Minimum Essential Coverage & Value Rules

Minimum Essential Coverage

Will a MEC (Minimum Essential Coverage) plan satisfy both the MEC and the 60% value rules? If not, would this cause an employer to still pay the $2000 tax if he or she has more than 100 employees on payroll?

It can satisfy the $2,000 penalty, but not the $3,000 penalty related to MVP and if employee gets coverage and/or a subsidy from the exchange. If the group offers coverage to at least 95% (70% for the 2015 plan year if certain criteria are met) of the full-time employees (and their dependent children), the group will be subject to a monthly penalty of 1/12 of $3,000 for each full-time employee that receives a premium tax credit or cost-sharing reduction for coverage purchased through a Marketplace exchange in that month because the coverage is unaffordable or does not meet a minimum value.

 

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