Large Employers Eye

Large Employers Eye "Skinny" Health Plans to Mitigate ACA Costs

You are here

Large Employers Eye "Skinny" Health Plans to Mitigate ACA Costs

August 14, 2014
A recent survey released by the National Business Group on Health found that approximately one in six large employers, defined by the Affordable Care Act (ACA) as having more than 50 full-time employees, said that they will offer a low-benefit ("skinny") coverage plan which does not comply with the ACA, in addition to a fully compliant benefit plan. The employer mandate in the ACA requires that large employers offer employees "affordable" health care coverage, which is defined as coverage that carries an employee premium of no more than 9.5% of the annual salary and that meets certain minimum standards. There is nothing in the law that would prohibit employers from also offering coverage that does not meet these minimum standards, as long as employees are presented with the ACA-compliant option. 
 
Workers may find the skinny plans an attractive alternative to plans that offer more comprehensive coverage because they would cost less, but would still meet the "minimal essential coverage" of the ACA that would allow them to avoid an individual penalty. Individuals whose employers offer skinny plans alongside ACA-compliant plans would not be able to receive subsidies to purchase insurance in the state marketplaces, which could also steer them towards opting for an employer-sponsored plan. 
 
The survey also showed that large companies often prefer high-deductible health plans with options for workers to shop around for care. According to the survey, 32% of companies intend to offer a consumer-directed plan exclusively.