The Internal Revenue Service has issued a notice warning that some employer-sponsored health plans will need to provide better coverage for in-patient hospitalization services to qualify as minimum coverage.
The IRS notice said that it, along with HHS and the Treasury Department, have become aware that certain group health plan benefit designs that do not provide coverage for in-patient hospitalization services are being promoted to employers. “A plan that fails to provide substantial coverage for these services would fail to offer fundamental benefits that are nearly universally covered, and historically have been considered integral to coverage, under typical employer-sponsored group health plans,” said the notice.
Promoters of these plans contend that the plans satisfy minimum value within the meaning of the Affordable Care Act, as determined through use of the online Minimum Value Calculator.
The notice advises employers that the IRS, Treasury, and HHS are considering whether the continuance tables underlying the Minimum Value Calculator produce valid actuarial results for plans with these designs.
The IRS said employers offering plans that fail to cover in-patient hospitalization or physician services should exercise caution in relying on the Minimum Value Calculator to demonstrate that these plans provide minimum value for any portion of a taxable year after publication of final regulations.
