Employers with 50 or more employees are required to provide their full-time workers with access to Minimal Essential Coverage under the Affordable Care Act (ACA). The mandate is intended to ensure that employees have the opportunity to enroll in an employer-sponsored plan that is both affordable AND comprehensive.
The government has established two tests to determine if MEC requirements are met:
Test One: Minimum Value – To pass this test, at least 60% of medical costs must be paid by the plan, based on the average costs for the standard population. This calculation can be tricky when applied to complex self-funded plans, and a safe harbor checklist is available for plans to use to aid the process. In most self-funded cases, however, this test is easily passed.
Test Two: Affordability – Affordability is determined by examining each unique employee and comparing coverage payments against employee wages earned. Employee premiums cannot exceed 9.5% of their household income or the plan is deemed not affordable. For employees offered multiple plan options by the employer, the calculation is based on the least costly plan option available and not the option selected by the employee, as they may elect higher cost coverage.
Many of the benefits typically included in MEC plans are as follows:
- Doctor visits
- Emergency services
- Maternity and newborn care
- Prescription drugs
- Laboratory services
- Preventive and wellness services
- Mental health services
- Habilitative services (to help a person keep, learn or improve skills needed in daily living)
- Dental care
A number of Minimum Essential Coverage (MEC) plans are now available. Contact us for more information as you begin your 2016 business planning.