Obama administration likely to block plans excluding hospital benefits, sources say


The Obama administration will likely kill an option under the Affordable Care Act that lets large employers offer health plans that exclude hospital benefits, sources told Kaiser Health News.

Officials from the Department of Treasury allegedly are taking action to prevent the creation and sale of such plans by the end of the year. Although the Department of Health and Human Services designed the calculator, which is an online spreadsheet that determines whether plans meet ACA minimum benefit requirements, the Treasury Department is responsible for enforcing the standard. 

Currently, the ACA allows large, self-insured employers to offer plans that exclude expensive hospital benefits. These plans typically have no deductibles for doctor visits and prescriptions, very inexpensive co-payments and emergency room visits that cost between $250 to $400, FierceHealthPayer previously reported.

"My best guess is that they will kill them," said Frasier Ives, a benefits consultant for Wells Fargo Insurance, who has talked to Treasury officials about the matter. "The only question is when they are going to make it effective."

And Alan Tawshunsky, a senior attorney with the Treasury department, said the calculator is under "active review" during an American Bar Association meeting last week, Mark Holloway, a benefits attorney for broker Lockton Companies, told KHN.

"It seems pretty clear to me that the calculator will be changed" to require hospital coverage, added Holloway, who was at the ABA meeting. "It's just a question of when, and whether any protection is given to employers who used the old calculator" to design coverage for 2015.

Edward Lenz, senior counsel for the American Staffing Association, met with senior Treasury officials. Although they didn't specifically say what they will do about plans lacking hospital coverage, "our strong sense is that they will issue guidance before the end of the year [that] will say that plans that don't offer hospitalization don't qualify as minimum value," Lenz told KHN.

To learn more:
- read the Kaiser Health News article

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