Mid Level ACA Compliant HEALTH PLAN for Hourly Workers
Alternative to Major Med, Limited Med, MVP or MEC
2018 Facts and Observations
Fact: Given current low unemployment statistics, the hourly wage worker is in very high demand, new efforts must be undertaken to design creative ways as to attract and retain these valuable service sector workers.
- Observation: Why do employers continue to force unpopular health insurance plans on the sector of the workforce? Current options are heavily loaded in the back end (high deductibles) or limited to upfront first dollar, mostly preventative services (MEC Only).
Fact: According to HHS statistics. 97.5% of employees covered by group insurance plans never exceed their deductible levels (Bronze level major medical) making it very difficult for recipients to perceive any value in their current employer-sponsored plans.
- Observation: Likely even fewer low-wage hourly employees reach or exceed major medical deductible levels. We estimate fewer than 1% value or even need catastrophic coverage.
Fact: Fewer than 1/10 of 1% of hourly workforce employees enroll in subsidized exchange plans, when offered any employer-sponsored health plan.
- Observation: Why risk the cost and excessive exposure of sponsoring a MVP level, or Bronze Major Medical plan, when the exposure to the Minimum Value (B penalty) penalty is so insignificant?
Fact: Moderate/low wage employees prefer first dollar ($0 deductible/$0 coinsurance) to health plans containing catastrophic coverage (despite what the CFO or HR thinks)
- Observation: A properly designed health plan, with little or no out-of-pocket cost, strong ($100,000 or more) inpatient medical/surgical benefits falling in between the so called limited (skinny) medical and primarily catastrophic MVP or major medical Bronze plan, will better serve to comply with ACA while at the same time be attractive to the workforce.
Radical New Option – MiddleMEC
Given the facts and observations above, we submit for your consideration a new approach, finally bridging the gap between the so-called skinny approach and the overly expensive and unpopular high deductible major med/MVP options. We call this new approach MiddleMEC
What is MiddleMEC and how does it differentiate from more traditional hourly workforce solutions? In the table below, we have compared Bronze level coverages (using ACA required Essential Health Benefits) as you can see, a strong argument can be made that the MiddleMEC approach is comparable on most EHB claims.
What About Chronic or Catastrophic Events?
Regardless of how statistically few chronic or catastrophic events take place, we recognize that they do occur, even in the low-wage hourly worker population. This risk can be mitigated without the need to employ a major medical solution. We recommend including a group Critical Illness benefit with a minimum cash payout of $15,000. Although a CI plan will not pay for the cost of treatment for a dread disease, it will provide cash to begin or maintain necessary treatment for the short term, while the affected employee and or family member seeks catastrophic coverage through the exchanges or on the open market.