EXCERPTS:
"WASHINGTON—Amid pressure from employers, the Obama administration on Monday loosened rules for bare-bones health-insurance policies. It marks one of the administration's biggest steps to peel back regulations that big business found onerous under the health- care overhaul.
McDonald's Corp. had warned regulators it might have to drop its health-insurance plans for 30,000 hourly workers unless it got an exemption for these policies, which have low premiums but also limit payments for medical costs.
The administration's move underscores how businesses, after complaining loudly about the overhaul in the run-up to passage, are now winning a handful of modifications.
The change was part of sweeping new rules rolled out by the government Monday that will force insurers to spend a high portion of their premium revenue on medical care.
Consumers will reap some benefits. Insurers that don't meet the new standards will be forced to issue rebate checks, which the administration estimated could affect nearly nine million Americans, for a total payout of up to $1.4 billion.
The rules, codifying language in the health law, say insurers will be required to spend between 80% for smaller carriers and 85% for larger carriers of their revenue on medical care, a calculation known as a medical-loss ratio. That limits how much they put toward salaries, profit and other nonmedical costs.
Providers of "mini-med" policies, like McDonalds, which caps benefits at a low level, had objected that they would have trouble meeting those levels, in part because they have high administrative costs.
About 1.4 million Americans are covered under mini-med plans. They're typically offered by low-wage employers, who have high employee turnover and end up paying out little money in medical claims....
Democrats said eliminating plans with such limited coverage was the reason they passed the law in the first place.
But Obama administration officials said they were determined not to prompt any employers to drop their plans because of the law. "No one's going to lose their coverage," said Jay Angoff, a director at the Department of Health and Human Services.
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"Starting in 2014, many low wage workers will shift to getting coverage inside new insurance exchanges, because that's where they can tap tax credits to offset their costs. Stricter rules for the minimum benefits that employers can offer are expected to displace the plans altogether.
