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Treasury nixes employer plans that don’t meet minimum hospital coverage

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Certain group health plans that don’t provide minimally-defined coverage for in-patient hospitalization services will be disallowed if they were purchased after Nov. 4, 2014, the U.S. Department of Treasury has announced.

Certain group health plans that don’t provide minimally-defined coverage for in-patient hospitalization services will be disallowed if they were purchased after Nov. 4, 2014, the U.S. Department of Treasury announced in a notice on Nov. 4.

Employers who purchased such plans prior to Nov. 4 can keep them for a year, while employees enrolled in them will be allowed to purchase alternative plans and receive federal tax credits through state and federal marketplace exchanges, according to the announcement.

The latter represents an exception to eligibility rules, which state that employees who are enrolled in ACA-compliant employer healthcare plans are not eligible for a federal tax credit subsidy.

The notice states that the Treasury Department and U.S. Department of Health and Human Services “believe that plans that fail to provide substantial coverage for in-patient hospitalization services or for physician services (or for both) (referred to in this notice as Non-Hospital/Non-Physician Services Plans) do not provide the minimum value intended by the minimum value requirement and will shortly propose regulations to this effect with a view to being in a position to finalize such regulations during 2015 and make them applicable upon finalization.”

The notice warns that employers should “consider the consequences of the inability to rely solely on the (minimum value)  Calculator (or any actuarial certification or valuation) to demonstrate that a Non-Hospital/Non-Physician Services Plan provides minimum value for any portion of any taxable year ending on or after January 1, 2015, that follows finalization of such regulations.”

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