There are many different types of health insurance plans available on the marketplace, and it’s important to know the differences between them. With the Affordable Care Act (ACA) requirements making it mandatory for certain employers to offer access to affordable health care to full-time employees, it is pressing that you have an option available to avoid potential fees. One type of plan that can be a solution to this issue is a minimum essential coverage (MEC) plan. An MEC plan can ensure that you will not be responsible for fines associated with not providing coverage, while keeping your company within budget. Here are a few questions you should be asking when looking into a minimum essential coverage plan.
What Exactly Is A Minimum Essential Coverage Plan?
A minimum essential coverage plan is a type of plan that companies who have at least 50 full-time employees, also known as Applicable Large Employers (ALEs), obtain in order to protect themselves from two types of penalties associated with not offering coverage as dictated by the Affordable Care Act (ACA).
These two penalties are known as penalty A and penalty B. The fines incurred by employers have gone up just within the last year. These are the amounts for each penalty in 2021:
Penalty A: $225 per month ($2,700 annualized) per full-time employee minus the first 30
Penalty B: $338.33 per month ($4,060 annualized) per full time employee not offered “affordable coverage with “minimum value” who also goes onto the individual exchange and receives a tax credit
Penalty A is charged when an employer does not give the option for a minimum essential coverage to 95 percent of their full-time employees.
Penalty B applied when companies offer coverage to 95 percent of their full-time employees, but individually they were not provided with a minimum essential coverage option that qualified as affordable coverage with minimum value.
It is also important to note that penalty B is going to be capped at the maximum payment of penalty A. This means that penalty B will never be higher than penalty A.
These steep costs can easily be avoided by ensuring that you are offering an MEC plan to your employees. By simply covering your employees with this type of basic plan you will protect yourself and your company from having to pay these large sums of money as a penalty.
Questions To Ask When Looking For A Minimum Essential Coverage Plan
Like any insurance plan you are considering offering to your employees, it is going to be important that you do some research and look into the specifics of that plan. The best way to do this is to talk with an agent, since they should be very familiar with the options available and should be able to communicate with you about the details surrounding each plan. If you are considering an MEC plan, here are a few questions that you might have in order to get a full understanding.
Why Should I Offer A Minimum Essential Coverage Plan?
There are a few reasons that you would want to offer an MEC plan to your employees. The first, as stated above, is that it is going to make sure that you are covered and safe from having to pay any fines associated with the ACA requirements of providing coverage. The second reason is that you will be providing your employees a basic tier of coverage. This is going to help them feel secure with the knowledge that they have a plan with base level insurance coverage. The third reason that you should offer an MEC plan is that it is going to save you a lot of money compared to a lot of alternative plans. There are many options of plans that all fit within the ACA limitations, but an MEC plan is the lowest cost option that fits within those limitations.
Will All My Employees Receive Coverage?
Since 2014, the ACA has legally required employers with more than 50 full-time equivalent employees to offer their employees minimum essential coverage. To protect yourself from both penalty A and penalty B, it is required that all of your full-time employees enroll in your MEC plan (unless they can provide proof of coverage through another source other than the healthcare exchange).
Full-time employees are classified as anyone working an average of 30 hours in a week. If an employer is unable to know if a certain employee will meet this weekly requirement, then they can be calculated based on their monthly hours worked. Reaching 130 a month is enough to determine them as a full-time employee.
How Much Can I Expect To Pay?
The exact amount that each company is going to pay for this type of plan is going to vary based on a few different factors. Some of these factor are going to include:
- How many full-time employees are on your payroll
- Your specific insurance carrier
- Your location
Overall, going with an MEC plan is going to massively reduce your expenses compared to almost any other coverage plan available.
Speak To The Experts At New City Insurance
Reach out to the professionals at New City Insurance for more information on minimum essential coverage health plans. Since our founding in 2008, we have been committed to serving the insurance needs of all of our clients, regardless of needs or budget. We also aim to reshape the industry as we know it.
If you are seeking basic health insurance coverage so that you can avoid the penalties associated with not having it, then the experienced team at New City can help you acquire a minimum essential coverage plan. We provide a variety of group health insurance plans, (including HMOs, PPOs, and EPOs) as well as dental and vision plans. We offer both high-premium and low-premium plans, so you can choose the option that is most affordable for you.
New City’s agents are also highly knowledgeable about healthcare laws and regulations such as the ACA and are dedicated to helping clients remain compliant with all of them. Call New City Insurance today at (888) 210-2759 or contact us online to request a consultation.