Don't Be Fooled By "Limited Benefit" Insurance Plans

If you’re a freelancer, temp worker, or hourly worker, you may have already been exposed to the “limited benefit plan,” a rotten insurance scheme which is designed to rake in more profits for insurance companies by offering low cost plans that provide almost no worthwhile coverage for the consumer.

These plans often cap out at amounts far lower than the market cost of any procedure, or have complicated rules on pay outs—Aetna’s new offering, for example, pays up to $7,500 a year for inpatient care, but limits the daily amount of a hospital stay to $250.

As our reader Laurel puts it,

They market themselves as a way for temp firms and other places with hourly employees to increase the perception that their employees are ‘valued.’ The employer pays little – sometimes nothing – for the ‘benefits.’ Payment is deducted automatically from employee payrolls.

My fear is that, with the push toward universal insurance, scam-scum like this will qualify as ‘being insured,’ leaving workers in the lurch if they become ill.

“Health Policies Stripped Down – Cheaper Insurance Plans Attract Some Workers, But Benefits Are Limited” [California Nurses Association]

“More Kansas Insurers Offering Limited-Benefit Plans For Employer-Sponsored Health Care” [Medical News Today]
“Wal-Mart has a limited benefit plan, called Starbridge.” [old WSJ article, found through Google ]
(Photo: Getty)