The minimum essential coverage rules will be important for various parts of the Affordable Care Act (ACA). Areas where this will apply includes the employer pay or play rules (or employer mandate), the individual mandate, reporting requirements and eligibility for premium tax credits.
Applicable large employers must offer minimum essential coverage to avoid the employer pay or play penalties. In order to meet the individual mandate, required individuals must enroll in minimum essential coverage. Finally, to receive a premium credit, an individual may not be eligible for minimum essential coverage, with some exceptions (like unaffordable employer coverage).
Generally, the ACA broadly defines minimum essential coverage to include:
- Medicare Part A and Medicare Advantage plans
- Most Medicaid coverage and the State Children’s Health Insurance Program (CHIP),
- TRICARE for Life,
- a health care program administered by the Department of Veterans Affairs (VA),
- the Peace Corps program,
- any government plan (local, state, federal) including the Federal Employees Health Benefits Program (FEHBP),
- any plan established by an Indian tribal government,
- any plan offered in the individual health insurance market (including exchange coverage),
- any employer-sponsored plan (including COBRA, insured active, self-insured active, and retiree coverage),
- any grandfathered health plan, and
- any other coverage recognized by the HHS Secretary.
Other examples of government plans that will be considered minimum essential coverage includes the following:
- State high-risk health insurance pools (only for a plan year beginning on or before December 31, 2014, unless recognized as minimum essential coverage by HHS)
- Health coverage provided to Peace Corps volunteers
- Department of Defense Nonappropriated Fund Health Benefits Program
- Refugee Medical Assistance
Examples of plans that may not be considered minimum essential coverage, especially when they provide limited benefits:
- Medicaid providing only family planning services*
- Medicaid providing only tuberculosis-related services*
- Medicaid providing only coverage limited to treatment of emergency medical conditions*
- Pregnancy-related Medicaid coverage*
- Medicaid coverage for the medically needy*
- Section 1115 Medicaid demonstration projects*
- Space available TRICARE coverage provided under chapter 55 of title 10 of the United States Code for individuals who are not eligible for TRICARE coverage for health services from private sector providers*
- Line of duty TRICARE coverage provided under chapter 55 of title 10 of the United States Code*
- AmeriCorps coverage for those serving in programs receiving AmeriCorps State and National grants
- AfterCorps coverage purchased by returning members of the PeaceCorps
An important point is that many "excepted benefit" plans will also not be considered minimum essential coverage. This includes programs like limited scope dental, vision, flexible spending accounts, and workers compensation programs even if they provide some "medical care." However, some excepted benefit plans will (like retiree only programs). Please see separate blog post on excepted benefits dated 8/13/13.
Another important point is that a plan does not lose minimum essential coverage status merely because it fails one or more Affordable Care Act requirements like essential health benefits, bans on pre-existing conditions, prohibitions on lifetime or annual limits, etc.
If you have questions on minimum essential coverage or the ACA, please contact Kinney & Larson.