Individual Seeks Delay of Nondiscrimination Rules Applicable to Insured Group Health Plans

From: CedarCorp McDonald's [mainoffice@cedarcorpmcd.com]

Unfortunately Pacificare and United Healthcare raised their rates slightly during our June 2010 open enrollment, eliminating our opportunity to have a "grandfathered" plan that is not subjected to the nondiscrimination rules at this point in time. Due to the nature of our workforce, we will almost certainly fail the nondiscrimination test. This is an unfair burden on industries such as ours, because employees making minimum wage or close to it, can't afford to contribute anything towards their health insurance. Thus, the only way we could avoid failing the nondiscrimination test would be to pay 100% of our low-wage workers' premiums, increasing our health insurance cost by millions of dollars a year. We could not afford that, and would be forced to eliminate our health insurance benefits all together or put a cap on all low-wage employees' hours worked so that they are not full time employees.

Considering that we might have to eliminate our health insurance benefits before the entirety of the Affordable Care Act comes in to effect, our currently covered employees' only option would be to purchase individual policies, which for a whole host of reasons, may not be available or affordable. Implementing the nondiscrimination rules before 2014 will increase the number of people without any health insurance whatsoever, or, alternatively, increase the number of low income workers who cannot find an adequate amount of work. Neither option is a good one, and we don't want to be forced to chose between the two. It is our hope that the new nondiscrimination rules can be delayed until 2014 or be substantially relaxed for industries that employ large numbers of low-wage workers.