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Employers Eye Bare-Bones Health Plans Under New Law

Wall Street Journal (05/20/13) Christopher Weaver; Anna Wilde Mathews

Companies are starting to realize that they may be able to avoid some penalties under the Patient Protection and Affordable Care Act by offering very limited plans that can lack key benefits such as hospital coverage. Such policies cover minimal requirements such as preventive services, but often little more, and don’t cover surgery, X-rays, or prenatal care. It is not clear how many companies will adopt such plans. However, a handful of companies have signed on.

Although companies would avoid the broader $2,000-per-employee penalty for all employees not offered coverage, they could still face a $3,000 individual fee for any employee who opts out and gets a subsidized policy through a state exchange.

The approach could appeal to companies with low-wage employees such as retailers and restaurants, because many employees may not want to pay the cost of more robust exchange coverage.