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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.”