Employers considering skinny plans and the brokers, third party administrators (TPAs), insurers and consultants recommending the use of these arrangements alone or as part of a broader health plan design should seek qualified legal advice for help with structuring and implementing these arrangements to avoid potential traps and missteps that could trigger unanticipated benefits, costs and/or tax consequences. While offering some potential for certain employers, employers must carefully evaluate the potential suitability, benefits, risks and resultant responsibilities of including skinny plan options in their group health benefit offerings and ensure that any such arrangements are properly designed and administered to comply with applicable requirements.
Why Code Section 4980H Has Fueled Growing SkinnyPlan Option Hype
Over the past year, many brokers and consultants have advocated that employers adopt a “preventive only” or “skinny plan” to low paid or other groups of employees as a means of avoiding liability for the potential…
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