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Health Insurance In Germany: U.S. Fast Food Chains Are Covered

July 18, 1994

BERLIN (AP) _ Ask the burger servers in the neat green-and-white striped shirts at McDonald’s about health insurance, and the response is, well yes, they’ve got it.

McDonald’s-Germany became part of the health-care debate in Washington last week when two members of Congress attacked McDonald’s and Pizza Hut for treating German workers better than their employees here at home.

Sen. Edward Kennedy, D-Mass., and Rep. John Dingell, D-Mich., also mentioned Japan, Belgium and the Netherlands as countries where local workers get more coverage than at home. They complained it was hypocritical of McDonald’s and Pizza Hut to fight against having the same mandated coverage in the United States.

German executives of the two companies were wary of getting involved in the debate between their home offices and powerful congressmen.

″It’s the law here, no one can be hired without being insured,″ said Eva Sachse, vice president for personnel of McDonald’s-Germany, which has more than 500 restaurants.

The company’s revenues shot up 19.2 percent in 1993, to $1.5 billion, and it employed 34,000 workers.

The U.S. home offices say mandated health insurance would raise their costs and thus prices to American consumers. Prices of many items are higher in Germany than in the United States, partly because of health insurance and other personnel costs.

The average price of a Big Mac in Germany is $3.10. Add 19 cents for a packet of ketchup.

How much of that is health insurance cost? McDonald’s-Germany wouldn’t say, nor would Pizza Hut, though in the United States, the company said a medium supreme pizza that costs $11 in America costs $19 in Germany and $25 in Japan.

Pizza Hut says it will have 80 restaurants in Germany by the end of 1994.

High personnel costs figure in the long-running debate over ″Standort Deutschland″ - Germany as a business location.

Chancellor Helmut Kohl’s conservative government is trying to force more flexibility on wages, benefits and working conditions to make Germany more competitive against lower-wage countries.

Last year the government pushed through a reform of the health-insurance system because costs were threatening to run out of control. Doctors, dentists, hospitals and drug companies were forced to keep expenditures at 1991 levels plus 3.9 percent.

Health insurance premiums range from 10 percent to 16 percent of gross pay, with employer and employee splitting it evenly. That provides for full care, almost always with the doctor of one’s choice.

The system covers 90 percent of the population, and the other 10 percent go under private insurance plans for business people, free-lancers, high earners and other categories.

German law obliges all employers, including McDonald’s, to pay half the cost of comprehensive health insurance for its staff. One important exception are students, who stay on their parents’ plan until age 25.

Such exceptions account for about 20 percent of the hours worked at McDonald’s in Germany, Eberhard Hoffman, personnel director at the company’s Munich base, said in a telephone interview.

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