General Agents/Minimum Essential Coverage Plans
MEC stands for Minimum Essential Coverage and includes preventive care and wellness benefits only. Through an ACA loophole, Applicable Large Employers can offer self-funded, low-cost MEC plans (priced under $100 per employee per month) and satisfy the employer mandate to offer a group plan, thus avoiding the $2,000 penalty, but remaining open to the $3,000 penalty. MEC plans also satisfy the individual mandate for employees. Thus, MEC plans are technically “ACA-compliant,” but they offer no protection to employees in the case of a catastrophic health event.
MEC plans are being touted as an ACA compliance strategy for the staffing industry and others that employ large numbers of low-wage hourly workers, so it’s important to be aware of what these plans do and do not cover. Staffing Industry Analysts cautions that businesses that sponsor MEC or so-called ‘skinny’ plans, “should plan to explain to their employees continually and in plain language that such plans are not the equivalent of traditional health insurance and that they need to consider obtaining comprehensive catastrophic coverage through state exchanges or elsewhere.”