The law is nearly silent on what employers need to include in their health plans. | Reuters
The idea is that far fewer employees will go to the exchanges if they have an affordable alternative in the workplace.
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.