More Health Care Reform Repercussions
NEW YORK -- A recent survey of chain restaurant employers found more than 75 percent of respondents are considering cutting the hours of full-time hourly workers in response to the new health care reform mandates, according to a report by NRN.com.
In the study, 29 chain restaurant employers surveyed before Election Day said they were concerned about commonly used "mini-med" or limited medical plans for hourly workers, according to a survey conducted by Hay Group and the Chain Restaurant Association.
Under the plan that narrowly passed Congress and was signed into law by President Obama, starting in 2011, insurers of mini-med plans will be required to spend 80 percent to 85 percent of premiums on medical benefits instead of on overhead expenses -- a limit that most benefit plans in the restaurant industry do not meet because the industry's high turnover results in high administrative costs for such plans, according to the surveyors.
According to the survey, 70 percent of employers said they offer mini-med plans to their hourly employees, although fewer than 25 percent of those employers contribute toward plan costs.
Health care reform is likely to change that number, the survey found. As a result of reform mandates, 77 percent of respondents said they are considering reducing the hours of full-time workers to part-time, according to the NRN.com report.
Under the reform bill, the annual limits on coverage were raised significantly on mini-med plans for full-time employees, making such plans prohibitively expensive. The higher limits would not apply to part-timers, so employers might see that shift as a way out, according to the report.
Another 54 percent of respondents in the survey said they are considering eliminating limited medical plans entirely for hourly workers.
Two-thirds said they are not considering changes in 2011 and will likely apply for waivers similar to the ones granted last month to McDonald's, Jack in the Box, a Denny's franchisee and 27 other companies. The one-year waivers will not require those companies to raise the minimum annual coverage, as required by the health care mandate.
Mini-med plans are not used as much by employers in the c-store industry as they are in the restaurant industry.