Some of the success that California has had in implementing the Affordable Care Act could be undone if the state doesn’t close a loophole that — if exploited by some employers and insurers — could deny workers access to care and subsidies for coverage.
Health Access is proud to sponsor AB 248, by Assembly member Roger Hernandez, to close this loophole and ensure workers get the care and coverage they need, rather than subminimum “junk” coverage.
The ACA set minimum standards for health plans, so patients who need care won’t get stunned with huge bills because of exclusions in their coverage. But for employer-based coverage, there’s a loophole. If a worker takes this plan, it gets the employer off the hook for the employer responsibility penalty.
Your employer, and the insurance broker, tell you this coverage gets you out of the individual mandate. They do not tell you that if you take this, you cannot go to Covered California and get tax subsidies. They do not tell you that you might be eligible for no-cost Medi-Cal if your income is low enough.
Right now, an employer who offers such coverage faces no penalty for offering subminimum coverage. What kinds of businesses is this coverage marketed to? Those with low-income workers like agriculture corporations, staffing companies, janitorial services, resorts, golf courses, call centers, landscaping companies and security firms.
Most health plans do not offer such subminimum coverage in California: not Anthem, not Blue Shield, not Kaiser, not HealthNet, not any of the plans that contract with Medi-Cal managed care or Covered California or that dominate the employer market in California. But we should address this practice before it becomes widespread to the detriment of workers and our whole health system.
IRS could close this loophole nationally, but until they do, California needs AB 248 to put a stop to such subminimum coverage.