Large-employer medical plans that don't provide insurance coverage for hospital stays will now not qualify under the Affordable Care Act’s toughest standard, as the Obama administration closes what many were calling a loophole.
It was linked to ACA rules that require mid- to large-size employers to offer affordable health plans to employers in 2015 or pay a fine.
Under the Act, plans must have a so-called "minimum value," covering around 60% of the costs of benefits, on average. However, some of those plans being offered to employees do not include in-patient hospitalizations as a covered benefit for workers, according to the United States Department of Health and Human Services.
Here is the loophole part. Even though hospitalization can quickly and exponentially drive up medical costs obviously, some of those plans did still reach the required threshold according to an HHS online "minimum value calculator."
The calculator is actually an online spreadsheet to certify whether insurance pays at least 60% of expected medical costs for a given plan .
In this document published by the HHS this week, the agency said in so many words forget about the calculator, which many have criticized as flawed.
"Plans that fail to provide substantial coverage of in-patient hospitalization services or for physician services (or both) . . . do not provide the minimum value intended by the minimum value requirement."
HHS and the Treasury Department said regulations will soon be proposed to this effect, and that we can expect the rules to be finalized and implemented in 2015.
As for who might be facing a fine, the feds say employers won't face penalties if they had committed to adopting or begun enrolling employees in plans that do not cover inpatient hospitalization or physician services prior to November 4, 2014.
Hundreds of employers with low-wage workers such as restaurants, retailers and staffing companies have been preparing to offer such plans for 2015, the first year large companies are liable for fines if they don’t provide minimum coverage.
Kaiser Health News among others has asked the Obama administration multiple times to respond to the criticism that the calculator is inaccurate, but no one has yet commented.
Something like half of the American Staffing Association’s 1,600 members, who reportedly employ 3 million workers on any given day, had committed to offer or were considering calculator-tested plans without hospital coverage, according to Edward Lenz, senior counsel for the ASA.
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