ACA. HSA. HDHP. PPO. HMO.*1 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 follows2:
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 each3:
- 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.4 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).
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.