Employers Offering 'Skinny' Coverage to Avoid High Obamacare Fines

Image: Employers Offering 'Skinny' Coverage to Avoid High Obamacare Fines Basics such as X-rays will not be covered under many employers' minimal-coverage healthcare plans.

Monday, 20 May 2013 09:44 AM

By Sandy Fitzgerald

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Some companies are avoiding Obamacare penalties by offering "skinny" insurance plans that provide employees with minimum coverage such as preventive care but little else, including benefits to help cover hospitals stays.

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 are recognizing they can avoid a $2,000-per-worker penalty by providing such policies, even though the plans often don't cover basics such as surgery, X-rays, or prenatal care, let alone hospitalization.

The employers still could face penalties, but they expect them to be less than the the $2,000 per worker for opting out of Obamacare. As a result, the Journal reported, more companies are seeking minimum-coverage plans and creating what amounts to a new industry of basic-insurance brokers and benefit administrators pushing the plans to clients.

Some low-benefit plans will cost employers as little as $40 to $100 per employee monthly, the Journal noted.

"For certain organizations, it may be an ideal solution to minimize the cost of opting out," David Ellis, chief executive of Youngtown, Ariz.-based LifeStream Complete Senior Living, told the Journal.

Ellis said his firm, which employs about 350 people, may consider the low-benefit plan in order to comply with the law.

Department of Health and Human Services officials say they have seen little evidence of companies switching to the skinny plans, and that most employers are choosing to provide better benefits.

In addition, the limited plans may not appeal to all workers – and could backfire on employers.

While they would avoid the $2,000 fine, they still could be fined $3,000 for each employee who chooses not to take the company coverage and buys insurance through a state healthcare exchange.




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