Subadhra Sriram's Blog

Skinny is The New Gray Under Healthcare Reform

 Obama cheerleaders have been plugging the fact that when you mandate insurance, pretty much everybody gets insurance.  But here’s the thing: what type of insurance?

That’s where wellness plans or “skinny” health plans rear their head.  These are limited --bare bones --plans that lack key benefits such as hospital coverage. But it could allow employers including staffing firms to avoid the $2,000 per year employer tax on all full-time employees under the Affordable Care Act.

These plans are limited in what they cover -- wellness testing and the possibility of up to five doctor’s office visits per year  -- but typically not hospitalization. . Such plans would offer few services, and would be available at $40 to $100 per month per employee, according to the Wall Street Journal. Federal administrators indicate that this type of “skinny plan” would appear to qualify as acceptable minimum coverage under the law.

The reality is that when the reform was conceived and then went into law, lawmakers left the door open by creating vague definitions of employer sponsored coverage. 

“Whether such plans will ultimately be allowable is currently a gray area, said J. Marshall Dye, founder and president of Insurance Applications Group, the parent company of the Essential StaffCARE, health insurance program for the staffing industry.

Dye said federal agencies have verbally indicated such wellness plans would qualify as coverage for eliminating the $2,000 tax. But at this stage, the agencies have not produced anything in writing to specifically confirm the benefits that must be included in such a plan. Further, if such plans are ultimately not allowed, and a staffing company (or other employer) has implemented a “skinny plan” concept before final and specific written confirmation, it could mean millions in tax liability for employers.

Tax liability notwithstanding, Skinny Plans has opened a can of worms. The limited coverage will not appeal to many workers especially those in poorer health who could then visit the subsidized exchanges. If the worker is ill, it’s going to drive up the rate of insuring him or her, further driving up the costs in the marketplace.

And although the plan would prevent the $2,000 tax for employers, they would still be on the hook for $3,000 per year for each employee who receives a subsidy to buy healthcare insurance through an exchange. However it’s expected that the number of temporary workers applying for exchange coverage will be small enough as to still make this a cheaper option and help employers comply with the law.  

Stay tuned. We will keep abreast of changes as regulators decide on how to proceed.

Comments

Add New Comment

Post comment

NOTE: Links will not be clickable.
Security text:*

John Schulien 06/15/2013 12:25 am

"although the plan would prevent the $2,000 tax for employers, they would still be on the hook for $3,000 per year for each employee who receives a subsidy to buy healthcare insurance through an exchange"

Are you sure about this? My understanding is that if your employer offers you a "skinny" health care plan, then you are INELIGIBLE to receive an exchange subsidy because your employer offered you affordable health care and you turned it down.


Total 1 comments


Recent Blog Posts

Subadhra Sriram Now Accepting Nominations for the 2013 North America Staffing 100

We are now accepting nominations for our annual list of North America staffing industry achievers, 100 men and women who have made a difference to the staffing industry. I must warn folks: the list is... Read More

Subadhra Sriram Natural Selection: The Growth of Professional Services, Temp Staffing

The industry has seen some interesting evolution. I wonder what Charles Darwin might have made of it?

To see it from my perspective--I have a special project for which I need a Web developer. I wasn’t... Read More

Subadhra Sriram Blogging for Business – Join The Stream

 Last week’s Twitter hoax may not be the best example. Yes, it stole the spotlight but it gave social media a bad rap.  And it lowered the Dow Jones Industrial average by 150 points — falsely. ... Read More

Subadhra Sriram Background Check Guidelines Make a Murky Situation Murkier

Just what is this new guidance supposed to be? I am referring to the EEOC rules on background checks released late last year.

It used to be that staffing firms could conduct a background check on workers... Read More

Subadhra Sriram Are the Benefits Offered By Your Staffing Firm Competitive? It Matters.

The fact is that temp benefits is not really part of the tête-à-tête between buyers of staffing services and their suppliers. Sure, it’s in the contract. But the reality is that it’s an area that... Read More

Subadhra Sriram Best Staffing Firms to Work For Can be Your Best Suppliers Too

Why are companies clamoring to be on the top of a Best Places to Work list?

Staffing firms win. It’s an honor, yes, but it’s not just about the prestige. The true business value is the low employee... Read More

Subadhra Sriram What Is RPO?

Remember the days when recruitment process outsourcing was dismissed as vaporware? A decade later, the staffing industry has labeled it as up-and-coming.  It is a growing $4 billion global market... Read More

Subadhra Sriram Unlikely Valentine: Staffing Firms Learn to Love the MSP

Some suppliers are in the midst of a red-hot love affair with their MSPs. And it’s been great all the way around.  Why is the courtship such a happy one?

These suppliers know how to talk to their... Read More

Subadhra Sriram Pet Peeves: The Buyers’ Turn

Their tales could fill a book. Last month I blogged about staffing suppliers’ pet peeves regarding their clients. Well, buyers have their own issues with suppliers. Over the years, the two sides have... Read More