ObamaCare Loophole Spawn Skinny Plans

Unlike the plans sold through the exchanges, company-backed insurance does  not have to cover the 10 categories of services in the health care law’s  essential health benefits.

Skinny plans will have to cover preventive services like vaccines and cancer  screenings without any cost-sharing — a requirement of all insurance under the  health law. They can’t put a cap on annual benefits, as limited benefit, or  mini-med, plans typically do now. But the lack of a cap is largely symbolic  because the plans don’t cover the services that run up medical bills.

They could offer very limited coverage of hospitalizations or surgeries, for  instance, and a certain number of doctor office visits and a narrowly tailored  prescription drug benefit. The premium for these plans would be around $50 a  month, said Richard Stover, a principal in New Jersey-based Buck Consultants,  who has clients that plan to offer skinny plans next year.

That will appeal to many employees who may not need extensive coverage and  want an inexpensive way to meet the individual mandate. Under the law, anyone  who has health insurance through an employer satisfies the mandate.

And those who want more comprehensive coverage can still go to the exchanges,  where they may be eligible for subsidies depending on their income.

“That may be a better option for employees who need better coverage,” Stover  said. For those employees who do receive subsidies on the exchange, their  employers would have to pay a $3,000 penalty, but it’s likely to be a smaller  subset of the workforce, Stover said.

The most likely group of employees to be offered skinny plans next year are  those who work for employers that have mini-med plans now. About 1.4 million  Americans had mini-med plans in 2010.

At least some of those who are offering mini-med coverage now, however, will  likely follow through with their plans to help recruit new employees and keep  those who are used to having a low-cost, low-coverage option available, said  Tracy Watts, a partner in the Washington office of Mercer, a consulting  firm.

“We are going to see some of these plans,” she said.

A Treasury Department official confirmed that properly designed skinny plans  meet the requirements of the health care law.

But others who were planning to begin offering coverage for the first time  next year because of the penalties now won’t, thanks to the mandate delay, said  Anderson, who has clients who are considering the skinny plan option.

“That’s pretty much come to a screeching halt,” he said. The interest and  planning will continue, he added, but now those firms are more likely to begin  offering the plans in 2015, when the mandate takes effect, instead of  2014.