Obamacare Glitch Lets Employers Offer Substandard Insurance

Employers are taking advantage in flaws in the Obamacare calculator for ensuring the healthcare plans they offer meet federal standards, and as a result they’re offering plans that lack vital benefits such as hospitalization coverage, insurance brokers and consultants say.

Companies who are enrolling workers for coverage next year are offering inexpensive plans that allow them to avoid penalties for not offering any coverage at all, reports Kaiser Health News.

Such a strategy “flies in the face of Obamacare,” Liz Smith, president of employee benefits for Illinois-based insurance brokerage Assurance said.

But workers have little choice rather than to accept their employers’ substandard plans as no federal tax credits are available for people who can buy insurance through their companies’ approved plans.

The minimum-value calculator is an online tool offered by the Health and Human Services Department that self-insured insurers can use to certify that their plans pass federal standards that require they pay at least 60 percent of the total cost of medical services for standard population. Employers that can pass the calculator’s ratings and can avoid being fined as much as $3,000 per uninsured employee in 2015.