Minimum Value Plans – Serve a Purpose
Unique ID: d31aefd2-700a-4f3a-b3cb-4e23b463484d
There’s been lots of attention on the MVP programs over the last month, which has generated a great deal of confusion in the marketplace. I think it’s about time we clear a few things up with regards to the purpose of these plans.
The Affordable Care Act’s (ACA) intent was to provide affordable health insurance to all individuals. The ACA also provided opportunities for insurance carriers and employers to get creative with regards to how coverage is being offered. This appears to be part of the intent in distinguishing between what small and large employers must offer and what drove the design of health care plans that limit benefit offerings, such as MVP plans with no hospitalization. In all reality, these plans allow many types of employers in the marketplace to provide needed health coverage for their employees.
Let’s face it. A majority of the employees that will be offered these types of health plans have historically never received health care benefits or were offered a fixed indemnity type of product. Employers now have to decide the type of health care option, if any, they will provide. Their choices, however, are few:
- Offer a high deductible PPO option that most often is at a price point that’s unaffordable for this type of workforce.
- Offer an MVP type of product at an affordable price with more limited benefits.
- Offer no coverage at all, which from a financial perspective is most often cost prohibitive due to the penalties.
We’ve consulted with several employers faced with this dilemma, as they want to abide by the regulations put forth by the ACA and provide their employees a health care option. Therefore, the most favored approach in this scenario is providing an MVP type of product, because it offers coverage for the most common health care benefits utilized by these individuals. Understandingly, employees need to be educated as to how the plans work, but no differently than they needed to understand fixed indemnity plans or any other non-traditional benefit plans.
So, though the MVP plan may be considered a “non-traditional health plan,” we must consider the role this type of product plays and that it does accomplish the goal of the ACA: provide affordable health insurance to all individuals.
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