Online Calculator Flaw Allows Firms To Sell Non-ACA-Compliant Plans

September 16, 2014 in News

A glitch in the online federal calculator used to certify that insurance plans comply with the Affordable Care Act’s minimum coverage standards is allowing dozens of large employers to offer health coverage that lacks some basic benefits, according insurance brokers and consultants, the Washington Post reports.

Calculator Details

For plans to meet the ACA’s minimum coverage standards, they must cover at least 60% of anticipated medical costs. To determine whether plans meet that standard, employers use the online calculator by checking boxes that indicate which benefits are being offered and the employees’ shares of the plan’s cost. The calculator then concludes whether a plan covers enough of the anticipated medical costs to meet ACA standards.

Calculator Flaws

Consumer advocates said that HHS’ “minimum-value” online calculator appears to be letting companies that are enrolling employees in coverage for 2015 provide less-costly health plans with substandard coverage while avoiding penalties under the ACA. Such plans lack certain benefits, such as hospitalization coverage.

Meanwhile, the ACA prohibits employees at such companies from accessing federal subsidies to help them purchase more comprehensive coverage through the law’s insurance exchanges.

According to the Post, it is unclear how many, or which, companies are offering plans that have been approved by the calculator but do not meet the minimum standards. However, businesses with low-wage workers are most likely to offer such plans, according to brokers.

Industry experts have said that HHS is aware of the issue but has not fixed the calculator. HHS has referred inquiries about the calculator to the Department of the Treasury, which it said is in charge of making sure plans meet ACA standards. According to the Post, the Treasury Department referred questions back to HHS.


Lockton Companies Director of Actuarial Services Shannon Demaree said, “There are a lot of errors in the calculator. It allows more plans to pass as qualifying coverage than we believe really do.”

Independent actuary Hobson Carroll added that HHS officials “were somewhat na├»ve in not realizing that people were going to game the heck out of it” (Hancock, Washington Post, 9/12).

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