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What is a MEC Health Plan?

What is a MEC Health Plan?

Posted Jan 03, 2017 by Jenifer Dorsey

Minimum essential coverage under the ACA

ACA. HSA. HDHP. PPO. HMO.* Health insurance terminology loves a nice abbreviation. Another one you may hear or see is MEC, otherwise known as minimum essential coverage, otherwise known as what the Affordable Care Act requires most Americans to obtain under the individual shared responsibility provision.

But what is it exactly?

Minimum essential coverage defined

HealthCare.gov, the federally facilitated health insurance exchange created under the ACA, defines MEC as follows[1]:

Any insurance plan that meets the Affordable Care Act requirement for having health coverage. To avoid the penalty for not having insurance you must be enrolled in a plan that qualifies as minimum essential coverage (sometimes called “qualifying health coverage”).

So, does that mean that all types of insurance qualify as minimum essential coverage? No.

What are the different types of MEC plans, and where can I get them?

Minimum essential coverage is more than the individual health insurance plans that many refer to as “Obamacare plans,” which are sold on or away from the ACA exchanges. MEC falls into these categories—examples of coverage within categories are listed below each[2]:

Employer-sponsored coverage

  • Group health insurance coverage for employees
  • A self-insured group health plan for employees
  • COBRA coverage
  • Retiree coverage
  • Coverage under an expatriate health plan for employees

Individual health coverage

  • Health insurance purchased directly from an insurance company
  • Health insurance you purchase through the Health Insurance Marketplace (i.e., state-based and federally facilitated exchanges)
  • Health insurance provided through a student health plan
  • Catastrophic plans
  • Coverage under an expatriate health plan for non-employees such as students and missionaries

Coverage under government-sponsored programs

  • Medicare Part A coverage
  • Medicare Advantage plans
  • Most Medicaid coverage
  • Children’s Health Insurance Program (CHIP) coverage
  • Most types of TRICARE coverage

Visit IRS.gov for a comprehensive MEC chart.

What doesn’t count as MEC?

Coverage that provides limited benefits (as opposed to benefits as outlined by the ACA) does not count as minimum essential coverage.[3] Examples include standalone dental and vision, accident or disability income, short term medical, critical illness, hospital indemnity and medical gap insurance plans. Additional exclusions may be found at IRS.gov.

If you are unsure whether or not a plan qualifies as minimum essential coverage, contact the company that provides it. You may want to work with a health insurance producer (i.e., agent or broker) who can help you find minimum essential coverage as well as plans that complement it and help you reduce your out-of-pocket healthcare spending (e.g., hospital indemnity, dental, critical illness).

 

See what supplemental is all about

 

When to buy individual MEC plans

If you do not have access to minimum essential coverage through an employer, programs such as Medicaid or Medicare, or other sources, you can find individual MEC plans on and away from the ACA-created state-based and federally facilitated exchanges. Keep in mind that only plans sold through these exchanges are eligible for income-based subsidies.

Open enrollment for 2017 coverage runs through January 31. After that date, you must experience a qualifying life event to become eligible for a special enrollment period.

 

Find MEC with a local agent

 

 

 


* In respective order: Affordable Care Act, health savings account, high deductible health plan, preferred provider organization, health management organization

[1] HealthCare.gov. “Glossary: Minimum Essential Coverage (MEC).” https://www.healthcare.gov/glossary/minimum-essential-coverage/

[2] Internal Revenue Service. “Individual Shared Responsibility Provision – Minimum Essential Coverage.” Last reviewed or updated Dec. 13, 2016. https://www.irs.gov/affordable-care-act/individuals-and-families/aca-individual-shared-responsibility-provision-minimum-essential-coverage

[3] Ibid.

This document is for general informational purposes only. While we have attempted to provide current and accurate information, this information is provided "as is" and we make no representations or warranties regarding its accuracy or completeness. The information provided should not be construed as legal or tax advice or as a recommendation of any kind. External users should seek professional advice from their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.

SHORT-TERM MEDICAL EXPENSE (STM)
THIS IS A SHORT TERM HEALTH BENEFIT PLAN THAT IS NOT INTENDED TO QUALIFY AS THE MINIMUM ESSENTIAL COVERAGE REQUIRED BY THE AFFORDABLE CARE ACT (ACA). UNLESS YOU PURCHASE A PLAN THAT PROVIDES MINIMUM ESSENTIAL COVERAGE IN ACCORDANCE WITH THE ACA, YOU MAY BE SUBJECT TO A FEDERAL TAX PENALTY. ALSO, THE TERMINATION OR LOSS OF THIS POLICY DOES NOT ENTITLE YOU TO A SPECIAL ENROLLMENT PERIOD TO PURCHASE A HEALTH BENEFIT PLAN THAT QUALIFIES AS MINIMUM ESSENTIAL COVERAGE OUTSIDE OF AN OPEN ENROLLMENT PERIOD. THIS POLICY INCLUDES A PRE-EXISTING CONDITION EXCLUSION PROVISION.

HOSPITAL INDEMNITY
THIS IS A SUPPLEMENT TO HEALTH INSURANCE AND IS NOT A SUBSTITUTE FOR THE MINIMUM ESSENTIAL COVERAGE REQUIRED BY THE AFFORDABLE CARE ACT (ACA) LACK OF MAJOR MEDICAL COVERAGE (OR OTHER MINIMUM ESSENTIAL COVERAGE) MAY RESULT IN AN ADDITIONAL PAYMENT WITH YOUR TAXES.

DENTAL
THIS PLAN DOES NOT MEET MINIMAL ESSENTIAL COVERAGE REQUIREMENTS FOR PEDIATRIC DENTAL SERVICES IN ACCORDANCE WITH THE AFFORDABLE CARE ACT (ACA) PROVISIONS.

CRITICAL ILLNESS
A CRITICAL ILLNESS INSURANCE PLAN PAYS OUT LUMP-SUM CASH BENEFITS UPON DIAGNOSIS OF CERTAIN COVERED ILLNESSES AS SHOWN IN THE CERTIFICATE. THIS PRODUCT IS NOT INTENDED TO QUALIFY AS THE MINIMUM ESSENTIAL COVERAGE REQUIRED BY THE AFFORDABLE CARE ACT (ACA).

About The IHC Group
Independence Holding Company (NYSE: IHC) is a holding company that is principally engaged in underwriting, administering and/or distributing group and individual disability, specialty and supplemental health, pet, and life insurance through its subsidiaries since 1980. The IHC Group owns three insurance companies (Standard Security Life Insurance Company of New York, Madison National Life Insurance Company, Inc. and Independence American Insurance Company) and IHC Specialty Benefits, Inc., which is a technology-driven insurance sales and marketing company that creates value for insurance producers, carriers and consumers (both individuals and small businesses) through a suite of proprietary tools and products (including ACA plans and small group medical stop-loss). All products are placed with highly rated carriers.

IHC Specialty Benefits, Inc.
IHC Specialty Benefits, Inc., doing business as Health eDeals Insurance Solutions is a full-service marketing and distribution company that focuses on small employer, individual and consumer products. Health eDeals markets products via general agents online, telebrokerage, advisor centers, private label and directly to consumers. For more information about Health eDeals visit http://www.HealtheDeals.com.