3 notes on the PPACA ultra-skinny plan guidance

The IRS and HHS now say in the new notice that they will establish regulations that will classify a non-hospital plan, or a non-physician services plan, as a plan that fails to provide minimum value for purposes of complying with the PPACA employer mandate.

What does that notice really mean? Read on.

1. The notice might be complicated, but it wasn’t a surprise.

Fensholt says many expected the ruling. One problem is a provision in the notice that will require even employers with the grand-fathered non-hospital plans set up before the Nov. 4 notice publication date to tell workers that the plans don’t supply minimum-value coverage.

2. The employees will probably get good news.

For employees, the change means that they will be able to qualify for exchange plan subsidies, even if their employers offer than non-hospital plans, Fensholt says.

Image: Exchange application forms. (AP photo/J. David Ake)

3. Employers that set up non-hospital plans by Nov. 3 may still get some concrete benefits.

For employers, with the grandfathered plans, the notice means that they may get a modest, short-term reduction in benefits costs. The employers may end up paying the penalty of $3,000 per employee who qualifies for exchange coverage because of a lack of access to minimum-value coverage, but they apparently won’t have to pay the $2,000-per-full-time penalty that they would have to pay if they failed to provide any MEC at all, Fensholt says.

Fensholt notes that some staffing firms have already agreed in contracts to provide health coverage that meets minimum-value standards. Those staffing firms may have to beef up their coverage if they were counting on being able to offer a non-hospital plan, Fensholt says.