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What Is A Minimum Essential Coverage Plan?

February 4, 2021, by New City Insurance

two people looking up what a minimum essential coverage plan isSince the Affordable Care Act (ACA) fully went into effect in 2014, health insurance companies cannot deny coverage to individuals with preexisting conditions such as cancer, epilepsy, and diabetes. All ACA-compliant plans are now obligated to help all participants pay for medical care, regardless of their health status. One choice of the plans that meet certain ACA requirements are called Minimum Essential Coverage (MEC) or “skinny” plans. Below is a closer look at what this is and how they work.

What Is Minimum Essential Coverage?

Minimum Essential Coverage (MEC) is insurance that meets the basic requirements set forth by the Affordable Care Act (ACA) for offering health coverage to a company’s employees. The ACA was designed to give individuals greater access to health insurance plans and provisions. All ACA-compliant health plans must offer their enrollees assistance when paying for certain medical services, regardless of their health status. A lot of plan options that employers choose to offer their employees are going to be considered well above the minimum essential coverage threshold, but an MEC plan is going to include just the basics.

What Is A Minimum Essential Coverage Plan?

group of working people learning what Minimum Essential Coverage Plan isA minimum essential coverage health plan is a type of plan that employers enroll in to protect themselves and their company from the penalties that come from the ACA for not providing coverage. MEC plans can provide your employees with basic health coverage while potentially saving your organization a substantial amount of money in the long run.

These basic plans are offered by organizations known as Applicable Large Employers (ALEs), which are companies that have at least 50 equivalent full-time employees. These plans cover preventive and wellness tests and treatments. Although the overall coverage scope can seem limited, it is enough to ensure that you are not going to be subject to any penalties that come from the ACA.

Penalties for not offering at least an MEC plan or health plan at all to your employees can be extreme. These could include two main types of penalties, penalty A and penalty B.

Penalty A occurs when a company that is considered an ALE does not offer MEC to at least 95 percent of its full-time employees. The cost of this has increased in 2021 to be $225 per month, or $2,700 for the year for each employee (minus the first 30 employees) that is not offered minimum essential coverage.

Penalty B takes place when ALE companies do offer at least 95% of their full-time employees coverage, but each individual was not given a health plan that was deemed “affordable” or that provided “minimum value”. This cost was also raised in 2021, and can run a company $338.33 a month or a total of $4,060 per year for each employee that is not given the option of a minimum value coverage who also goes to the healthcare exchange and receives a tax credit.

Penalty B has a max limit of the full cost of Penalty A. This ensures that the fine for penalty B will not be more than the fine for penalty A. A minimum essential coverage plan makes sure you are protected from these potential penalties.

Who Should Consider A Minimum Essential Coverage Plan?

happy women learning about her minimum essential coverage planYou should consider getting an MEC plan if your company has over 50 full-time employees and are looking for a way to get around significant costs for your employee health care and benefits. An MEC plan is an affordable option that offers base value coverage for all your employees.

A full-time employee is considered to be anyone who works a minimum of 30 hours in one work week or 130 hours per month.

How Does Minimum Essential Coverage Work?

With an MEC plan you and your employees are going to receive coverage on a basic amount of health benefits. You need to guarantee that you are providing all your employees that are considered full-time with the same access and coverage type. An MEC plan is the best option for you to guarantee the required amount of coverage to all your employees while not having to pay enormous amounts of money out of your company’s pocket.

Talk With New City Insurance About Minimum Essential Coverage

Speak to the experts at New City Insurance in San Diego for more information on minimum essential coverage plans. Since our founding in 2008, we have been dedicated to serving the insurance needs of our clients while reshaping the industry as we know it.

At New City, we are proud to offer a wide variety of benefits, including group health insurance, wellness plans, and 401k & retirement plans. We provide both high-premium and low-premium plans, so you can choose the option that is most affordable to you. Our group health insurance plans include HMOs, PPOs, and EPOs. We have advanced benefits administration technology and are committed to remaining compliant with all federal healthcare laws and regulations, including the ACA, COBRA, HIPAA, the Employment Retirement Income Security Act (ERISA), and the Family and Medical Leave Act (FMLA).

Call New City Insurance today at (888) 210-2759 or contact us online to request a consultation or to learn more about our insurance offerings.

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Filed Under: Insurance,  Minimum Essential Coverage

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Carol Zhang
Carol Zhang
04:29 06 Mar 22
As a rapidly expanding national media organization, the employee benefits strategy and administration that New City has provided us during our growth has been invaluable. They have been proactive about informing us of the different benefit strategies available to us as we grow as well as managing the additional compliance laws and reporting requirements at each stage of our growth.
Claudia Villalobos
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New City Insurance made navigating through all the health insurances super EASY. Their documents are highly informative, professional, and easy to work with. Thank you for making the process of choosing a health plan so simple. You guys are THE BEST!
Philippe Salas
Philippe Salas
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I never expected to have a good time talking to an insurance salesman, but let me tell you Brendan was quite the treat. He was very helpful explaining the options and has a wonderful sense of humor. I hope to speak with him every time I call.
Jennifer Polito
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Super easy enrollment process. Fast and friendly customer service. If you are looking for an insurance company that is there for you every step of the way I highly recommend New City Insurance.
Rocky Salas
Rocky Salas
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So friendly, I hope to speak to him again in all my future insurance needs.
Rocky Salas
Rocky Salas
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So friendly and soft spoken. I hope to speak to him again in all my future insurance needs.
Jose Brena
Jose Brena
13:20 06 Jan 22
Eric Calciano has been extremely helpful in finding and selecting the right insurance coverage for our company. With many options out there Eric assisted us on getting a low cost provider saving more than 20% than from our competitors and providing excellent coverage for our employees.
Anastasia Beaverhousen
Anastasia Beaverhousen
17:05 28 Dec 21
Signing up for insurance was quick and easy. Felicity Sundsboe
SFCC
SFCC
22:08 29 Nov 21
Jeff Stoltey and his team provide excellent customer service. Jeff has always provided my company SFCC with straightforward options. I went to a larger insurance company only to RUN BACK to Jeff at New City Insurance. I recommend them to anyone needing insurance without hesitation.
Kevin Luby
Kevin Luby
19:13 22 Oct 21
Quick, easy & informative. We were able to secure quality insurance for our small business on a tight deadline. Thanks for the help New City.
Theresa Ruybol
Theresa Ruybol
19:30 01 Jul 21
Eric was so great with us. He was very patient and kind as we are a newer smaller organization who is growing rapidly. With that said, we had made our inquiry, he had great rapid response and mostly had to wait on me. Any request that we made and/or questions we had, he was great answering and helping us understand. Then when we were ready for all documents and to move forward, Brendan helped with getting that together and the two of them worked their magic on New City's end to notify me of what was needed, assist me in that process and confirming that all was complete and approved for the coverage. I just want to say thank you all again so much, as insurance has always been confusing to me, and you all made that process go a lot smoother.Thank you
Andrea Ordendorff
Andrea Ordendorff
21:06 07 May 21
I've been working with both Clayton and Brendan for well over a year. As the purchase of our dental practice was delayed well over 14 months they both patiently supported me and continued to make themselves available. When we were officially ready to sign up they made the whole process seamless and super easy. This team is highly knowledgeable, professional, supportive, and efficient! I can't thank them enough for everything they've done.
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!
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
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!
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.
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.
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 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.
Mike McClay
Mike McClay
19:36 03 May 19
My employer uses New City as their insurance broker, and I'm always amazed when I call in for assistance by how knowledgeable and attentive their staff is with my requests. Their online benefits platform makes selecting insurance plans pretty darn easy. I would highly recommend their services.
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