A health plan without hospital benefits is "is not a health plan in any meaningful sense," the Department of Health and Human Services (HHS) announced in a final rule last week. HHS has found that plans that lack substantial hospital benefits do not qualify as "minimum value" coverage under the Affordable Care Act and has blocked such plans from being offered.
The move mostly affects large employers in retail, restaurant and other low-wage industries who offered these plans in order to meet their obligations under the ACA. The healthcare reform law presented a loophole for employers to work around the ACA's standard of employer-sponsored coverage by offering lower-than-average plans, reported Kaiser Health News.
Under the ACA, there is no way to specify essential health benefits for employer-sponsored plans, even though there is for individual and small-business plans. The only way to ensure a plan meets the minimum value is to use the online calculator--which, at first, gave passing scores for subpar plans, added the article.
HHS now wants plans to disregard the calculator and pay for hospital benefits despite their online score.
"What remains a mystery is whether the calculator was at fault," Alden Bianchi, a lawyer who advises many companies that were considering such plans for 2015, told KHN. "The regulators don't say. Rather, they take the [position] (not unreasonable or nutty, in my view at least) that a plan with these services is not real health insurance."
The final rule issued by HHS ends an ongoing debate that began in 2014. After the agency found many plans did not fulfill the minimum value requirement, HHS proposed a rule that would would apply to companies with at least 50 employees and require them to provide substantial coverage of both inpatient hospital services and physician services, FierceHealthPayer previously reported.
However, while certain industry experts believe it's feasible to design an employer-sponsored health plan that meets the standard minimum value requirements without covering hospitalization services, this was not intended under the healthcare reform law. These in-patient hospitalization and physicians' services are the heart of the ACA health plans.