likely to offer limited benefit plans. Retail or chain restaurant
employers frequently offer limited benefit plans that contain less
comprehensive coverage and annual dollar limits on how much workers
can receive in health coverage. The premiums for these limited benefit
policies (known as mini-meds) are significantly lower than for
policies with comprehensive coverage and are more affordable for lower
wage workers and their families. In exchange for the low premiums,
these policies generally come with high deductibles and annual dollar
caps as low as $2,000. In addition, in many cases, employees are
paying the full cost of the insurance policy, with no help from their
employer.
The good news is that mini-meds will be eliminated in 2014, thanks to
provisions that phase out insurance companies' use of annual limits
between now and 2014. The "phase out" has already begun to kick in,
and in 2014 when annual limits are completely eliminated, consumers be
able to purchase health insurance in state-based Exchanges -- new
competitive marketplaces – where consumers and small businesses can
shop for private coverage and will have the market power similar to
large employers.
The bad news is that today mini-meds are often the only affordable
option for many low-wage workers because retail and chain restaurants
rarely offer their workers options beyond these plans. And because
mini-meds are built around annual limits, estimates from employers and
insurers indicate that beginning the phase out of annual limits this
year would cause mini-med premiums to rise by more than 200 percent,
forcing employers to drop coverage and sending many low-wage workers
to purchase insurance on the more expensive individual insurance
market, where they would get an even worse deal than what they have
today. The result would be a whole new population of uninsured
Americans.
To ensure that we protect the coverage that these workers have today
until better options are available for them in 2014, the law allows
HHS, in extreme cases, to issue temporary waivers from the phase out
of annual limits. There are some important facts to remember about
these temporary waivers:
The waivers only apply to one provision of the law – the provisions
phasing out annual limits. Insurance companies and employers that
receive waivers must comply with all other parts of the Affordable
Care Act.
The waivers last one year. Insurance companies must reapply for the
waivers each year between now and 2014 when annual limits on coverage
will be completely prohibited and individuals will have more
affordable and better private insurance choices in the competitive
Exchange markets.
All employers and insurers that offer mini-med plans may apply for a
waiver if they demonstrate that there will be large increases in
premiums or a significant decrease in access to coverage without a
waiver. You can read a list of employers and insurers that have
received waivers here.
HHS also took an additional step to ensure these workers know more
about mini-med policies and the limited coverage they may be buying.
The Administration is requiring the issuers of limited benefit plans
to notify consumers in plain language that their plan offers extremely
limited benefits and direct them to www.HealthCare.gov, where they may
be able to find better coverage options. The Administration has also
restricted the sale of new mini-med policies, except under some
limited circumstances. You can read more about this new announcement
here.
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