Minimum Essential Coverage

For employers seeking to comply with the Affordable Care Act (ACA), the nuances of the minimal essential coverage requirements are both complex and potentially risky. Minimum essential coverage is coverage individuals must have in order to satisfy the individual mandate under ACA. The mandate states that all employers with 50 or more full-time equivalent employees must offer coverage to at least 95  percent of them to avoid a penalty of $2,000 per employee (excluding the first 30 full-time employees).

Under ACA, it is important to understand that minimum essential coverage is not the same as a minimum value plan – a 60% plan with affordable contributions. An employer does not have to meet the requirements of a minimum value plan to still be compliant with many of the ACA regulations. However, the penalties will be steeper for employers not complying with minimum value.

If a minimum essential plan:

  • Is the only plan offered and;
  • Does not meet the minimum value criteria with affordable contributions and;
  • An employee qualifies for, and enrolls in, subsidized coverage on the public exchange

The employer will be subject to a $3,000 per employee penalty.

A Case Study

Read about how MMA helped one employer manage the impact of reform by implementing a benefit program that complied with ACA regulations.

(Click here to access our Case Study: Construction Employees Under the ACA)