“Minimum Value” refers to employer-sponsored health insurance plans, now required for all businesses to offer to employees under the Affordable Care Act. Minimum Value is the most basic coverage an employer can offer to its employees, while still meeting the requirements set by health care reform. This is intended to give all employees access to affordable health insurance coverage.
The IRS has created an Minimum Value (MV) Calculator online to allow business owners to determine the Minimum Value of a plan. ERM Insurance Brokers are happy to walk your business through this process to help you to understand the best options for insuring your employees.
There are a number of circumstances and parameters that employer-sponsored health insurance must meet. The IRS clarifies that if an employer-sponsored plan contains Non-Hospital or Non-Physician Services clauses, the employee is unable to receive patient hospitalization or physician services, and the coverage is not Minimum Value. Therefore, an employer is unable to prove through the Minimum Value calculator that Non-Hospital/Non-Physician Services Plans fit within Minimum Value parameters. Transition relief is available for certain employers that used these plans prior to November 4, 2014.
A plan fails to provide the required minimum value through coverage if the plan’s share is less than 60% of benefit costs. Employers can calculate the Minimum Value through:
- Minimum Value Health Insurance Calculator
- A safe harbor checklist that can maintain that an employee’s contribution for self-only coverage does not exceed 9.5 percent of their income through simple, straightforward reviews of employer-sponsored plans
- Plans with nonstandard features must be assessed and granted an appropriate certification by a actuarial standards.
- Metal levels of determination:
- Bronze = 60 percent of the actuarial value with respect to essential benefits
- Silver = 70 percent of the actuarial value with respect to essential benefits
- Gold = 80 percent of the actuarial value with respect to essential benefits
- Platinum = 90 percent of the actuarial value with respect to essential benefits
If an individual is offered health coverage that is both affordable and meets the Minimum Value requirements, that individual is not eligible for an Exchange coverage subsidy.
The IRS is worried about some group health plan designs because they exclude substantial coverage for in-patient hospitalization services or physician services through the employer. Therefore, the Minimum Value calculator may not be applicable to Non-Hospital /Non-Physician Services to prove Minimum Value. The final regulations on group health care design will be clarified in 2015, and the IRS advises plans such as Non-Hospital /Non-Physician Services should not be adopted for 2015.
Relief from binding written agreements enrolling employees in such group plans is available through Notice 2014-69, and applies to plans accepted prior to November 4, 2014.
Employees covered with Non-Hospital /Non-Physician Services plans are considered to not have been offered Minimum Value coverage from their employer, for purposes of receiving a subsidy from Exchange. Employers cannot tell employees that coverage from Non-Hospital /Non-Physician Services plans precludes that employee from getting a premium tax credit. Employers must correct this if previously disclosed.
For a more thorough understanding of how Minimum Value health insurance plans affect your business, call a representative of ERM Insurance today at (949) 222-0444, or email an experienced broker at firstname.lastname@example.org.