Insurers speak out against proposed wraparound benefits

America's Health Insurance Plans (AHIP) and the Blue Cross Blue Shield Assocation (BCBSA) both oppose a proposed rule that would amend the definition of excepted benefits to include wraparound coverage, reported LifeHealthPro.

The U.S. Departments of Labor, Health and Human Services, and Treasury last December released the rule, which would allow employers to use a wraparound plan to supplement policies their workers bought on the health insurance exchanges. The wraparound plans would ensure those employees receive benefits comparable to the companies' own plan, FierceHealthPayer previously reported.

But insurers are concerned about the proposal for several reasons. First, they're leery the wraparound plans might disrupt the excepted benefits market. In a letter to the federal agencies, AHIP's Cindy Goff and Thomas Wilder wrote that excepted benefits have been limited in scope, with some of the most popular ones being vision coverage and long-term care insurance.

The proposed rule, however, appears to include wraparound products that aren't limited. If those plans become popular, but are poorly designed, they could disrupt the existing major medical market, noted LifeHealthPro.

Secondly, AHIP is worried the proposed rule would establish the Office of Personnel Management (OPM) as the regulator of major excepted benefits. Since states have traditionally regulated this area, AHIP said conflicts could arise between federal and state oversight.

Meanwhile, BCBSA Kris Haltmeyer wrote in a separate comment letter that the proposed rule doesn't provide insurers with enough information about how the wraparound products would actually work. For example, he said, it's unclear how OPM would regulate the products, what types of major medical plans would accompany the products or whether companies other than insurers could offer the products, LifeHealthPro noted.

To learn more:
- read the LifeHealthPro article