Over the past decade, workers have relied on their jobs for access to health insurance, which is financially out of reach for most workers. Currently, many of these employees struggle to afford major medical insurance, even when subsidized by their employer or under the Affordable Care Act (ACA). It would likely be a stretch for a low-wage worker, making under $13 an hour, to afford even the average premium. Even when their employer pays between 50-80% of the premium for the employee and their family. While generous, this still leaves a low wage worker vulnerable to health care and with two choices: 1) Waive coverage; which still leaves the employee liable for the individual mandate; 2) Pay for the coverage; which makes them stretch their already tight budget.
However, with a limited budget, employees now have options which provide access to health care in the event of an illness or accident. These plans are called Limited Benefit and Minimum Essential Coverage (MEC) plans, once used for industries like restaurants and staffing companies, are now gaining momentum amongst small to midsize businesses.
MEC benefit plans are not major medical plans. MEC plans are ERISA based health plans that provide 100% preventive coverage as required by the ACA. These plans also satisfy the individual mandate, and the 4980H(a) penalty, which is a part of the employer mandate. These plans vary in the marketplace by coverage and cost. They are usually bundled along with remote Teladoc services and a Rx plan for limited Tier 1 prescription coverage.
Limited benefit plans are a fixed indemnity plan and pay set dollar amounts based on a schedule of benefits for in-network medical expenses. For instance, a plan could provide three standard physician visits a year with a co-pay of $20 per visit, or $200 a day toward an Emergency Room visit. These plans average around $129 a month for single coverage. Most MEC carriers require the employer to pay half of the premium. Not only do these plans provide affordable access to healthcare for hourly employees, it benefits the employer as well, by being significantly cheaper than major medical insurance.
The only major medical alternative for the low wage hourly worker has typically been a Minimum Value Plan also known as (MVP) plan. This plan usually has an annual deductible of $5000 per individual and average three to four times as much as the MEC bundle plan. Employers have started enrolling their workers into either the MEC or MVP classifications, placing hourly workers in the MEC plan and salaried employees in the MVP plan. Having options allows the employer to offer their hourly employees the limited benefit plans to save money.
Aside from the cost saving aspect of these plans, MEC plans can also be used as a recruiting technique for part-time workers who, without a working spouse, may have no coverage at all.
To save money on your employee benefit plans contact Tatanca at (844) 428-2686 or visit our website www.tatanca.com.
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