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What is Minimum Essential Coverage?
Minimum essential coverage (MEC) is the phrase given to any insurance plan that meets the ACA requirements for having health coverage. MEC is sometimes called ‘qualifying health coverage.’
Prior to 2019, failing to have MEC would result in a penalty. This penalty no longer applies.
Most health insurance plans sold today are considered MEC, including all those purchased on the Marketplace.
What does MEC include?
The ACA requires that all MEC plan include the following:
- Affordability. The plan can not cost more than a set percentage of a person’s monthly income. This percentage changes each year. In 2024 it is 9.12%.
- Minimum value. The plan must pay for at least 60% of covered benefits.
- Fair premiums. The means that the insurance company cannot charge you too much for coverage, regardless of affordability.
- No exclusions. Plans cannot exclude pre-existing conditions.
- No discriminations. Plans cannot turn you away or charge you more based on your health status.
- No limits. Plan cannot have an annual or lifetime coverage limit.
- Access to appeals. You must have a way to appeal coverage decisions.
- Essential health benefits. These are a set of services that must be covered by any plan. You can read about these in detail here.
What type of plans are not considered MEC?
Most of the health insurance plans offered through an employer, and all of the plans through the Marketplace, as well as most private health insurance options, are MEC. There are insurance policies out there though that do not carry this label.
Supplemental insurance, such as critical illness or accidental insurance, is not MEC.
Short-term medical insurance is not MEC because it is only temporary.
Limited benefit plans, such as disability or worker’s compensation, as well as plans that cover only specific conditions are all not considered MEC.
Don’t take it the wrong way, all of these plans do something great, they just do not fall into the category of MEC, but that doesn’t make them inferior.
Takeaways
Minimum essential coverage was a breakthrough in health coverage. For many Americans it allowed them access to health care for the first time on the basis of pre-existing conditions. While the individual mandate has been repealed, the requirements that plan still conform to the MEC requirements holds.
If you have questions if your plan is MEC, or any other questions, give us a call and we can talk.
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