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Administration Seeks to Close ACA Loophole for Plans Without Hospitalization Benefit

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Administration Seeks to Close ACA Loophole for Plans Without Hospitalization Benefit

November 7, 2014

On Tuesday, the Obama administration said that it plans to close a "loophole" that allows large employers to offer plans that do not include hospital coverage. The Treasury Department issued a notice saying that plans without "substantial coverage for in-patient hospitalization services" do not meet the laws "minimum value" threshold. The notice indicated that the Treasury Department will issue final regulations next year to clarify the requirement for these services to be covered in plans that are ACA-compliant. 

Large company plans are not required under the law to meet "essential health benefits" standards, which include hospital services. However, most analysts assumed that hospital care would be included in another calculation required by the law and that the insurance would pay for at least 60 percent of expected medical costs. A hard look at the numbers determined that this would not be the case. 

The employer mandate requiring large employers to cover employees is currently set to go into effect in 2015. 

Source: Kaiser Health News