Beckworth Beneficial Blog

Posted by: Admin

Posted on: Apr 12, 2024 at 5:53 pm

Minimum Essential Coverage Plans

Not all health insurance plans are created equal. Throughout the history of health insurance, many regulations, standards, and rules have evolved through legislation, such as the Affordable Care Act (ACA). One particularly essential health insurance standard established by the ACA is minimum essential coverage.

Understanding Minimum Essential Coverage and the Individual Mandate

Minimum essential coverage refers to health insurance policies that meet the ACA’s shared responsibility provision. Minimum essential coverage was required through the ACA’s individual mandate prior to Dec. 31, 2018, unless individuals were willing to pay a tax penalty or were eligible for an exemption. However, the Tax Cuts and Jobs Act passed in 2017 lowered the aforementioned penalty to $0. As such, while the individual mandate technically still exists, most people are no longer obligated to adhere to it.

Does Minimum Essential Coverage Still Matter?

Although the individual mandate is no longer nationally enforced, several states have retained their own requirements, including California, Massachusetts, New Jersey, Rhode Island, Vermont and the District of Columbia. As such, residents of those states should ensure they are complying with minimum essential coverage.

Even those who may no longer have direct financial implications regarding minimum essential coverage should still strongly consider maintaining appropriate insurance. While many employers and the Health Insurance Marketplace offer an annual Open Enrollment period during which employees, individuals and families may purchase plans or make adjustments to their coverage, certain life events (e.g., marriage, divorce or having a child) may trigger a special enrollment period, providing policyholders with additional opportunities to make changes. However, these special enrollment periods may only be available to those who had health insurance satisfying the minimum essential coverage standards prior to the event in question.

Additionally, applicable large employers (ALEs)—those with at least 50 full-time or full-time-equivalent employees—are still subject to certain responsibilities when offering a group health insurance plan to employees that meets minimum essential coverage standards. If an ALE does not offer such coverage, it’s required to make a shared responsibility payment to the IRS. ALEs must also document and report information about their minimum essential coverage to the IRS.

What Health Plans Qualify as Having Minimum Essential Coverage?

Although individuals should work with a qualified insurance professional to understand the details of their specific policy, the following types of health insurance plans typically include minimum essential coverage standards:

• Employer-sponsored plans
• Individual and family plans sold on the Health Insurance Marketplace
• Medicare Part A plans
• Medicare Advantage plans
• Medicaid plans
• TRICARE plans
• Children’s Health Insurance Program plans

Health insurance policies do not necessarily need to comply with the ACA to fulfill minimum essential coverage. For example, some individual health plans purchased before the enactment of the ACA and subsequently grandfathered in may meet relevant standards.

In many cases, health plans that do not include major medical coverage, such as short-term health insurance, critical illness insurance and accident supplement insurance, do not meet minimum essential coverage standards.

We’re Here to Help

At Beckworth Beneficial, we understand that health insurance and its various rules and requirements can be a complicated and even intimidating subject. With this in mind, our team is ready to provide you and your family or business with the time and attention needed to help you understand and address your unique coverage needs. Visit our website or call 559-389-5837 to get started.