McDonald’s currently offers low-wage employees Mini-Meds (limited benefit health plans) for $14 to $32 per week in premium that cover from $2,000 to $10,000 a year in medical expenses. This article examines the impact of Health Care Reform (PPACA 2010) on Mini-Meds and explains why McDonald’s should expand their low-wage employee benefits to include major medical tax free individual health insurance plans.
Earlier this month, reports surfaced that McDonald's Inc. is considering canceling its mini-med limited benefit plans due to new health reform requirements taking effect January 1st, 2011. In a recent memo, the restaurant suggested that it may drop coverage for approximately 30,000 hourly workers. McDonald's memo is the latest indication of the unintended consequences of health care reform (remember AT&T, Deere, Verizon and Caterpillar).
According to the WSJ.com, Home Depot Inc., Disney Worldwide Services, CVS Caremark Corp., Staples Inc. and Blockbuster Inc. offer similar mini-med plans.
An Overview of McDonald's Mini-Med Offering
Mini-med plans are inexpensive, limited health plans that are designed to cover routine expenses rather than catastrophic treatment. The "mini" refers to the coverage amount, which is typically capped at $2,000 to $10,000 per year.
While popular among small businesses, the mini-med plans have become increasingly popular among large firms in the retail section because it gives these companies a way to offer cheap insurance to hourly workers. According to Mercer, 63 percent of large retail or wholesale companies offer mini-meds to low-wage workers.
The McDonald's chain has offered a mini-med plan for more than 10 years. It currently provides mini-meds for workers at 10,500 U.S. locations. A single worker can pay $14 a week for a plan that caps annual benefits at $2,000, or $32 a week to get coverage up to $10,000 a year.