Promoted from the Ricochet Member Feed by Editors Created with Sketch. We Passed Health Care Reform . . .

 

Now, we’re finding out what’s in it:

Some employers are avoiding Obamacare penalties by offering “skinny” insurance plans that provide workers with minimum coverage like preventive care but little else, including benefits to help cover hospitals stays.

The minimum coverage qualifies as acceptable under the new healthcare reform law, so benefit advisers and insurance brokers are pitching minimum plans nationally, reports the Wall Street Journal.

Employers who offer the plans are recognizing they can avoid a $2,000-per-worker penalty by doing so, even though the plans often don’t cover basics like surgery, X-rays or prenatal care, let alone hospitalization.

As the story states, “employers could still face other penalties, but they expect them to cost less than the $2,000 per worker fine for opting out of Obamacare.” More:

Would you like to have a “skinny” health insurance policy? Probably not. But if you’re employed by a large company, you may get one, thanks to ObamaCare.

That’s the conclusion of Wall Street Journal reporters Christopher Weaver and Anna Wilde Mathews, who report that insurance brokers are pitching and selling “low-benefit” policies across the country.

Wonder what a “skinny” or “low-benefit” insurance plan is? The terms may vary, but the basic idea is that policies would cover preventive care, a limited number of doctor visits and perhaps generic drugs. They wouldn’t cover things such as surgery, hospital stays or prenatal care.

That sounds similar to an auto-insurance policy that reimburses you when you change the oil but not when your car gets totaled.

You might ask how ObamaCare could encourage the proliferation of such policies. It was sold as a way to provide more coverage for more people, after all. And people were told they could keep the health insurance they had.

As Weaver and Mathews explain, ObamaCare’s requirement that insurance policies include “essential” benefits such as mental-health services apply only to small businesses with fewer than 50 employees. But larger employers “need only cover preventive service, without a lifetime or annual dollar-value limit, in order to avoid the across-the-workforce penalty.”

Low-benefit plans may cost an employer only $40 to $100 a month per employee. That’s less than the $2,000-per-employee penalty for providing no insurance.

“We wouldn’t have anticipated that there’d be demand for these type of Band-Aid plans in 2014,” the Journal quotes former White House health adviser Robert Kocher. “Our expectation was that employers would offer high-quality insurance.”

Oops.

Indeed.

There are 7 comments.

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  1. Caryn Thatcher
    Caryn Joined in the first year of Ricochet Ricochet Charter Member

    The crazy thing is that most of us can–and used to–pay for the preventative stuff ourselves and really only need insurance for the big, catastrophic eventualities. Now it’s all upside down, thanks first to mandates, followed by stupid, stupid Obamacare.

    It is infuriating!

    • #1
    • May 24, 2013, at 1:35 AM PDT
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  2. Kozak Member
    Kozak Joined in the first year of Ricochet Ricochet Charter Member

    Amusing. So those LEAST able to afford the expansive coverage mandated, small business and individuals MUST provide it, while those with the most political clout ie large companies are exempt. Gee, what a shocker.

    • #2
    • May 24, 2013, at 3:05 AM PDT
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  3. Dan Hanson Thatcher
    Dan Hanson Joined in the first year of Ricochet Ricochet Charter Member

    I think this is covered in Obamacare, and it’s the reason why there’s also a penalty for employers if their employees seek coverage under the exchanges, even if the company offers a health care plan. That was put in explicitly to avoid companies going for ‘skinny’ care plans.

    Of course, this just introduces another unintended consequence and risk for employers – even if they think they are complying with the act and providing decent insurance to their employees, every employee who chooses to go to the exchanges will cause the company to be fined $3,000.

    This seems like a better deal than the $2,000 fine the companies will pay for every employee if they don’t offer any insurance at all, but that’s not necessarily the case if the employees are in a collective bargaining unit and walk away from your health care as a group.

    For Example: A company spends $200,000 for health insurance for 100 employees. The employees don’t like the coverage, and threaten to leave en masse for the exchanges. If they all go, you’ll pay an additional $300,000 fine. That’s a lot of leverage.

    • #3
    • May 24, 2013, at 3:19 AM PDT
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  4. Pilli Inactive

    former White House health adviser Robert Kocher. “Our expectation was that employers would offer high-quality insurance.”

    These guys don’t have a clue. Forcing the cost of health insurance to go through the roof, promising a penalty if insurance isn’t provided and then blinking in amazement when a company figures out a way to save money by doing neither…just clueless.

    They think a business is a charitable organization by employers for employees.

    • #4
    • May 24, 2013, at 3:28 AM PDT
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  5. Pony Convertible Member

    Most large companies already offer insurance to their employees. I challenge you to find a Fortune 500 company that doesn’t. They did this even though the government penality for not offering insurance is was $0. Why would they change their insurance coverage of the penality goes from $0 to $2000? Companies offer insurance to attract employees. If my employer dropped by insurance coverage without increasing my pay to cover the difference, I would quit. So would others. Companies do not offer insurance to avoid government taxes or as charity to employees. It is simply part of the compensation package that they offer to attract the workers they need. For those who already offer their employees insurance, the $2000 tax will not change this.

    • #5
    • May 24, 2013, at 4:38 AM PDT
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  6. Profile Photo Member
    Caryn: The crazy thing is that most of us can–and used to–pay for the preventative stuff ourselves and really only need insurance for the big, catastrophic eventualities. Now it’s all upside down, thanks first to mandates, followed by stupid, stupid Obamacare.

    It is infuriating!

    What’s really stupid is that preventative medicine costs more to insure than to pay out of pocket, so the employees are also getting ripped off.

    This should be remembered when someone brings up the insurance companies support for Obamacare in its defense.

    • #6
    • May 24, 2013, at 7:04 AM PDT
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  7. Pejman Yousefzadeh Inactive
    Pejman Yousefzadeh

    Come now, that’s terrible unfair. After all, they had expectations! And that’s what matters in the end, no?

    Pilli:former White House health adviser Robert Kocher. “Our expectation was that employers would offer high-quality insurance.”

    These guys don’t have a clue. Forcing the cost of health insurance to go through the roof, promising a penalty if insurance isn’t provided and then blinking in amazement when a company figures out a way to save money by doing neither…just clueless.

    They think a business is a charitable organization by employers for employees. · 6 hours ago

    • #7
    • May 24, 2013, at 9:36 AM PDT
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