Obamacare loophole exposed

Apparently the Obama administration was not aware of a rule allowing large companies to offer their employees 2015 health plans that don't include...

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Apparently the Obama administration was not aware of a rule allowing large companies to offer their employees 2015 health plans that don’t include hospital benefits but since learning of the loophole have moved to address it.

Senior officials within the administration have had growing concerns about the insurance industry as several consumer advocates have deemed current practices substandard as the system effectively bars workers from subsidies to buy fuller coverage outside the workplace.

Offering these minimum value benefits could potentially save companies as much as $3,120 per worker next year.

As previously reported by Kaiser Health News and The Washington Post, industry executives were surprised to see consultants selling calculator-approved plans that lack hospital insurance and cost half as much as similar coverage with hospitalization.

Employees who are offered minimum-value coverage at work, even if it lacks hospital benefits, are barred from receiving federal subsidies to buy policies in the Affordable Care Act’s online marketplaces.

The administration has not made a final decision on blocking the plans, the industry lawyers emphasized.

“My best guess is that they will kill them,” said Frasier Ives, a benefits lawyer for Wells Fargo Insurance who has talked to Treasury officials about the matter. “The only question is when they are going to make it effective.”

“These are cost decisions impacting employers,” said Anne Lennan, president of the Society of Professional Benefit Administrators, some of whose members administer the plans under scrutiny. “We’re getting close to January 1. If you’re going to change this, you have got to let people know.”

One unspoken issue is revisiting the faulty benefits calculator on the exchange could not only bring objections from industry players but also further public criticism about the health-care law’s rollout, right before national elections in early November.

“The people from Treasury aren’t stupid,” Holloway said. “They realize this is a political hot potato. I think they’re being deliberately tight-lipped about it. That kind of leaves everybody twisting in the wind.”

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