Minimum Essential / Minimum Value Coverage
- Thread starter toddoxley
- Start date
This is for the LARGE GROUP market only. In the small group and IFP market we have Actuarial Value (the Bronze, Silver, Gold & Platinum plans), but in the large group market we have the Minimum Value plans and Minimum Essential Coverage.
There are two penalties for large groups.
The first penalty is for not offering minimum essential coverage at all. It carries a $2,000 penalty for ALL full-time employees, no matter if anybody goes to the exchange for a subsidy or not.
The second is if the minimum essential coverage is not affordable (the 9.5% of income rule), or if the minimum essential coverage doesn't meet the minimum value rules. That is a $3,000 penalty for every full-time eligible employee who gets a subsidy in the exchange, less an exemption of 30 of them.
Minimum Value is defined, and there are calculators to help decide if the plan meets Minimum Value. Minimum Essential has not been defined by HHS yet.
There are two penalties for large groups.
The first penalty is for not offering minimum essential coverage at all. It carries a $2,000 penalty for ALL full-time employees, no matter if anybody goes to the exchange for a subsidy or not.
The second is if the minimum essential coverage is not affordable (the 9.5% of income rule), or if the minimum essential coverage doesn't meet the minimum value rules. That is a $3,000 penalty for every full-time eligible employee who gets a subsidy in the exchange, less an exemption of 30 of them.
Minimum Value is defined, and there are calculators to help decide if the plan meets Minimum Value. Minimum Essential has not been defined by HHS yet.
- 8,448
This article says that millions of people who can't afford health insurance at work won't be able to get subsidies either..
Little hope seen for millions priced out of health overhaul | Reuters
So maybe the $3,000 penalty won't be that common? I don't think the lawyers (Congressional Assistants) who wrote the Affordable Care Act legislation were smart enough to design it to fail...it will fail because they are so dumb.
- Thread starter
- #4
Ann, I appreciate your response and clarification. In the March 20th BCBSAZ seminar the presenter stated that a large group would be wise to offer a triple option ie: minimum essential plan, minimum value plan and a buy up option. Did you understand her statement this way?
Yes, I did understand her statement that way. The way she said it made sense, but I think we need clarification from HHS about what "minimum essential" means. The presenter went quickly over this, but it appeared that she was saying one penalty would be circumvented if the employer offered Minimum Essential, and the other would be circumvented if the Employer offered Minimum Value at an "affordable" level, and then the "buy-up" option would be the plan the employer really intended to offer in the first place.
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- #6
Ok, what prompted me to asked this question was her statement regarding the employer contribution to the minimum essential plan. I thought she said that if an employer offered the minimum essential plan to avoid the 2k penalty that the employer did not have to contribute towards the cost of the minimum essential plan?? Do I understand her correctly?
I think that's what she was communicating. I THINK (but need to confirm) that the $2000 penalty "across the masses" (meaning for EVERY full-time eligible employee) is circumvented if the employer just OFFERS coverage that is at least MEC (minimum essential coverage). But I don't believe that MEC must be "affordable" to avoid the $2000 penalty. Once again, that's not confirmed, but I believe that was what RuthAnn was saying at the meeting.
Then the $3000 penalty for every employee who gets a subsidy in the exchange, less 30 employees, goes away if the contribution to a MV (minimum value) plan is "affordable".
It's kind of frustrating, because the MEC has not been defined by HHS yet. Research of this whole subject matter is on my "to-do" list for the near future. If you, or anyone else, finds confirmation of these rules, please let us all know.
Then the $3000 penalty for every employee who gets a subsidy in the exchange, less 30 employees, goes away if the contribution to a MV (minimum value) plan is "affordable".
It's kind of frustrating, because the MEC has not been defined by HHS yet. Research of this whole subject matter is on my "to-do" list for the near future. If you, or anyone else, finds confirmation of these rules, please let us all know.
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