Mcdonalds may Drop Health Insurance Plan for Hourly Workers

The Wall Street Journal reported fast food giant McDonald’s was considering dropping the health insurance plan for hourly workers and this sparked off much controversy. Reportedly McDonald’s was making this decision as a response to a provision in the recent health care reform requirements. If this were to occur, approximately 30,000 employees would lose their health insurance.

The Wall Street Journal cited a memo reportedly sent from McDonald’s to federal officials about a week earlier. According to the WSJ report “a top McDonald’s official told regulators its insurance plan won’t meet a requirement for next year that it spend at least 80 percent to 85 percent of its premium revenue on medical care.” (Associated  Press)

Almost immediately following WSJ’s report, McDonald’s denied this allegation. The company stated that it was true McDonald’s was in discussions with the feds in order to gain a better understanding of the law, by that the contention the fast food corporation was dropping health insurance for employees was ‘completely false’ (Associated Press)

The government also disputes WSJ’s story.

While both McDonald’s and the Government acknowledge correspondences have been exchanged they are denying the surmises being announced across the web.

Jessica Santillo, a spokesperson for the Department of Health and Human Services stated “This story is wrong. The new law provides significant flexibility to maintain coverage for workers. Additionally, this story is premature as guidance on the new medical loss ratio rules has not even been issued.” (Fox Business)

Essentially McDonald’s is saying that this story has taken on a false spin and the facts being shared by the media with the public are completely speculative in nature and written to grab headlines. According to, McDonald’s was making an inquiry about waiving a portion of the new law that “may force the company to seek an alternative insurance plan for some workers.”

Danya Proud, a spokesperson for McDonald’s stated that the restaurant chain does not have any plans to drop health care coverage for employees. With this statement came a decline to share the memo publicly because the memo is proprietary.

So is McDonald’s looking to drop insurance for 30,000 employees? Was the WSJ correct or did they jump the gun in their initial article? Chances are there is more behind the scenes than either McDonald’s or the Health and Human Services Department wants to share at this time, and at the moment it seems this assumption is perhaps premature.

Only the three entities know for sure at this point, but what does seem probable to the rest of us is that the company is having an issue(s) with the Obama Administration’s requirements of businesses with new health care reform measures and at the very least is looking for clarification and/or other options. What the company actually plans to do about the health care plans for their tens of thousands of part time workers remains to be seen as no official announcement has been made.


Associated Press

Fox Business


Chicago Tribune