|A flaw in the federal calculator for certifying that insurance meets the health law’s toughest standard is leading dozens of large employers to offer plans that lack basic benefits such as hospitalization coverage, according to brokers and consultants.|
The calculator appears to allow companies enrolling workers for 2015 to offer inexpensive, substandard medical insurance while avoiding the Affordable Care Act’s penalties, consumer advocates say.
Insurance pros are also surprised such plans are permitted.
Employer insurance without hospital coverage “flies in the face of Obamacare,” said Liz Smith, president of employee benefits for Assurance, an Illinois-based insurance brokerage.
At the same time, a kind of catch-22 bars workers at these companies from subsidies to buy more comprehensive coverage on their own through online marketplaces. No federal tax credits for health coverage are available to people with workplace plans approved by the calculator.
The calculator is used by self-insured employers, which include most large firms.
Like insurance companies, self-insured employers must certify that their plans pass health-law standards for consumer value.
One official way to do that is to get a passing score on the Department of Health and Human Services’ “minimum-value” calculator, an online tool.
An employer checks boxes on the screen indicating what...