Dive Brief:
- The Obama administration has signaled concern over a glitch in the system that was allowing large companies to offer health plans that did not include hospital benefits in 2015. An “online calculator” created by the Department of Health and Human Services was used to vet plans for successfully meeting minimum-value standard, and was approving low-cost plans that did not cover hospital services.
- The plans were being used by employers as an inexpensive way to avoid being fined for not offering insurance. Employees who were offered these plans at their jobs would be exempt from federal subsidies on the state exchanges.
- Officials from the Treasury Department have not made a final decision regarding the plans, but sources told Kaiser Health News they may be changing the calculator and disallowing these plans by year’s end.
Dive Insight:
There was recent uproar when Kaiser broke the story on these plans after speaking with brokers who were selling them. Hospitals obviously have a vested interest in the issue, as do patients who would be without hospital coverage.
But if the plans are nixed, it would also greatly impact employers in industries like light manufacturing, staffing, retail, and hospitality. A member survey by the American Staffing Association found that 46% of temporary and recruiting firms were looking at this type of coverage next year, and about three million people are employed in that industry. Although no names have been given, brokers reported to Kaiser that many firms had already signed up for the plans.
“These are cost decisions impacting employers,” said Anne Lennan, president of the Society of Professional Benefit Administrators, some of whose members administer the plans under scrutiny. “We’re getting close to Jan. 1. If you’re going to change this you have got to let people know.”