State regulators grapple with health care law loopholes

The state's pioneering health care law requires residents to have insurance that meets minimum standards, but regulators today discovered that those standards allow for gaping loopholes.

Jamie Katz, general counsel for the state's Connector Authority, which oversees the state's health initiative, said staffers have been reviewing health plans by scores of employers that raise "difficult issues."

Those issues include: health plans that cap the benefits insurers will pay each year on prescription coverage; self-insured plans ( generally used by large employers) that exclude maternity coverage for dependents; and plans collectively-bargained between companies and unions for part-time workers that have prescription caps or annual overall limits on benefits.

Katz said that while regulations created by the Connector require, for instance, health plans to include prescription coverage to be considered meeting the state's minimum standard, the regulations are silent on whether that coverage is allowed to have limits.

If regulators determine that a company's plan does not meet the state's minimum standards for a health insurance plan, it is the company's employees -- and not the company -- that are subject to a tax penalty.

After debating the issue for about an hour, Connector Authority board members agreed that such limits and exclusions would be allowed to stand for this year, but that companies should be aware that the board will likely take a stand against such practices -- by likely changing regulations -- in the future.