Magazine article Workforce Management

'Mini-Med' Plans Still Do Big Business

Magazine article Workforce Management

'Mini-Med' Plans Still Do Big Business

Article excerpt

Employers should be clear with workers about what limited health benefit plans do--and don't--cover in the event of a serious illness or accident, consumer groups are warning.

The warnings are a reminder that limited benefit plans--known as "mini-med" plans--are still legal because hundreds of employers and insurers have received federal waivers to continue selling them until 2014.

Consumer Reports magazine describes mini-med plans in a new report as "legal but inadequate," and even categorizes them as "junk" insurance.

But insurers and employers say mini-med plans provide some coverage to people who otherwise could not afford more comprehensive insurance.

The plans are attractive because they typically have low premiums--as low as $10 per month. But they also carry annual limits of far less than the federal requirement of $750,000 under health care reform this year.

Coverage limits can be as low as $1,000 annually. Some mini-med plans pay for just four doctors' visits per year.

"Mini-meds appeal to large employers in industries such as retail, food service and temporary staffing agencies who want to be able to tell their employees, 'I have something for you.' But in reality, these plans are extremely limited in their coverage," says Nancy Metcalf, senior program editor of Consumer Reports.

The American Cancer Society has been sounding the alarm over such plans for several years after hearing from newly diagnosed cancer patients that these policies don't cover expensive treatments.

"It's really important for consumers, including employers, to know what they are signing up for," says Erin Reidy, associate policy director of the American Cancer Society Cancer Action Network. "The key is knowing what you are getting into."

The 2010 Patient Protection and Affordable Care Act prohibited the sale of these low-coverage plans. However, the Obama administration has been issuing waivers to employers and insurers that let them continue offering these plans until 2014. At that time, insurance companies will be barred from denying anyone coverage based on a pre-existing condition.

More than 1,200 health plans covering 3.9 million people have received federal waivers to continue mini-med plans, according to Consumer Reports. The federal Centers for Medicare & Medicaid Services issued the final waivers for mini-med plans in January.

Some of these waivers cover multiple years. …

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