What Is Minimum Essential Coverage?

By hrlineup | 05.12.2019

The minimum essential coverage is basically the type of health insurance policy whose requirements an individual needs to meet under the Patient Protection and Affordable Care Act (ACA), U.S. health reform. A minimum essential coverage should be maintained at all times to avoid a penalty of 2.5% of yearly household income or even a maximum of $695 per adult, $347.50 per child under 18, to $2,085 per household. To avoid these penalties, it is advisable to enroll in a plan that already qualifies as the minimum essential coverage, which sometimes is called qualifying health coverage.

For a medical health insurance plan to qualify to meet the minimum essential coverage standards, it must have an Actuarial Value of 60% or more. The actuarial value is basically a measure of the percentage of the expected health care costs that a certain health plan will cover for the standard population. What this means is that if your plan as an actuarial value of 60%, your insurer will pay an average of 60% for all the covered medical costs on that plan, and you will only be responsible for the remaining 40%.

Again, your insurance plan must cover the 10 essential health benefits to qualify to meet the minimum essential coverage standards. These are:

  • Ambulatory patient services (outpatient services)
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance use disorder services, including behavioral health treatment
  • Prescription drugs
  • Rehabilitative and habilitative services (services that help patients acquire, maintain, or improve skills necessary for daily functioning) and devices
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services, including oral and vision care

How to tell if you have the minimum essential coverage

The way you obtained the coverage is the main determinant of whether or not the insurance qualifies for the aca minimum coverage.

Today, any insurance health plan offered to you by your employer qualifies as a minimum essential coverage. These kinds of minimum essential coverage employer plans include:

  • Coverage for current employees
  • Coverage for retirees
  • COBRA continuation coverage that allows former employees to hold onto their health insurance for a certain period of time after leaving an employer

Again, college students who got health insurance from their colleges are also considered
to have minimum essential coverage plans.

All government health insurance programs provide the minimum essential health care
coverage. These programs usually include:

  • Medicare that provides benefits to people over 65 years of age and the disabled
  • Medicaid, which is a medical plan for low-income earners
  • Tricare, which covers the members of the military service and their families
  • The Children’s Health Insurance Program, a federal-state plan meant to cover children and pregnant women in lower-income families
  • Veterans’ health care benefits
  • Peace Corps volunteers’ health insurance

Having an insurance cover that meets the government standard is a mandate for everyone in the United States. If therefore you do not qualify for the above plan and you have an individual plans, just be sure that it is meeting the minimum health care insurance requirements.

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