From United Benefit Advisors Insight and Analysis Blog – by Bill Olson
The new health care law is confusing, in part because the language is confusing. Just take the terms “essential health benefits,” “minimum essential coverage” and “minimum value coverage” as an example – it’s not hard to see why employers’ heads are spinning.
While it might be easy to gloss over these phrases because they sound alike, it’s crucial to know that they are very different things. United Benefit Advisors has developed a resource that provides a complete definition of these three terms and included below is a preview of their meaning:
Essential Health Benefits: Beginning in 2014, policies in the individual and small group markets will be required to provide coverage for each of the 10 “essential health benefits” regardless of whether the policy is purchased through or outside the exchange. Self-funded plans (regardless of size), large group plans and grandfathered plans (regardless of size) do not have to cover all 10 essential health benefits, but they will not be allowed to put lifetime or annual dollar limits on an essential health benefit.
Minimum Essential Coverage: Beginning in 2014, most Americans will be required to have “minimum essential coverage” or pay a penalty with their tax return. (In 2014, the penalty will be the greater of 1 percent of income or $95.) A person will have minimum essential coverage if he or she is covered under an eligible employer-sponsored plan, an individual policy (through or outside the exchange) or a government plan (Medicare, Medicaid, CHIP, TRICARE, VA, etc.).
Minimum Value Coverage: Beginning in 2014, employers with 50 or more full-time or full-time equivalent employees that offer coverage that is less than “minimum value” will have to pay a penalty. (The penalty for not providing minimum value, affordable coverage is $3,000 for each full-time employee who obtains coverage through a public exchange and receives a premium tax credit/subsidy. Individuals will not be eligible for a subsidy if their employer offers them affordable, minimum value coverage.)
Be sure to download the full Common Terms guide for more detail on these important terms. This guide is part of a complete PPACA Resource Center that UBA has launched to help employers understand their obligations and opportunities under the Patient Protection and Affordable Care Act (PPACA).
The PPACA Resource Center includes up-to-date information on a number of elements, including:
- A PPACA Executive Summary, which provides basic information regarding the new health care reform law, decisions employers need to consider and resources available to help employers make these decisions.
- Key PPACA deadlines
- New rules affecting fully insured and self-funded plans
- Frequently asked questions regarding the summaries of benefits and coverage that are given to employees
The UBA resource center can be found at http://www.ubabenefits.com/Wisdom/ComplianceSolution/tabid/276/Default.aspx. Stay up to date on new information by subscribing to the UBA PPACA Resource Center RSS feed.