Bill Aims to End Limited Health Coverage for Large Companies

Large employers could no longer provide workers with minimal health plans that provide less than 60 percent of the cost of essential care, under legislation introduced this week by Assemblyman Roger Hernández.

The legislation, Assembly Bill 248, seeks to close a perceived loophole in the Affordable Care Act that allows companies with 50 or more employees to provide a form of limited health insurance, known as “skinny” plans, while avoiding federal penalties for opting out of health care.

The bill would specifically prohibit health plans or insurers from offering large employers that form of minimal coverage.

Hernández, a West Covina Democrat, said he is fighting on behalf of workers who are deceived into thinking they possess complete health coverage, only to be denied care at a doctor’s office or treated at an emergency room and then hit with a giant bill. Hernandez also views the proposal as necessary in order to raise standards on large companies that small businesses already must abide.

“If our small business community is required to provide comprehensive health insurance to its employees, large employers have no excuse to not offer the same,” Hernández said in a prepared statement.

A “skinny” health plan that provides less than 60 percent of the cost of health care can covers some kinds of medical diagnostics, such as a diabetes test, but does not cover doctor visits, medicine or emergency room visits, said an aide for Hernández.

The legislation still would allow employers to opt out of providing health care coverage under the Affordable Care Act by facing a $3,000 fine per worker.

Hernandez ran similar legislation last year that was approved by the Legislature along party lines. But Gov. Jerry Brown vetoed Assembly Bill 2088 out of concern that it violated federal law. An aide for Hernandez said the legislator has since consulted with federal officials and maintains that the proposal complies with all laws.

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