H&W: Guidance on Minimum Essential Coverage

Guidance on Minimum Essential CoverageFinal regulations issued August 27th on the individual mandate included provisions clarifying what constitutes Minimum Essential Coverage under an eligible employer sponsored plan. This is relevant in determining shared responsibility obligations for employers (i.e., the play or pay mandate, which has been delayed until 2015).

The final rule remains largely unchanged from the original regulations. An employer-sponsored health plan offers Minimum Essential Coverage if it offers group health insurance or a self-insured health plan to its employees.  This does not, however, include coverage that consists solely of excepted benefits.

The final rule and accompanying fact sheet clarify that Minimum Essential Coverage does include plans offered by third parties on behalf of an employer, such as collectively bargained multi-employer plans and plans offered by PEOs (and presumably Multiple Employer Welfare Arrangements (MEWAs) although the regulations do not specifically mention them.)

The status of arrangements whereby an employer provides subsidies or funds a pre-tax plan for employees to use in the purchase of individual coverage is not addressed by the final regulations, although future guidance is anticipated.

Please note that the Shared Responsibility for Employers provisions also include requirements for a health plan’s minimum value, affordability and availability to full-time employees. These requirements were not addressed in this August 27th final rule on the individual mandate.  See the Compliancedashboard activity for more information.

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