Administration dropping health care waiver program

Only renewals will be allowed after September

WASHINGTON – The Obama administration is ending a controversial program that allowed employers to avoid a key requirement of the new federal health care law.

Beginning in September, employers that offer health coverage to their workers will no longer be able to seek a waiver from rules mandating that their plans provide at least $1.25 million worth of coverage annually.

The law was designed to eliminate plans with low annual limits, often called mini-med plans, that critics said offered little protection to customers. The plans typically capped how much medical care they covered in a year at as little as a few thousand dollars.

This year, employers were banned from offering plans with annual limits below $750,000. That limit rises to $1.25 million in September and will rise again a year later. In 2014, plans will be prohibited from placing any annual limits on coverage of essential benefits.

Many employers complained after the law was passed last year that raising annual limits would force them to raise premiums, making their health plans unaffordable for employees.

Fearing that many workers would lose even subpar coverage, the administration responded by allowing companies to apply for waivers from the rule if they could show that the annual limit requirement would substantially increase premiums.

As of this week, the administration had granted waivers to 1,433 plans covering more than 3 million workers, according to the Department of Health and Human Services. That represents about 2 percent of Americans covered by private health plans.

Steve Larsen, who oversees the federal waiver process, said Friday that the administration decided to stop taking new waiver applications after concluding that most plans that would need waivers already had applied for them.

Employers that already have waivers would be able to apply for renewal this September, he said.

Ending the waiver process also eliminates a political headache for the administration as President Barack Obama ramps up a re-election campaign in which he will have to defend the new law.

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