How can medical insurers, and insurers in other health-related markets, not innovate at a time like this?
These days, the bravest, most innovative thing an individual or company in health-related markets can do may be just to keep putting one foot in front of the other on the path to getting out of the chaos.
To sell the products directly affected by the Patient Protection and Affordable Care Act (PPACA) is to gain a deeper understandng of what it was like for Alice to fall down Lewis Carroll’s rabbit hole.
Readers in the health insurance industry might be forgiven for pleading, “Couldn’t we have some plain vanilla products that stay exactly the same for, oh, a week?”
But, for National Underwriter Life & Health’s inaugural “Insurance industry product innovation feature,” we found three categories of products that are, in our opinion, even less like the others than all of the others.
People in the benefits market have been talking about a mysterious new breed of “skinny health plans” for years. Now Fringe Benefit Group has come out with a real-world example: A plan that may not help an employer meet the Patient Protection and Affordable Care Act (PPACA) requirements for providing “affordable” coverage with a “minimum value,” but do help the employer meet the PPACA requirement to provide “minimum essential coverage.” Access to MEC – or benefit plans tailored to shield workers from the PPACA individual mandate penalty – can help moderate-income part-time workers and hourly workers avoid paying the PPACA individual mandate penalty.
Offering MEC can also give an employer some protection against PPACA employer mandate penalties.
PPACA calls for the Internal Revenue Service to impose two types of penalties on large employers with weak health benefits.
The first penalty is a payment equal to $2,000 times the number of full-time workers, minus $60,000, for employers that fail even to provide MEC, if any employee without access to MEC gets coverage from a PPACA exchange.
The second penalty applies to employers that offer MEC, but not access to affordable coverage that covers at least 60 percent of the actuarial value of the PPACA “essential health benefits” package. That penalty is equal to just $3,000 times the number of full-time employees who sign up for PPACA exchange coverage and end up qualifying for PPACA premium tax credits.
Fringe Benefit Group believes its new plan can help employers avoid paying the first type of penalty. The company was previously known for selling mini med plans, or limited benefit health plans, designed for part-time workers and poorly paid hourly workers. PPACA gutted the mini med market by banning lifetime and annual benefits limits, and by requiring every health insurance policy to cover at least 60 percent of the actuarial value of an extensive essential health benefits package.
Fringe Benefit Group is trying to offer a product aimed at the kinds of employers and workers that were using the mini med coverage. The MEC plan would consist mainly of a self-insured MEC plan that covers 100 percent of the cost of the basic PPACA preventive services package. It’s offering the MEC plan in a package that includes a variety of other products, such as hospital indemnity insurance.
Health care sharing ministries
Modern health care sharing ministries have been around since the 1960s, but the PPACA has cast them in a bright new light. The PPACA individual “shared responsibility” provisions call for the IRS to impose a penalty on many individual taxpayers who have no health insurance, or too little coverage, starting this year.