Security Firm Drops Coverage, 55,000 Workers Sent to Obamacare Exchanges

Thursday, 26 Sep 2013 04:48 PM

By Andrea Billups

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Even the lowest-cost health care plans are being dropped for some 55,000 employees of the nation's largest security guard provider, as it joins the ranks of the large-scale employers moving to insurance exchanges provided under the Obamacare law.

The U.S. branch of Securitas, a Swedish company, offers its employees the sort of minimal health plans that are in place at many companies, but even those are being phased out next year in favor of the government plan, The Wall Street Journal reported.

The "mini-med," plans, which typically only offer basic coverage, often cap employee benefits at $3,000 per year.

"The mini-meds go away and we're not replacing them," Jim McNulty, Securitas' U.S. operation spokesman told the Journal. "Their option is to go to the exchanges."

A July change in the law delaying penalties for a year on employers who don't offer coverage may have changed the minds of corporations on how to proceed on benefits. Securitas had previously planned to give employees a health plan with more benefits that required them to contribute more to opt in, but executives decided instead to focus on moving to 2015 when the federal law kicks in.

Mini-med plans have been used for lower wage employees at companies seeking to offer employees at least some coverage with small co-pays or deductibles required. But they typically don't cover catastrophic health problems, leaving those subscribers in trouble if they face major illness and large medical bills.

Some large U.S. companies are also dropping coverage for part-time employees working less than 30 hours per week. Among them are Home Depot and Trader Joe's.

Trader Joe's had been seen as setting an industry standard by offering such benefits as healthcare, dental and vision to part-time workers. But its CEO said in a memo on Aug. 30, that he was offering those workers $500 in January and steering them to plans available under the federal Affordable Care Act, the Post reported.

Industry analyst Robert Laszewski told Bloomberg "Obamacare is predicated on employers maintaining coverage. It’s supposed to pick up the relatively few people who can’t access health insurance because they’re self-employed or work for small employers who can’t afford it. The big guys were supposed to stay committed.”

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