The federal calculator used to determine whether an employer-sponsored insurance plan provides minimum value under the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) appears to be malfunctioning, according to benefits experts who are eagerly awaiting guidance from the Treasury Department on a possible fix. The online calculator is approving employer-sponsored insurance plans that offer employees coverage for doctor visits and prescription medicines, without requiring corresponding hospitalization coverage, the experts said.
Federal certification of plans without adequate hospital benefits can harm employees who would be prohibited from using federal subsidies to seek better coverage in the PPACA marketplaces, said Mark Holloway, a benefits attorney for insurance broker Lockton Companies, based in Kansas City. Most companies that self-insure have roughly 200 to 300 employees, but companies can be far larger, he said. Developed by the U.S. Department of Health and Human Services for companies with more than 50 employees, the calculator can be found at https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/mv-calculator-final-4-11-2013.xlsm.
“Theoretically, it is possible to design a plan that does not have hospitalization coverage that meets the 60-percent minimum value threshold and as long as the premium for single coverage is less than 9.56 percent of a person’s income, then the person is going to be locked out of getting any kind of subsidized coverage on the exchange,” Holloway explained. “If they can’t go to the exchange and get a subsidy, then you, the employer, can’t get hit with a $3,000 penalty (under the shared responsibility provisions of the PPACA). The game is, if you offer this minimum value plan that’s affordable, you’ve made yourself bulletproof,” he said. Many companies have already designed and offered plans to employees that take will take effect in January 2015, but those efforts might be disrupted if the federal government makes changes, he added.
Treasury, HHS Officials Quiet
Officials from the Departments of Health and Human Services (HHS) and Treasury have been tight lipped about problems with the calculator and their plans to fix it. HHS Secretary Sylvia M. Burwell said she was unaware of the problem with the calculator, but referred inquiries to a subordinate.
“You know, this is an issue I’m going to be honest and say I’m not familiar with this one, in terms of the minimum value calculator,” Burwell said during a morning news briefing for reporters in early October. “I think the one thing I would say is I think you know the issue that the administration is deeply focused on is making sure that people have access, and the issue of affordable and quality access.”
Alan Tawshunsky, special counsel in the Treasury’s Office of the Benefits Tax Counsel, told benefits industry experts that the PPACA minimum value calculator was under active review. Tawshunsky was asked about the issue after he spoke at the American Bar Association’s Health and Welfare Benefit Plans National Institute on October 10. He did not go into great detail about the calculator.
Provided by CCH