On September 30, 2010, the Centers for Medicare and Medicaid Services (CMS) granted approximately thirty (30) waivers to companies offering so called “mini-med” plans to their employees. Many companies offering such plans warned that they may have to drop coverage for their employees altogether as a result of a provision in the Patient Protection and Affordable Care Act (PPACA) which restricts health plans from setting annual limits on benefits.
Because “mini-med” plans offer very basic coverage for a limited cost with a cap on benefits, the plans ran afoul of the new provision. In order to avoid the result of companies dropping health coverage, CMS granted the waivers. Companies such as McDonald’s Corporation, Aetna, Reliance Standard, and CIGNA have obtained waivers.
In addition to the PPACA provision restricting plans from offering coverage with annual benefit limits, mini-med plans also may not satisfy a new requirement that insurance plans spend at least 80% of premiums on medical claims or quality improvements—known as the minimum medical loss ratio requirement. Waivers of that provision have not yet been granted. However, CMS has indicated that Department of Health and Human Services Secretary Kathleen Sebelius intends to exercise her discretion to grant waivers of this provision as well.