The Nuts and Bolts
Minimum Essential Coverage (MEC) plans: A creative solution for employers to offer an affordable benefit plan that complies with the Patient Protection and Affordable Care Act (PPACA) guidelines and avoiding all associated penalties.
A Minimum Essential Coverage plan, also known as a “MEC,” is a self- funded employer sponsored benefit plan that meets the most basic coverage guidelines required by the Affordable Care Act. It is comprised of dozens of preventative care and wellness benefits, primarily screenings and immunizations. A MEC plan is NOT traditional, comprehensive medical insurance.
Effective January 1, 2016, any employer with more than 50 full time equivalent employees is required to offer insurance coverage to all or face steep penalties. MEC plans offer employers the creative ability to comply with the PPACA while potentially paying much less for their overall medical benefit program.
MEC plans are employer sponsored and the cost per employee is dramatically lower than that of traditional medical insurance. An employer will pay anywhere from $45 to $65 per employee to be covered under the basic plan. For a 30 year old, an employer would be facing a minimum of a $250 monthly premium for the most inexpensive Bronze plan with most traditional carriers. The COST of not complying with the Patient Protection and Affordable Care Act (PPACA) is much higher considering the A&B Penalties, and the California individual mandate.
Some employers take a more financially creative approach by utilizing a MEC plan as their base, while including a traditional comprehensive medical plan. The employee would have the opportunity to “buy-up” from the MEC to the fully insured group health plan.
The MEC satisfies the Penalty A. The “Qualified Plan,” which would be the traditional group health plan or something similar, is considered in ACA terminology as a Minimum Value Plan (MVP). Simply offering the MVP that meets the necessary criteria enables the employer to avoid Penalty B. Either plan satisfies the Individual Mandate penalty requirements for the employee.
Beckworth Beneficial is your wise choice for all things MEC. Having been in business since 1997, we’ve successfully navigated through the introduction and ongoing legislative changes to the Affordable Care Act.
“Cost transparency is big for me. It obviously is for Beckworth Beneficial, too. Before I even asked, Sam showed us a cost analysis of our group benefits, including our MEC plan. He helped us save us over 40% immediately on our monthly premiums, and that with expanded benefits.”
J.B., VP, Operations - Infinity Plumbing Designs, Corona, CA - 300 employees
Important Resources/Links for MEC Plans under the PPACA
Health for California
IRS Minimum Value and Affordability
Centers for Medicare & Medicaid Services
US Department of Labor ACA Implementation FAQ
Federal Register/Vol. 80, No. 134/Tuesday July 14, 2015/Rules and Regulations
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