Health care reform law glitch lowers coverage standards

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An issue with the federal certification calculator makes it possible for employers to provide substandard plans.

A glitch has been found in the federal calculator that certifies that insurance plans are up to the standard of the health care reform law, and this is causing many large employers to offer their workers plans that do not provide coverage for some of the very basics, such as for hospitalization.

This, according to a growing number of insurance brokers and consultants who have been using the calculator.

It looks as though the calculator to ensure that the health care reform requirements are met by an insurance policy is allowing companies that are enrolling employees for 2015 to offer them cheap but substandard coverage, while still sidestepping the penalties of the Affordable Care Act, say certain consumer advocates. Professionals in the industry are quite surprised that these plans are being allowed by the calculator system.

Offering insurance to employees that does not include hospital coverage is in direct opposition to the health care reform.

health care reform newsAccording to the president of employee benefits, Liz Smith, at the Illinois based brokerage called Assurance, offering health insurance which does not cover the policyholder for hospital services and stays “flies in the face of Obamacare”.

Complicating things even further is that the employees at the companies offering these substandard health plans are not permitted to purchase more comprehensive coverage through the online insurance exchanges for individuals. People who have been offered plans through their workplace that have been approved by the calculator will not be able to obtain federal tax credits for purchasing their health insurance somewhere else – even through the federal or state marketplace.

The calculator is a tool used for certifying plans that will be offered by self-ensured employers, which means that the majority of large companies fall into this category. As is the case with insurers, themselves, self-insured employers are required to obtain official certification that states that their plans have met the minimum standards of the health care reform for providing consumer value. That said, the online minimum value calculator tool from the Department of Health and Human Services appears to be providing a passing score to plans that technically aren’t up to that level.

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