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» Minimum Essential Coverage

Minimum Essential Coverage

man looking up a Minimum Essential Coverage PlanWith the implementation of the Affordable Care Act (ACA), large employers (above 50 full-time equivalent employees) are now required by law to offer health insurance to their employees. However for many businesses, it can be nearly impossible to find a health insurance plan within their budget. Businesses then have to decide between providing health insurance to their employees at a cost they cannot afford or potentially face substantial fines. This is why New City Insurance offers minimum essential coverage plans, which meet the requirements of the ACA and protect companies from penalties at a cost much lower than that of a traditional health insurance plan.

What Is A Minimum Essential Coverage Plan?

A minimum essential coverage (MEC) plan is a type of health insurance plan for companies known as Applicable Large Employers (ALEs) who are required to offer health insurance to their employees but are unable to do so because the associated costs are too high for them.

Under the Affordable Care Act, all companies with 50 or more full-time equivalent employees are considered “Applicable Large Employers.” ALEs can face one of two types of penalties for failing to offer adequate coverage. The “A penalty” applies when an employer does not provide minimum essential coverage to at least 95 percent of its full-time employees. The “B penalty” is issued when an ALE offers coverage to at least 95 percent of its FTEs but each employee was not offered a minimum essential coverage option that was deemed “affordable” and that provided “minimum value.”

women going to doctor with her minimum essential coverage planFor 2021, the A penalty is increasing to $225 per month ($2,700 annually) per employee that is not offered minimum essential coverage minus the first 30 employees. The Penalty B amount for 2021 is $338.33 per month ($4,060 annualized) for every employee not offered minimum value coverage that also goes to the healthcare exchange and receives a tax credit. The B Penalty is capped at the full cost of the A Penalty, so the fine for the B Penalty can never be higher than the fine for the A Penalty. Investing in MEC plans could ultimately save your organization money in the long run while simultaneously giving your employees peace of mind knowing they have access to basic preventive care.

In short, MEC plans protect ALEs from Penalty A because they provide minimum coverage in accordance with the ACA. They also protect ALEs from Penalty B because this type of penalty occurs if an employee is not offered affordable minimum value coverage and enters the individual exchange (thereby receiving a tax credit to help pay for coverage). When an employee is enrolled in an MEC plan, he/she no longer qualifies for public exchange-related tax credits.

What Is Covered With A Minimum Essential Coverage Health Plan

Minimum essential coverage health plans typically cover preventative and wellness services. Overall, MEC plans are a perfect fit for companies that don’t want to pay for a comprehensive plan, but want to avoid the penalties otherwise.

Are You Compliant With A Minimum Essential Coverage Plan?

If you are responsible for 50 or more employees and looking for an affordable health plan then an MEC plan could be the best option for you. Since the ACA was passed, all major health plans – including minimum essential coverage plans – are obligated to help all enrollees pay for certain medical services, regardless of their health status. This is the essence of ACA compliance. For more information on minimum essential coverage plans and compliance with this law, you can visit healthcare.gov.

Contact New City For More Information

Reach out to the professionals at New City Insurance for more details on minimum essential coverage and compliance with the ACA. We offer a variety of affordable group health insurance plans so we are sure to find the right fit for you and your business. We are ready to work with you and talk through your options to ensure that you are protected from any unforeseen penalties. Call New City Insurance today at (888) 210-2759 or contact us online to request a consultation.

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Google Rating
4.9
New City Insurance
New City Insurance
4.9
Mary Jane Deyette
Mary Jane Deyette
00:57 11 May 20
Jeff Stoltey is so awesome...even thru my company had only two employees, he took the time each year to research and find the best plan for us. The only reason I am leaving New City Insurance is because we no longer have any employees. Thank you Jeff
Tricia DeYoung
Tricia DeYoung
19:49 13 Feb 20
I was very thankful I inquired about this info. with Brendan. He was very helpful so I understand the benefits available much better now. Thank you Brendan.
Alma Ortiz
Alma Ortiz
22:25 23 Feb 20
Brendan was awesome! I couldn't figure out how to pick my plan and he returned my call on a weekend to help me. Outstansing service!
B Bayer
B Bayer
17:43 24 Sep 19
NCI handled almost everything from start to finish. Clayton and Brendan made the plans easy to understand and walked me through the application process. They got me my ID numbers before my cards arrived so that I could keep an appointment I had already scheduled. My last broker wouldn't have done that. 5 stars!
jessica kavanagh
jessica kavanagh
19:53 13 Feb 20
Brendan was so helpful I definitely recommend him if you’re in need of good help and getting it done promptly. Thankyou so much again.
Jessica Lehr
Jessica Lehr
03:36 07 Jun 19
Our staff was interested in a health plan, but we didn't know how beneficial a solid employee benefits package would be for our business to expand. We'd lose prospective employees because they had more options for their medical insurance which was sometimes more valuable than more pay. The New City team was amazing and gave us as many affordable options as possible so that everyone had their needs met.
T W
T W
22:32 30 Aug 20
I love New City Insurance. I never had a good experience dealing with insurance brokers until I started working with Brendan. He’s awesome! He is patient with me and takes the time to answer all my questions. I’m very grateful for all his help and hard work!
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