Critics of the Patient Protection and Affordable Care Act (PPACA) once warned that the law would decimate mini-med plans – that is, until the U.S. Health and Human Services Department (HHS) issued regulatory guidance.
These plans, which are available on an employee-pay-all voluntary basis, have taken center stage in the ongoing debate about how best to comply with health care reform.
A recent blog item from sister publication Employee Benefit News suggested that offering a mini-med and applying for an HHS waiver could help employers escape a key provision that bars annual limits on health coverage. As 2010 came to an end, 733 waivers were approved from just 30 or so in October.
But don’t necessarily expect plan sponsorship to spike. Anita Potter, assistant vice president of LIMRA product research, doesn’t foresee an increase in mini-med plan sales because of their connection to PPACA.
"Employers will be reluctant to provide a new coverage knowing that there will be a very real possibility that the benefit will have to be dropped in a couple of years in order to comply with the law,” she explains. "The waivers were initially granted as a way to avoid significant increases in premiums or declines in access to benefits, so I do not really see this as a way around compliance, since the waivers were merely intended as a stop-gap measure. Mini-med plans will, no doubt, remain in limbo until the uncertainty surrounding health care reform plays out."
In fact, the HHS waivers are limited in scope and duration, observes Amy Bergner, a partner in Mercer’s Washington Resource Group.
She says "they allow mini-med plans to have higher annual dollar limits on essential health benefits than would otherwise be permitted under health care reform, are available only for one year and are granted only if compliance with the annual dollar limit rules would result in a significant decrease in access to benefits or a significant increase in premiums."
Adds Michael Thompson, a principal and health care practice for PricewaterhouseCoopers LLP in New York: “The required changes to mini-meds will be much more palatable for both employers and consumers in 2014 when there will be subsidized, guaranteed issue coverage available in the market.”
One of the latest waivers to garner media attention in recent weeks involves the CoverTN limited-benefit plan, which BlueCross BlueShield of Tennessee administers for the state of Tennessee. The Blues plan made its request to HHS officials in partnership with the state.
It’s the only plan among Cover Tennessee’s state-run health program affected by the minimum annual benefit limit of $750,000 starting in 2011 under PPACA, according to Joe Burchfield, a spokesman for the group, which insures 20,000 people. CoverTN has a $25,000 policy limit.
The minimum annual limit is slated to increase each year until 2014, when state-run insurance exchanges take effect and annual or lifetime limits on health coverage are abolished.
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