When the Affordable Care Act (ACA) was written, it set a “minimum value” standard on all health plans by saying a health policy must cover 60 percent of the cost of the “benefits provided by the plan,” but the text failed to specify which benefits must be offered.
This week the Internal Revenue Service (IRS) filled in the void by saying all minimum value — or so-called “skinny” — plans that “fail to provide substantial coverage for in-patient hospitalization services or for physician services (or for both)” do not meet ACA standards.
Prior to this ruling, some employers and health insurance consultants had used a minimum value calculator offered by the Department of Health and Human Services (HHS) to achieve 60 percent coverage without offering hospitalization and physician services. These plans can no longer be issued, the IRS says, without triggering potential assessments under the ACA. Current “skinny” plans will be exempt from penalties through March 1, 2015.
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