Federal agencies have released draft regulations that could give birth to a major new type of supplemental health insurance product — “limited wraparound coverage.”
The proposed regulations would let insurers sell employer-sponsored plans designed to beef up benefits for workers who get their coverage from the Patient Protection and Affordable Care Act (PPACA) public exchange system.
An employer could use a wraparound plan to make sure that workers who used public exchange qualified health plan (QHP) individual or family coverage could get access to benefits comparable to the benefits offered by the employer’s own group health plan.
PPACA is set to require large employers to offer affordable coverage with a minimum value to full-time employees, but the law will not really require employers to offer that coverage to all employees. At first, regulators would only require employers to offer coverage to 70 percent of employees. Employers would not have to offer any “minimum essential coverage” to part-time employees.
Three federal agencies — the Internal Revenue Service (IRS), the Employee Benefits Security Administration (EBSA), and the U.S. Department of Health and Human Services (HHS) — want to create a pilot program that would let insurers and employers try selling exchange QHP supplement products.