Dive Brief:
- Health plans without hospital benefits will no longer meet large employers' obligations to provide health insurance under the Affordable Care Act, the Department of Health and Human Services announced Friday. The plans were proving popular this year for employers of large numbers of low-wage workers that hadn't previously provided health coverage.
- The HHS has determined that plans that lack substantial coverage of hospital and physician services do not qualify as "minimum value" coverage, and therefore do not shield large employers from owing fines for failing to provide insurance.
- The decision resolves what was often considered an ACA loophole, Kaiser Health News notes, that let large employers skirt the strictest standards for coverage while leaving their workers stuck with sub-par insurance and ineligible for tax credits in the online marketplaces.
Dive Insight:
The news comes at a difficult time for employers in limbo. HHS is allowing these plans for 2015 only for those employers who had signed contracts as of Nov. 4.
At the same time, the HHS is providing relief to employees with such coverage. The department says these employees can receive tax credits based on their income to purchase more comprehensive insurance through the marketplaces, because a plan without hospital coverage "is not a health plan in any meaningful sense," HHS said.