Navigating the health insurance marketplace and the requirements under the Affordable Care Act can be challenging at times. Understanding the terminology alone can be confusing. So I wanted to put together some information to help you better understand the concept of minimum essential coverage.
When the Affordable Care Act took effect in 2014, the individual shared responsibility provision, better known as the individual mandate, required that nearly all U.S. citizens and those legally residing in the United States have health insurance. That’s where the term minimum essential coverage comes into play. For an insurance policy to count under the ACA, they had to meet minimum essential coverage guidelines. Initially, the IRS imposed a financial penalty on those who did not comply unless they were deemed eligible for an exemption. The fine was in effect from 2014 through 2018.
Though there is still an individual mandate in effect, since 2019, those who do not comply no longer face the financial penalty (with the exception of those who live in Washington, D.C., Massachusetts, Rhode Island, New Jersey, and California).
So why is minimum essential coverage still important if there’s no longer a penalty?
Currently, once the open-enrollment period passes, most individuals (and their dependents) can only make changes to their insurance plan when a qualifying event occurs. A qualifying event may make them eligible for a special enrollment period; however, in most cases, that qualifying event only opens a special enrollment period if you’ve already had minimum essential coverage in place before the qualifying event.
So, what counts as minimum essential coverage?
A wide variety of insurance plans are considered minimum essential coverage. Any health plan bought through the Health Insurance Marketplace and any job-based plan, which includes retiree and COBRA coverage, count as minimum essential coverage. Medicare Parts A, B, and C and most Medicaid plans also count as minimum essential coverage. To view the entire list of all the different types of plans that count, you can visit HealthCare.gov.
It’s important to remember that some plans which are considered minimum essential coverage are ACA compliant, while others are not. If you have questions about whether your health plan counts as minimum essential coverage, you can always contact your plan administrator to find out for sure.
If you are in need of coverage but looking for an alternative to the high-cost plans on the exchange, Enrollment First, Inc. can help. We offer a standalone product called MEC, which is not available on the exchange. MEC can qualify as ACA compliant minimum essential coverage. These plans can also cover sickness and, in some cases, hospitalization. If you’re looking for a more affordable product, MEC may suit your family better.
If you would like to learn more, visit Enrollment First on the web or give us a call at (865) 684-1030.