Find out if the MEC plans you are offering comply with the ACA

The Affordable Care Act requires that everyone must have at last the minimum essential coverage of health insurance, also called MEC Plan. An exception to this are those who have special cases such as being part of a particular group, being qualified for hardship exemption, or having an income that is lower than the minimum requirement for filing an income tax return. The insurance should be able to comply with the MEC Plan standards. This means that its actuarial value is greater than 10%. This covers 10 vital health benefits, namely:

  • Hospitalization
  • Laboratory testing
  • Outpatient care
  • Emergency services
  • Prescription drugs
  • Mental health care
  • Maternity and Newborn care
  • Mental health and substance use services
  • Pediatric services
  • Preventive services
  • Rehabilitative and Habilitative services

Failing to apply for a qualified insurance or at least a MEC within the prescribed period every year will subject a company to pay penalties.

MEC plan inclusions that qualify as health coverage

If you already have signed up for any of the health plans below, you are considered to be compliant with the requirements of the Affordable Care Act. For this, you wouldn’t need to pay penalties:

  • Health plans that were purchased from the Health Insurance Marketplace
  • Health plans that were not purchased from the Health Insurance Marketplace but meet the standards set for a qualified health plan
  • A health plan that was purchased on or before March 23, 2010
  • Any job-based insurance such as retirement plans or COBRA coverage
  • CHIP or Children’s Health Insurance Program
  • Health plan for a Peace Corps volunteer
  • Dependents covered by a parent’s health plan
  • Medical Assistance for refugees
  • Medicare Part A and Part C
  • Health Benefits Program covered by the Department of Defense Non-appropriated Fund
  • Student health plans (Consult the school to confirm if the health plan qualifies as health coverage)
  • Medicaid, except for plans that have limited coverage
  • Certain types of health care plans under the Department of Veterans Affairs
  • Certain types of TRICARE plans
  • High-risk pool plan that began on or before December 31, 2014 (confirm if the high-risk pool plan qualifies as health coverage)

Health plans that do not qualify as health coverage

If an employee only owns any of the health plans below, he or she needs to sign up for a qualified plan or else there will be a penalty:

  • Medicare Part B
  • A plan that only covers dental or vision care
  • Compensation for workers
  • Health plans that can only cover a specific illness or condition
  • Health plans that only give discounts for medical services

If an employee has a qualified health coverage that lasts for less than a year, there is still a penalty worth 1/12 of the yearly amount for each month that the employee and his or her dependents do not have coverage. If the employee is not covered for only 1-2 months, there is no penalty.

Need more information? It is highly recommended that an employer consult a professional like ARCHER JORDAN to better understand the requirements set by the Affordable Care Act.