NY Teachers Health Fund Receives Biggest Waiver of Health Reform Provision

October 6, 2010 (PLANSPONSOR.com) - Thirty companies and organizations won't be required to raise the minimum annual benefit included in low-cost health plans covering seasonal, part-time, or low-wage employees.

According to Bloomberg, the Department of Health and Human Services said it granted waivers in late September so workers with minimum plans would keep coverage without major premium increases. The companies and organizations cover almost a million workers, one-third of them members of New York’s teachers union.  

Bloomberg said the biggest single waiver, for 351,000 people, is for the United Federation of Teachers Welfare Fund, a New York union providing coverage for city teachers. McDonald’s Corp. asked to excuse 115,000 workers, while the United Agricultural Benefit Trust, the California-based cooperative that offers coverage to farm workers, can exempt 17,347 people.  

The waivers are effective for a year and were granted to insurance plans and companies that showed employee premiums would rise significantly or that workers would lose coverage without them, Jessica Santillo, a Department of Health and Human Services spokeswoman, told Bloomberg in an e-mailed statement. The waiver program is intended to provide continuous coverage until 2014, when new government-organized marketplaces will offer insurance subsidized by tax credits, according to Santillo. Until those subsidized plans are available, the government wanted to avoid imposing rules that may result in people getting excluded from the limited benefit plans, she said.  

Without the waivers, companies would have had to provide a minimum of $750,000 in coverage next year, increasing to $1.25 million in 2012, $2 million in 2013, and without limit in 2014. Allowing a waiver for plans with limits much lower than this will ensure that those beneficiaries will “not be denied access to needed services or experience more than a minimal impact on premiums,” an administration memo said.  

McDonald’s’ waiver request prompted Senator Jay Rockefeller (D-West Virginia) to open a probe into the limited benefit “mini-med” plans that the company offers to employees (see Senator Opens Probe of McDonald’s Mini-Med Plans). The senator is questioning whether limited-benefit plans provide sufficient coverage and give fair value to workers.