Skinny Plans for Over 50 Full Timers?

[HealthGuy]

It has been referenced in other threads on the forum and I have heard this from several employers who have over 50 full time employess... Supposedly in Obamacare there is a provision for employers with over 50 full time employees to offer "skinny" or "junk" mini med type plans that don't necessarily comply with the Obamacare law, but allow the employer to avoid the penalty for not offering a qualified (compliant) health plan.


What gives? This makes no sense to me...can someone easily explain this? Is this another glitch in the law? What am I missing here?

 

[houcoogster]

It has been referenced in other threads on the forum and I have heard this from several employers who have over 50 full time employess... Supposedly in Obamacare there is a provision for employers with over 50 full time employees to offer "skinny" or "junk" mini med type plans that don't necessarily comply with the Obamacare law, but allow the employer to avoid the penalty for not offering a qualified (compliant) health plan.


What gives? This makes no sense to me...can someone easily explain this? Is this another glitch in the law? What am I missing here?

Nope, not a glitch....it's a feature

As long as it covers MEC, it's good to go. Ratt N' Roll

 

[HealthGuy]

Ok, so it covers MEC crap like prev. care...right? But only like say 1,000 of an outpatient surgery (caps payments ) on stuff like this? some more clarification please...I don't know how this glitch can be allowed either, this law is so inconsistent...flawed everywhere...nothing in the law seems to be equally applied to everybody.

 

[Ann H]

A few facts first will help answer the question.

1. If you are a large group (with 50+ Full-time Employee Equivalents), you do not have Bronze, Silver, Gold or Platinum tiers. For these large groups, "adequate" is 60% actuarial value or more.

2. Penalty A - If you do not offer insurance at all you have a penalty ($3,000 per full-time employee less the first 30). This is often referred to as Penalty A.

3. Penalty B - If you offer insurance, but it is not affordable or "adequate" (60% actuarial value), you have a different penalty ($2,000 for every full-time employee who gets a subsidy, but not more than Penalty A).​

So, how do you get around a penalty? Clearly moving people to part-time, since insurance is only based on full-time and the penalties are only based on full-time.

But what if there's no way you can move that many people to part-time?

The triad.
1. Offer a really crappy plan to get out of penalty A (the penalty for not having insurance at all).
2. Offer a kind of crappy plan, but it meets adequate and affordable levels, to get out of penalty B. Make your employer contribution based on this plan. Make it "affordable".
3. Then offer a much better plan, that employees can buy-up to, whether the premium is affordable or not.

Now, you have no penalties, but you've also steered employees into coverage that isn't quite as expensive for the Employer contribution. Note - I'm not recommending that you do this mind you, I'm just answering the question!!!

So, what's the really crappy plan? It's being called an MEC plan (minimum essential coverage), but it shouldn't really be called that. The deal is that the law made a mistake in defining Minimum Essential Coverage. For individuals and small groups it's the Bronze level. For people on government plans, it's the government plan (like Medicare, Medicaid, etc.) But for large groups, it's a really super skinny, anorexic, almost dead mini-med plan. It's ugly. But it's cheap, and it satisifies Penalty A.

 

[houcoogster]

I'm not a fan of mini meds but I'm a bigger anti-fan of people losing their jobs. So if this little loop hole keeps people working I'm glad its there.

 

[HealthGuy]

OMG Ann, this is very confusing...so what you are saying ( I'm assuming) is that employers over 50 full time employees just have to offer a plan that meets 60% of actuarial value...and work around the law with this as a base plan..but isn't this really a bronze level plan with a 6350 stop gap per person, or are these 60% plans worse, that is, more out of pocket allowed?

 

[houcoogster]

Check out this thread.....started by yours truly.

http://www.insurance-forums.net/for...ig-news-i-just-heard-skinny-plans-t53082.html

 

[HealthGuy]

Funny I posted on your thread a long time ago and don't remember doing it. No surprise there LOL

 

[Ann H]

Check out this thread.....started by yours truly.

http://www.insurance-forums.net/for...ig-news-i-just-heard-skinny-plans-t53082.html

Oh, wow, go figure. I guess I posted on that thread essentially what I just posted on this one. Well, you know the memory is the second thing to go.......

 

[Happy Texan]

Check out a recent blog on theincidentaleconomist.com
Timothy Jost, who is one of the main commenters on healthaffairs.org commented that this loophole of offering a skinny plan along with a fat plan was not available.
Don Levit