Darden, others offer health option for low-wage workers

Nov. 26--As federal reforms kill "mini-med" health plans, Orlando-based Darden Restaurants and other companies are turning to a similar option for low-wage workers.

Called fixed indemnity plans, they pay patients set amounts of money for a limited number of doctor visits, prescriptions and other medical costs. They are not considered true health insurance, and some consumer advocates have criticized them for low payouts.

But supporters say they can help workers with costs until they meet the deductibles on their regular insurance.

"It's not health insurance," said Danielle Kirgan, a senior vice president at Darden. "We positioned this as an add-on feature."

For a single person, Darden's 1st Day Choice costs $520 a year. Annual benefits include reimbursements of $60 apiece for six doctors' visits and $20 apiece for 25 prescriptions. It also provides some small per-day reimbursement for hospitalization.

Darden provides major medical coverage only to full-timers -- about a quarter of its more than 200,000 workers at Red Lobster, Olive Garden and other chains. "Mini-med" plans, which were inexpensive but capped benefits at just a few thousand dollars, were available to part- and full-timers alike but will be prohibited by the Affordable Care Act next year.

Many workers who relied on mini-med policies are expected to shop for more comprehensive government-subsidized insurance on the new exchanges.

Texas-based Fringe Benefit Group said it has sold fixed payment policies to more than a dozen large national employers that had to drop mini-med insurance.

"We're seeing a lot of restaurants, retailers -- folks where they have those $10 to $15 dollar per hour part-time jobs where they still want to offer benefits," said John Conkling, a vice president at the company.

Matthew Snook, of the benefits-consulting firm Mercer, said his company's clients have done the same thing. But neither firm would identify the companies.

In Orlando, other companies that have provided mini-med coverage to part-timers include Walt Disney World, where 1,400 workers had mini-med insurance. It said it is not offering fixed payment plans next year.

Universal Orlando would not comment, and a SeaWorld representative could not be reached for comment.

Critics of fixed payment policies say they generally provide little.

"In general, we have not thought they were a good deal," said Nancy Metcalf, an editor with Consumer Reports. "People who pay premiums into these things are not going to get much back in terms of benefits."

How much such a plan helps you depends on how often you use it, said Gary Claxton, a vice president with nonprofit health-advocacy group Kaiser Family Foundation.

It could benefit someone who makes regular doctors' visits, takes lots of medicine and has high-deductible insurance. But healthy people could end up paying more than they get in benefits, he said.

Critics also say consumers can easily confuse fixed payment plans with the health insurance that Obamacare will require for everyone next year.

But Darden has told workers 1st Day Choice does not meet federal standards and that they face fines if they don't buy other coverage. Other companies are taking similar steps, Conkling said.

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