Some employers said that leaving out hospital coverage helped protect low-wage workers from big deductibles.
Closing what many see as a loophole that could trap millions of people in sub-standard insurance, the Obama administration said Tuesday that large-employer medical plans lacking hospital coverage will not qualify under the Affordable Care Act’s toughest standard. It also offered relief to workers who may be enrolled in those plans next year.
The administration will rule that plans without “substantial coverage for in-patient hospitalization services” do not meet the law’s “minimum value” threshold, the Treasury Department said in a notice. It will issue final regulations saying so next year, it said.
“It’s good news for employees,” said Sabrina Corlette, project director at Georgetown University’s Center on Health Insurance Reforms. “They shouldn’t be stuck with subpar coverage.”
Hundreds of employers with low-wage workers such as retailers and temporary-staffing companies have been preparing to offer such plans for 2015, the first year large companies are liable for fines if they don’t provide minimum coverage.
Unlike insurance sold to individuals and small employers, large companies aren’t required to offer the health law’s “essential health
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