By Jay Hancock
Thu, Sep 25 2014
Lance Shnider is confident Obamacare regulators knew exactly what they were doing when they created an online calculator that gives a green light to new employer coverage without hospital benefits.
“There’s not a glitch in this system,” said Shnider, president of Voluntary Benefits Agency, an Ohio firm working with some 100 employers to implement such plans. “This is the way the calculator was designed.”
Timothy Jost is pretty sure the whole thing was a mistake.
“There’s got to be a problem with the calculator,” said Jost, a law professor at Washington and Lee University and health-benefits authority. Letting employers avoid health-law penalties by offering plans without hospital benefits “is certainly not what Congress intended,” he said.
As companies prepare to offer medical coverage for 2015, debate has grown over government software that critics say can trap workers in inadequate plans while barring them from subsidies to buy fuller coverage on their own.
At the center of contention is the calculator — an online spreadsheet to certify whether plans meet the Affordable Care Act’s toughest standard for large employers, the “minimum value” test for adequate benefits.
The software is used by large, self-insured employers that pay their own medical claims but often outsource the plan design and administration. Offering a calculator-certified plan shields employers from penalties of up to $3,120 per worker next year.
Many insurance professionals were surprised to learn from a recent Kaiser Health News story that the calculator approves plans lacking hospital benefits and that numerous large, low-wage employers are considering them.
Although insurance sold to individuals and small businesses through the health law’s marketplaces is required to include expensive hospital benefits, plans from large, self-insured employers are not.
Many policy experts, however, believed it would be impossible for coverage without hospitalization to pass the minimum-value standard, which requires insurance to pay for at least 60 percent of the expected costs of a typical plan.
And because calculator-approved coverage at work bars people from buying subsidized policies in the marketplaces that do offer hospital benefits, consumer advocates see such plans as doubly flawed.
Kaiser Health News asked the Obama administration multiple times to respond to criticism that the calculator is inaccurate, but no one would comment.
Calculator-tested plans lacking hospital benefits can cost half the price of similar coverage that includes them.
While they don’t include inpatient care, the plans offer rich coverage of doctor visits, drugs and even emergency-room treatment with low out-of-pocket costs.
Who will offer such insurance? Large, well-paying employers that have traditionally covered hospitalization are likely to keep doing so, said industry representatives.
“My members all had high-quality plans before the ACA came into existence, and they have these plans for a reason, which is recruitment and retention,” said Gretchen Young, a senior vice president at the ERISA Industry Committee, which represents very large employers such as those in the Fortune 200. “And you’re not going to get very far with employees if you don’t cover hospitalization.”
source : Debate Grows Over Employer Plans With No Hospital Benefits
