More Large Companies Opt To Drop ‘Bare-Bones’ Health Plans

A growing number of large employers are choosing to stop offering their so-called bare-bones or "mini-med" health plans -- which typically provide basic, minimum coverage -- rather than upgrading the plans to be compliant with the Affordable Care Act's requirements, the Wall Street Journal reports.

More than 1,200 employers offer such minimum-coverage plans, which must be phased out by Jan. 1. An estimated four million workers are enrolled in the low-cost plans, which are common in low-wage industries and typically limit total benefits to as little as $3,000 a year.

According to the Journal, many companies are opting to shift hundreds -- or in some instances, thousands -- of employees into private health insurance exchanges or the public marketplaces created under the ACA.

Recently, Securitas -- the nation's largest provider of security personnel -- announced that it will stop offering its bare-bones health plans at the end of the year, forcing nearly 55,000 of the company's employees to seek coverage in the ACA's exchanges, the Journal reports. Securitas also plans to develop new plans that comply with the ACA, which could be rolled out in 2015.

Jim McNulty -- a spokesperson for Securitas' U.S. operation -- said, "The mini-meds go away and we're not replacing them," adding that employees' "option is to go to the exchanges."

According to the Journal, the Obama administration's decision to institute a yearlong delay on the ACA's employer mandate and its penalties likely played a role in Securitas' and other companies' health coverage decisions. Securitas executives said they planned to offer health plans with more benefits, which would have required their employees to pay more out-of-pocket, but they decided to change course and develop new plans for 2015.

Citing the delay to the employer mandate penalties, McNulty said, "We're not about to pick up an additional cost we can't get reimbursed for." He added, "We will try in 2014 to convince more of our customers to help share the burden of health care and expand coverage" (Thurm, Wall Street Journal, 9/25).