'Skinny' plans may provide minimum essential coverage

Certain "skinny" insurance plans not specified in the Affordable Care Act or designated by regulation as minimum essential coverage may now meet minimum coverage requirements, exempting enrollees from penalties for underinsurance or lack of insurance, LifeHealthPro reported.

This news comes from an informational bulletin from Gary Cohen, deputy administrator and director of the Center for Consumer Information & Insurance Oversight (CCIIO).

The U.S. Department of Health & Human Services would like to see minimum essential coverage plans meet "substantially all" of the standards that ordinary, non-grandfathered individual major medical policies must meet starting in 2014, LifeHealthPro noted.

However, "HHS also foresees that there may be situations where recognition of a plan as minimum essential coverage is reasonable and appropriate even where the plan does not meet the 'substantially all' standard," Cohen said Thursday in the bulletin. "Accordingly, plans that do not meet all of the foregoing requirements will be evaluated on a case-by-case basis."

The ACA labels many types of plans as minimum essential coverage, including employer-sponsored plans, ACA-compliant individual policies and "grandfathered" major medical plans that have remained largely unchanged since March 23, 2010. HHS added Medicare Advantage coverage to the list, along with foreign coverage for individuals who are out of the United States for at least one day per month.

What about rules applicable to business owners, including sole proprietors, partners and partners in limited liability companies?

"Any plan, fund, or program that would be minimum essential coverage with respect to an individual but for the fact that the coverage is provided to business owners" will count as minimum essential coverage for the owners, Cohen said.

Cohen's announcement comes on the heels of nation-wide cancelations of private insurance plans that failed to meet the government's minimum essential coverage requirements.  

Though an expanded definition of minimum essential health coverage may exempt many from tax penalties, the IRS may not be prepared to penalize Americans who fail to meet ACA requirements, FierceHealthFinance recently reported.

For more:
-  read the LifeHealthPro article
-  see the CCIIO bulletin (.pdf)

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