Department of Health and Human Services Issues New Rules on Bare-Bones Health Plans

Last Thursday, HHS released new guidelines for low-cost, low-benefit health plans that are expected to be phased out and replaced by more generous insurance under the Affordable Care Act.

HHS notified employers that offer these mini-med plans that they must notify enrollees of the dollar amount of the annual limit along with a description of the plan benefits to which the limit applies. These notifications must be in plain English and must be issued within 60 days of enrollment.

HHS has also issued guidelines on how business can apply for waivers that allow them to continue to offer mini-med plans. The waivers would last only one year and would only be awarded if it can be shown that either a large increase in premiums or a significant decrease in access to coverage would result from ending the plan. -- healthcare.gov

West Virginia Senator Jay Rockefeller identified the primary concern with these plans:

"It gives people a false sense of security. It lets them think they have health insurance when they really don't. By the time they realize they don't have real health insurance, it's too late." -- The Hill

As covered earlier on this blog, an estimated 1.4 million workers in the US are covered by these policies which often cap annual benefits between $2,000 and $10,000, leaving workers with little financial protection when disaster strikes. These cheap plans will be phased out entirely by 2014 but the Obama Administration has issued over 200 exemptions from the new coverage standards as businesses slowly begin complying with new health care regulations. -- CWA-Union.org

To learn more about these temporary waivers for bare bones plans, check out this FactCheck.org article which corrects the myths surrounding the waivers. -- FactCheck.org