Benefits packages are a norm in the corporate world, coming in varying degrees of non-monetary compensation depending on the organization. Healthcare, usually part of these packages, isn’t always the same.
In light of the recent Affordable Care Act, employers are considering minimal cost options for their team; some organizations offer “skinny plans” to their employees. These plans are as they sound: minimal coverage to stay legal.
Because there are certain standards companies have to meet for their healthcare packages, if they offer healthcare in their benefits packages at all. It protects the employer from health law penalties and employees from the Affordable Care Act’s individual penalty. With a skinny healthcare plan, employers provide their staff with preventive care, but not inpatient or outpatient care.
It protects the employer from health law penalties and employees from the Affordable Care Act’s individual penalty. With a skinny healthcare plan, employers provide their staff with preventive care, but not inpatient or outpatient care.
Only 16% of employers offer skinny plans. It’s less costly to employers, so why isn’t it popular?
Offering a skinny plan to employees is less expensive to employers, so why isn’t it more popular?
In fact, 16% of large employers said they will offer a lower-benefit coverage with at least one ACA qualifying health plan in 2015. While it is less expensive, it has limited options. Are you considering joining that 16%? Here are some points to contemplate before you make a final decision.
Pros: Inexpensive and employer-sponsored
It doesn’t cost much for either the employer or the employee to be a part of a skinny plan. Less money is taken out of the employee’s pocket, i.e., about 1% of their income, so less pressure is put on their wallets to meet legal requirements.
It includes the 10 basic requirements mandated by law, so there’s no question in what employees will receive. These plans only cost between $40-$100 per month per employee… that’s much less costly than the alternative, especially for small companies looking to provide benefits but don’t have many resources to do so.
Does your company fit the mold?
Lately, keeping positions staffed partially due to the lack of healthcare benefits has been an issue for some companies. With the skinny plans offered, many employers hope this will keep them competitive in the talent market.
Timothy Jost, Law Professor specializing in Consumer Health at Washington and Lee University in Virginia, said:
“Some of these employers are doing it because their competitors are doing it. They don’t want to lose these employees.”
You can’t simply choose the skinny plan as a part of your employee benefits package because your employer brand competitors are doing it.
It needs to fit the culture of the company as well as the needs of both the employer and the employee. Weigh the costs and benefits of the skinny plan to see if it is the best option for your organization.
Do you know the pros and cons of offering a skinny plan for health coverage? If not, find out now…
Cons: Disqualification for subsidized health care
The problem with the skinny plan is: it’s just that, bare bones. Employees can say they offer health care in order to recruit without having to pay the standard costs associated (somewhere around $2,000 per employee) and employees avoid the IRS penalty for not having healthcare.
Jay Hancock, Staff Writer for Kaiser Health News, said:
“Potentially large medical bills aren’t the only disadvantage for workers at companies using the two-tier [skinny plan] strategy. By offering an ACA-compliant plan, their employers disqualify them from getting insurance on healthcare.gov or other online exchanges – even if they don’t sign up for the company policy.”
So, although the skinny plan seems like a great solution at face value, you need to decide if it’s right for your workforce or putting them in a difficult position when it comes to your employees.
Would other options be better for your team?
It all depends on the needs of your workforce. Some companies are taking healthcare coverage as a part of their employee benefit services to another level by offering wellness-driven plans such as:
- Consumer engagement tools – 73% of employers encourage employees to be better healthcare consumers.
- Consumer-directed plans – 57% of employers will implement or expand account-based CDHPs.
- Wellness programs – 53% of organizations will add or expand their wellness program with incentives to encourage better body management or disincentives to dissuade poor health behavior.
- Spousal coverage – 37% of companies will reduce spousal subsidies or add spousal surcharges to their healthcare policies.
- High-performance networks – 26% of employers will include a narrow network as an option for employee health care next year.
- Weight Management – 73% of organizations will cover surgical interventions for the treatment of severe obesity next year while 41% will cover FDA-approved medication.
The skinny plan is a great choice for companies looking to provide employees with something in regards to health care plans, but there are very important aspects to the plan before deciding. Finding the right healthcare plan for your team can be a mess of decisions with a wealth of options.
You don’t have to figure out the best option for your company alone. With The Olson Group you’ll have a true partner in employee benefits planning.