NAHU Washington Update - 08/15/2014  (Plain Text Version)

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In this issue:
•  CMS Has Been Busy
•  HHS Senior Leadership Keeps Growing
•  Large Employers Like Skinny Plans
•  Check out Our New FAQs
•  What We're Reading

 

Large Employers Like Skinny Plans

The National Business Group on Health released a survey earlier this week that found nearly 16% of large employer group plans will offer their employees at least one health plan that does meet the individual mandate's coverage standard (known as minimum essential coverage) but does not meet PPACA's minimum value and affordability standards (what the employer needs to offer to completely inoculate itself from employer mandate penalties) in the year ahead...

The National Business Group on Health released a survey earlier this week that found nearly 16% of large employer group plans will offer their employees at least one health plan that does meet the individual mandate's coverage standard (known as minimum essential coverage) but does not meet PPACA's minimum value and affordability standards (what the employer needs to offer to completely inoculate itself from employer mandate penalties) in the year ahead. Most of these employers will also offer an affordable, minimum-value choice too, but some may only offer a minimum essential coverage option.

Some believed that skinny plans would be a thing of the past once PPACA was fully implemented, but we’ve always anticipated that PPACA would make skinny plans more prevalent because most consumers, especially inexperienced ones, value cost over actual benefits. NAHU has been a long supporter of choice in the health plan marketplace, which includes skinny plans, under the condition that consumers know what their skinny plan actually covers.

The survey used data from 136 large employers across the nation, 80% of which have 10,000 or more employees. While the surveyed industries are unknown, we can guess that the 16% offering lower-benefit plans likely also have low-wage employees. The survey also found that employers are implementing consumer-directed health plans and expanding wellness initiatives, as well as increasing employee cost-sharing and encouraging spouses to get coverage their own employers as a way to cut costs. Employers predict that these measures will help slow the projected increase in healthcare costs next year to five percent from 6.5 percent, the survey found. It is also likely that larger employers are thinking ahead to 2018 when the Cadillac Tax, the 40% excise tax that will be imposed on the value of health insurance benefits exceeding a certain threshold, will come into play. Many large employers are doing what they can now to either delay when the tax will actually hit or avoid it altogether. Many major companies feel that they will eventually trigger the tax. It is just a matter of when.