Feds Warn Employers Against Dropping Sick Workers From Plans
The Obama administration in a bulletin published earlier this month warned employers not to encourage sick workers to drop company health plans and buy coverage from the insurance exchanges as a way to save money, Kaiser Health News reports.
Under the Affordable Care Act, health plans purchased through the insurance exchanges are required to accept all patients at predetermined prices, despite any pre-existing conditions.
Brokers and consultants have offered to help large employers save money by transitioning workers with high-cost conditions to an exchange plan, KHN reports. According to KHN, businesses that are self-insured can save hundreds of thousands of dollars annually by shifting even one high-cost employee, while paying only about $10,000 to help the shifted employee pay for exchange coverage.
In May, administration officials consulted with independent lawyers about how to address the issue, KHN reports.
HHS and the departments of Labor and Treasury said in a bulletin that shifting sick workers violates HIPAA and the Public Health Service Act by unlawfully discriminating against employees based on their health conditions.
Meanwhile, consumer advocates said the practice of transferring sick workers off of company plans could erode employer-sponsored coverage and increase costs and premiums for exchange plans. Consumers purchasing exchange plans and taxpayers would end up covering those costs, according to KHN.
According to KHN, it is unclear how many employers have offered to pay their employees to drop their company's health plan (Hancock, Kaiser Health News, 11/25).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.