Maybe a nice convertible and a really big pickup for hauling lumber. Hmm, I could use a big sailboat maintained for me. Oh, make me a sammich, globally free of course.

How the hell do people come up with "free". It's the dumbest notion around, or close to it.

 

[Hayabusa Rider]

Which was the point I also made. It is their insurance company.

And as for 30K employee's not claiming $552K per year in claims, yep I did say that Hayabusa. Why? Obviously they aren't making that many claims now or McD's wouldn't be bitching. Because if they were making that may claims yearly so that the insurer was already paying out 80% of their premiums, then why the hell would McD's care about a new law stating something they already do? Duh.

These insurance plans are for a few select employees as already pointed out, and even then for mostly young healthy people. Claims for medical purposes on these plans are rarely made even for "preventative" checks.

The whole thing still smells of McD crying because they are about to lose their lollipop.

30 thousand anyones would consume more than roughly half a million bucks. All you need are a couple good accidents and some unexpected health problems. A hundred people can use that easily, however I may be misunderstanding the situation because I understand there is a 2k cap per insurance holder. That would require roughly 300 people to max out that benefit.

In any case this looks to be all moot because the Obama administration is going to issue McDs a waiver.

 

[hal2kilo]

You know who else is headquartered out of Oak Brook Terrace, IL ?

McDonald's.

Oh no way it could be their own captive business lol. Or at least have some "profit sharing" agreement. I'm sure everything is above board.

 

[MJinZ]

That would be nice. I'd like a really big free mansion too. Maybe a nice convertible and a really big pickup for hauling lumber. Hmm, I could use a big sailboat maintained for me. Oh, make me a sammich, globally free of course.

How the hell do people come up with "free". It's the dumbest notion around, or close to it.

Nothing is wrong with free.

I give things away for free. I get in exchange a fuzzy feeling inside. It usually doesn't take any fuzzy feeling away from someone else.

 

[her209]

Seriously, company takes at least 20% of the premiums for itself and only pays out up to $2000, which is basically nothing. Sounds like a scam on the clueless McDonalds workforce.

I love the smell of competition in the morning.

 

[nonlnear]

Nothing is wrong with free.

I give things away for free. I get in exchange a fuzzy feeling inside. It usually doesn't take any fuzzy feeling away from someone else.

On the other hand if you mugged your neighbors and gave away the proceeds, it would take away a lot of warm and fuzzies from a lot of people.

 

[MJinZ]

On the other hand if you mugged your neighbors and gave away the proceeds, it would take away a lot of warm and fuzzies from a lot of people.

Well in that case, the warm and fuzzies can balance out on a cosmic scale.

But free is obviously better.

 

[daishi5]

I'm an IT guy and can probably count more written databases I have done than most people around here can count the number of times they've brushed their teeth. I know people right now working for USAA and former employees that currently work with me. I know the administrative costs for "tracking" high turn over employees is a load of bunk. There could be another valid reason, but seriously I don't see that reason unless everything is being tracked by hand.

There may well be other reasons for their higher administrative costs, but the reason given is one I'm calling bullshit on as I am speaking from professional experience on this matter.


EDIT*
Thanks to the link above I can see that the original OP was full of the bullshit I was smelling. McD may have concerns over what the regulation entails, but unless they are going to be nothing but greedy a-holes, they are going to comply with the law by making any adjustments needed.

Your focus on what you know is your problem. Most of the overhead costs relating to turnover are not database and tracking costs. For example, each new employee probably needs information on the program, which requires pamphlets, books, and possibly letters mailed to them. There are probably going to be some form of background checks, tracking their communications, answering questions, they probably have a phone center they need to staff, they also need to comply with regulatory reporting agencies. If there are any physical or check up requirements, the company has to handle those and process them as well. It is hard to know what all they may have in the way of overhead costs, but it is not hard to imagine that it could eat up $100 pretty easily. And don't forget, that a lot of these one time costs are dictated by law.

 

[daishi5]

Well in that case, the warm and fuzzies can balance out on a cosmic scale.

But free is obviously better.

Your missing the point, if you give something away, it was free for them, but not for you. Unless someone gave it to you, then it was still not free for them. And even if someone gives it to you no cost, and you give it away no cost, it is still not "free" to you. It takes up at least some of your time, and that time is a cost.

 

[HumblePie]

Your focus on what you know is your problem. Most of the overhead costs relating to turnover are not database and tracking costs. For example, each new employee probably needs information on the program, which requires pamphlets, books, and possibly letters mailed to them. There are probably going to be some form of background checks, tracking their communications, answering questions, they probably have a phone center they need to staff, they also need to comply with regulatory reporting agencies. If there are any physical or check up requirements, the company has to handle those and process them as well. It is hard to know what all they may have in the way of overhead costs, but it is not hard to imagine that it could eat up $100 pretty easily. And don't forget, that a lot of these one time costs are dictated by law.

What? Did you not read what has been posted before? It's 30K people spread over 10K locations. We are talking a couple of managers at each location on these plans. The managers are not high turn-over rate. The average manager is not that old either. I am 32 and have yet to have a background check or physical needed before acquiring healthcare. You are blowing this way out of proportion.

Also, many insurers have enrollment fees to be paid to cover costs of all the pamphlets and crap. Also, those are 1 time fees and these plans are for years for managers.

We have here the case of an insurance company that is more than likely owned or branched off form McD collecting quite a bit of money per year and not paying much out claims. They have low caps, and are skimming off the top more than likely. They are acting all outraged that they can no longer do that.

Also, insurance companies don't typically work in a box on a few accounts. Even if the insurance company is owned at least partially by McD's they still wouldn't be exclusive to them. They would make money by selling more insurance, which in turn diffuses the cost. With technology today, it doesn't take much man power to keep track of everything either.

 

[ShawnD1]

Maybe MCD's should rip out the Mcdonald kids home donation boxes and switch it over to workers health care! hahaha

That's actually not a bad idea. I think everyone appreciates how McDonalds give to charity, but I think it would be nice if that charity started with the employees. What kind of people work at McDonalds? The type of people who really could use that charity.

The point is if you knew that extra dollar went to some "AMERICAN HEALTHCARE" I'm sure most (I use that term loosely) would not mind paying the extra.

I'm 100% certain that most people would rather save the $1. I can even give real world examples. In my city there is a food store called Safeway; the prices are a bit higher, and the employees are paid quite well for that type of work. The biggest competitor is a store called Superstore (Loblaws); this place pays shit wage and everything is cheaper. Guess which store has huge lines and which store has speedy service. At the cheap Superstore, lines are huge and you can expect to wait 10 minutes to buy things. At the employee-friendly Safeway, there are not enough customers to actually form lines.

 

[Throckmorton]

Wait a second... these "mini med" plans are upside down. Instead of having a low cap on benefits, they should have a high deductible. It's not really "insurance" if it tops out at $2,000. You know how much hospitalization costs? Or even an outpatient surgery?

I had a routine hernia repair this year and it cost about $7000.

 

[HumblePie]

Oh and I realized I did my math wrong. That's $690K collected on average per week. We are talking $35,880,000 per year on average collected.

So the new law will mandate that $28,704,000 be paid out as the average. That still leaves over $7 million dollars per year on "operating" costs on just these plans. This doesn't give us deductibles either.

I'm guessing that this insurance company doesn't even pay half of that amount per year in claims. Which would make this a really profitable endeavor.

 

[drebo]

How is taking more than 20% of the total collected premiums offering a decent benefit? How is their "mini-meds" version of health insurance any different than any other insurance plan in existence here in the states? Except for the lower annual payout caps relative to the premiums of course.

McDonalds doesn't take the difference. The insurance provider does. McDonalds isn't self-insured.

The complaint is that the provider McDonalds uses to offer these plans has a higher than 20% overhead fee for maintenance and profit to offer these plans. As explained in the article, there's huge costs associated in administering this type of plan when you have the turnover that McDonalds has. 15% simply isn't enough to maintain them as well as make a profit.

 

[Pens1566]

McDonalds doesn't take the difference. The insurance provider does. McDonalds isn't self-insured.

The complaint is that the provider McDonalds uses to offer these plans has a higher than 20% overhead fee for maintenance and profit to offer these plans. As explained in the article, there's huge costs associated in administering this type of plan when you have the turnover that McDonalds has. 15% simply isn't enough to maintain them as well as make a profit.

Someone hasn't read the thread.

 

[HumblePie]

McDonalds doesn't take the difference. The insurance provider does. McDonalds isn't self-insured.

The complaint is that the provider McDonalds uses to offer these plans has a higher than 20% overhead fee for maintenance and profit to offer these plans. As explained in the article, there's huge costs associated in administering this type of plan when you have the turnover that McDonalds has. 15% simply isn't enough to maintain them as well as make a profit.

Did you not read the posts above? They are collecting on average $35 MILLION dollars per year. The company is based out where McDonalds is based out of. Chances of it being a sister company are close to 100%. The coverage is mainly for managers in 10K stores. Young healthy people that rarely make claims. They are citing "tracking" reasons for high turn over as the reason for their high costs. The federal mandate states that they must pay out 80% premiums and the rest is overhead and profit. On average that would be $7 million. And this insurance company McD's is using is claiming that they spend more than 7 million per year "tracking" supposedly high turn over employees? When in fact the managers on these plans are not high turn over employees unlike the burger flippers.

Get a freaking clue.

 

[daishi5]

What? Did you not read what has been posted before? It's 30K people spread over 10K locations. We are talking a couple of managers at each location on these plans. The managers are not high turn-over rate. The average manager is not that old either. I am 32 and have yet to have a background check or physical needed before acquiring healthcare. You are blowing this way out of proportion.

Also, many insurers have enrollment fees to be paid to cover costs of all the pamphlets and crap. Also, those are 1 time fees and these plans are for years for managers.

We have here the case of an insurance company that is more than likely owned or branched off form McD collecting quite a bit of money per year and not paying much out claims. They have low caps, and are skimming off the top more than likely. They are acting all outraged that they can no longer do that.

Also, insurance companies don't typically work in a box on a few accounts. Even if the insurance company is owned at least partially by McD's they still wouldn't be exclusive to them. They would make money by selling more insurance, which in turn diffuses the cost. With technology today, it doesn't take much man power to keep track of everything either.

Take a note here, I am not saying that I know what their costs are, nor do I claim to understand exactly where these costs come from. But, I do know that turnover has costs, and thus high turnover has higher overhead. I am not saying that it is certain that mcdonalds is telling the truth, only that their argument makes logical sense from a basic knowledge of their company. You, however, are saying that you don't know where these costs might be, therefore it must be a lie. As someone else said, you are arguing from incredulity. Unless you know a lot more about their costs, and are not telling us, you really are not presenting a good argument to refute the claim that they cannot meet 80% just because you don't understand it.

 

[drebo]

Did you not read the posts above? They are collecting on average $35 MILLION dollars per year. The company is based out where McDonalds is based out of. Chances of it being a sister company are close to 100%. The coverage is mainly for managers in 10K stores. Young healthy people that rarely make claims. They are citing "tracking" reasons for high turn over as the reason for their high costs. The federal mandate states that they must pay out 80% premiums and the rest is overhead and profit. On average that would be $7 million. And this insurance company McD's is using is claiming that they spend more than 7 million per year "tracking" supposedly high turn over employees? When in fact the managers on these plans are not high turn over employees unlike the burger flippers.

Get a freaking clue.

These plans aren't PPOs and HMOs for managers. These plans ARE for the burger flippers. McDonalds doesn't employ 30,000 managers.

And, since when has it EVER been the government's job to determine how much money a company is allowed to make?

The next step is the government outright SIEZING money from companies that "make too much".

$7 million/yr is NOT that much. That's an average administrative cost/profit of $233 per year per covered person. That's not a lot, when you consider everything that goes in to maintaining and administering something like this: IT costs, security costs, building costs, payroll, etc.

Let's see the place you work at survive with an average gross profit of $233 per customer.

Your posts are also filled with outrage-induced conjecture. When you can come back and say that the company is only spending 15 or 20 percent of premiums on benefits, then there might be an issue with the company. But, being as we don't know shit about the operations of the insurance company, all we have to go on is the reasonable assumption that 15% gross profit margin isn't enough to run a business properly.