BUSINESS
09/30/2010 09:54 am ET | Updated May 25, 2011

McDonald's May End Health Care Benefits For 30,000 Workers

UPDATE: Sept. 30, 11:57 a.m. EST -- McDonald's denies it McDonald's Senior VP Steve Russell, who is the head of human resources, calls reports that the company will drop its coverage "completely false." Health and Human Services Secretary Kathleen Sebelius has also denied The Wall Street Journal's report, calling it "flat out wrong."

"I am sorry that they were not more accurate in their reporting," Sebelius said.

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McDonald's has threatened to terminate health benefits for almost 30,000 hourly workers if the government doesn't give the corporation a pass on a provision of this year's health care legislation, the Wall Street Journal reports.

The restaurant chain's insurer has refused to meet a 2011 requirement to spend 80 to 85 percent of its revenue from premiums on actual medical care, a McDonald's official told the U.S. Department of Health and Human Services last week. That high of a percentage, McDonald's says, according to the WSJ, doesn't make sense given the high cost of dealing with frequent worker turnover. The requirement was designed to curb executive salaries and other expenses not directly related to health care.

In a memo quoted by the WSJ, McDonald's said it would be "economically prohibitive" for their insurance provider to continue offering plans, in which workers currently can pay $13.99 a week ($727.48 annually) for $2,000 of annual coverage, $24.30 a week ($1,263.60 annually) for $5,000 of annual coverage or $32.30 a week ($1,679.60 annually) for $10,000 of annual coverage, according to the WSJ.

"We're not going to walk away from health-care insurance completely, but we're going to have to look for alternatives if we can't get the resolution we're seeking from Health and Human Services," McDonald's spokeswoman Danya Proud told Bloomberg.