Should You Consider a Minimum Value Plan?

If you’re in an industry with significant turnover and varied work schedules, a Minimum Value Plan may be an affordable way to meet the requirements of the Affordable Care Act.

A Minimum Value Plan is one that pays at least 60% of the total allowed cost of benefits expected under the plan. And while a traditional fully insured plan might cost $300 per month for employee-only coverage, a minimum value plan may cost just over $100 while still providing ACA-mandated care and coverage for inpatient hospitalization.

Determining Minimum Value

Businesses may need help determining that their plan reaches “minimum value” under the ACA. To meet this standard, the plan must pay at least 60% of the total allowed cost of benefits, which can be a moving target. Recent regulations also require that minimum value plans must offer substantial coverage for both inpatient hospitalization and physician services.

It should also be noted that minimum value plans must still offer “minimum essential coverage” and coverage that is considered “affordable” under the ACA. Offering such a plan, without meeting these requirements, may still expose your organization to liability under ACA employer shared responsibility rules. Though minimum value plans can be an affordable solution, future growth may be a concern, since only organizations with fewer than 50 full-time employees and full-time equivalents are exempt from ACA coverage requirements.

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