ACA/Obamacare: Employer Work-Around and Other Avoidance Techniques

“Take Advantage of Imperfections in the Minimum Value Calculator. In addition to being affordable, health insurance must meet a “minimum actuarial value” test. For self-insured companies, this means that the benefits can differ from the essential health benefits included in a standard plan, but the employer plan has to cover at least 60 percent of expected costs under a standard plan.

One official way to do that is to get a passing score on the Department of Health and Human Services’ “minimum-value” calculator, an online tool. And here is a surprise: an employer can actually meet this test without including hospitalization! (See the discussion at Kaiser Health News.) At the site, the visitor is invited to check boxes indicating whether certain benefits are included in the employer plan. In addition to hospitalization, mental health care, imaging (MRI and CT scans) ER visits and specialist services are other items that do not have to be included to meet the government’s test.



Pay the Fine. Employers can drop health insurance coverage altogether (or never provide it in the first place) and pay a fine equal to $2,000 per employee. That’s a stiff price to pay, but it’s less than the cost of health insurance. If the employer chooses this option, the employees will be eligible for subsidized insurance in the exchange.


By the way, this is a win-win choice. Economic theory tells us that the $2,000 fine will ultimately be paid by the employees – in the form of lower wages or reduced non-health care benefits. But most low-wage employees will get a subsidy that is worth much more than that and they will have generous health insurance to boot." - What Can Employers Do To Reduce The Cost Of Obamacare?, Forbes, 09/16/2014


Link to the entire article appears below:
http://www.forbes.com/sites/johngoodman/2014/09/16/what-can-employers-do-to-reduce-the-cost-of-obamacare-2/