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Alternatives to 'mini-med' health care plans are in the works

Alternatives to 'mini-med' health care plans are in the works

Designs are being developed to provide affordable coverage for employees now enrolled in mini-med health care plans.

“We're working on alternative designs” for the 20,000 to 35,000 employees and dependents covered by Western Growers Association's multiple employer welfare arrangement, including “a replacement for the 60% who are in mini-med plans,” said Jonathan Alexander, compliance counsel for the association in Irvine, Calif.

The association is considering a plan developed by the California Health Benefit Exchange.

“The most affordable (replacement) looks like a high-deductible health plan plus fairly robust coinsurance,” Mr. Alexander said. “It may be a replacement, but not a solution,” he said in citing higher employee costs.

Limited-benefit or fixed-indemnity plans, which are structured differently than mini-med plans, pay a fixed amount toward hospital and doctor visits, critical illness, accidents and other charges that “are direct out-of-pocket hits” to the employee, said Christopher Covill, benefits product solution leader at Mercer L.L.C. in Atlanta.

“There's a whole host of (supplemental) products out there today. I think there will be an absolute growth in that market,” he said.

The fixed-indemnity plans are “excepted” from the Patient Protection and Affordable Care Act, said Joe Murgo, president of Strategic Resource Co., a Columbia, S.C., subsidiary of Aetna Inc. specializing in limited benefit insurance plans.

One reason that Aetna's fixed indemnity plans make coverage affordable is they access Aetna's nationwide provider network. Offered as stand-alone products now, they could supplement coverage employees obtain through an exchange to satisfy the individual mandate, he said.

Brian Thompson, vice president of special markets for Transamerica Employee Benefits in Atlanta, said employers that offer mini-med plans have been migrating to limited-benefit plans since 2011. Transamerica offers limited benefit plans that could supplement the exchanges' plans and is developing new products “to cover the new points of risk an employee has in the market today,” he said.

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