Waivers help HR departments through health care reform

To deal with the new regulations, the Department of Health and Human Services has been issuing waivers for mini-medical plan limits. According to HHS officials, about 1,000 waivers have been granted to 2.9 million people, which amounts to approximately 2 percent of the 160 million U.S. population that is covered by private, employer-sponsored health care.

HR professionals are finding the waivers especially useful because they allow employers to keep coverage and help ensure the transition to the new requirements is seamless.

For example, Bare Escentuals, a San Francisco-based cosmetic retailer, may not have been able to afford coverage without the waivers, says Monique Nejeschleba, Bare Escentuals' HR manager. Based on the new mini-medical regulations, Bare Escentuals would have had to provide health care to all employees who average a 30-hour work week, which is a much larger segment than currently receives coverage. Absorbing such a large, unexpected cost might not have been feasible.

Base Escentuals also was in the middle of its renewal period when the new mini-medical regulations were passed. If Bare Escentuals decided to go with another funding option, there would have been little time to research other plans, and communicating the change to employees would have been difficult, Nejeschleba says.

"If we hadn't received a waiver, we would have had to eliminate that plan altogether, or we would have had to look at a different funding option," Nejeschleba says. "For our company, because the decisions were made so late within the year since we were up against a renewal, we would have had to make a change and wouldn't have had enough time to communicate or educate the employees on that change."

Moving forward without mini-meds

Nejeschleba recognizes change is coming and is preparing for 2014 when Bare Escentuals' limited medical plan will no longer be offered. When Bare Escentuals was dealing with the regulations on mini-meds during renewal time, it essentially forced the company to start looking at other plan options and gave the company a glimpse of how it can move forward over the next two to three years. Bare Escentuals also just hired a new brokerage firm, and Nejeschleba expects the new partnership to help her better understand plan alternatives.

Understanding how the likely demise of mini-medical plans will affect employers is necessary with today's ever-changing health care regulations, Sanicola says, and by being proactive, employers can be ready for the new landscape in 2014. Now is the time for HR departments to start analyzing the financial impact and preparing for a future without today's mini-medical plans.

"The biggest challenge going forward is what to do in 2014," Sanicola says. "Organizations need to perform financial modeling to see the impact of adding these populations to a more traditional health plan and what the impact of plan design, cost-sharing and worker income will have on the ability of employees to afford group coverage or access coverage through the health insurance exchanges."