Remember why the Affordable Care Act (ACA) exists? One of its basic goals was to define a minimum standard for the benefits consumers receive when they sign up for health insurance. The intent is good, but it turns out there’s a problem. The online calculator that employers can use to determine if their plans meet ACA standards apparently has a glitch.
Little glitch, big implications
Self-insured employers have to prove their plans are adequate. One way to do that is to use the “minimum value” calculator on the Department of Health and Human Services website. Employers check a box beside each of the benefits they’re offering; then they plug in the amount employees have to contribute toward the cost of care. The calculator tells them whether or not their plan meets minimum standards.
Reportedly, a flaw in the calculator has told dozens of employers they’re in the clear, when in fact, the plans they’re offering lack rudimentary benefits. Thus, these employers are heading into 2015 with substandard plans, without facing any of the penalties the ACA put in place to prevent exactly that.
Who suffers? Employees. If workers want better coverage – coverage that actually meets minimum ACA requirements – they’ll have to pay for it themselves. That’s because they’re not eligible for a health care subsidy. After all, their employer is on the books as providing “adequate” coverage.
Insurance experts advise caution
While Health and Human Services is aware of the glitch, they have not yet fixed it. Still, experts urge employers to resist the urge to save a buck by gaming the system. Here are three reasons to take that advice.
1. This loophole is not here to stay. This is a temporary glitch, not an actionable opportunity. Eventually, it will be resolved. How could it not? “Employer insurance without hospital coverage ‘flies in the face of Obamacare,’ said Liz Smith, president of employee benefits for Assurance, an Illinois-based insurance brokerage” (source).
2. The consequences may catch up later. Employers who go for short-term gain at their employees’ expense may suffer for it down the road. When the glitch is resolved, will these employers face severe retroactive fines? It’s possible.
3. This is not a harmless indiscretion. While employers can save a buck in the short run, workers bear the cost of that indiscretion directly. For some employees, it’s a cost they simply can’t afford.
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