The Affordable Care Act (ACA) aims to provide millions of Americans with options of affordable and comprehensive health insurance. As per the latest count from the Department of Health and Human Services (HHS), more than 7.3 million people will currently get enrolled (with the open enrollment period beginning on November 15) and approximately 13 million people will get fully covered by the end of this enrollment date.
Under the Affordable Care Act (ACA), those companies that fail to comply with the new mandate to offer health insurance coverage to employees are likely to face fines next year. However, many companies are devising new strategies such as enrolling employees in Medicaid so as to avoid these penalties and hold down costs. The ACA penalty (for companies employing more than 100 employees) which was supposed to begin this year has been postponed until 2015. Reports suggest that the penalties can amount to about $2000 per employee.
With employers searching for new ways to cover their full-time workers while curtailing costs, insurance brokers and other administrators are exploiting the different options in the law to find a variety of new choices. The Medicaid option is drawing significant attraction from companies with low wage workers. Government-funded health plans are more affordable for employees and less costly for employers. With increasing number of health insurance enrollees, practices now have to brace for more hectic medical billing and coding activities.
How Skinny Health Plans Benefit Employers
Another significant development is that employers are offering “skinny” health plans that essentially cover only preventive care but exclude major benefits such as hospital coverage. Even though these plans offer a narrow range of benefits, they don’t limit payouts.
Offering such plans to workers may enable companies to avoid penalties up to $2000 per worker for not providing coverage to at least 70% of their full-timers. Workers who get enrolled in such health benefit plans may not face the law’s penalties for individuals lacking medical insurance.
While these skinny health plans don’t meet the specified federal standard of covering 60% of the cost of medical care, they can still leave an employer exposed to a fine of $3000 per worker who opts out and receives a federally subsidized plan via an insurance exchange. However, workers are not eligible to receive subsidies if their company provides insurance that meets the ACA standards of coverage. For instance, popular insurers like United Health Group Inc. and Cigna Corp are marketing skinny plans. These insurers offer these plans beside other prominent alternatives so that consumers can better understand and make quality healthcare coverage choices. Even though companies have shown a good level of interest in these plans very few have adopted them in the real sense.
The officials in the healthcare domain have raised their voice against skinny plans. These healthcare experts feel that there is no point in offering skinny health plans if coverage does not protect them when they get sick. With the open enrollment period starting this November, most companies have already started offering full medical coverage as per the ACA norms. Those companies that remain concerned about fines are largely in industries with low wage workforces and include restaurants, nursing homes and the hospitality sector.
Since the rule necessitates employers to provide coverage to only full-time workers and not to offer the same to part-time staff, many companies have been hiring part-time workers. As per the ACA, a person who works for 30 hours per week (or 130 hours per month or more) is a full time staff and one who works less than 30 hours per week is a part-time staff. Moreover, many firms have reduced the working hours of their staffs to 29 hours to have more part-time employees and fewer full-time laborers.