"Minimum Value" – Guidance for Large Employers

July 2, 2013
3 min read

Meeting Minimum Value

The Patient Protection and Affordable Care Act (PPACA) benefit standards for large employers, 50 or more full-time-equivalent employees, have begun taking shape and will differ from those of small employees. To avoid what could amount to be substantial penalties and ensure that health care plans comply with PPACA, employers should model their plans after one of several “safe harbor” designs, which will be developed by the Internal Revenue Service (IRS). All plans offered by large employers must meet standards for “minimum value.”
For a large employer, the plan must cover at least 60% of an employee’s health care costs in a given year – with the employee responsible for the balance through a combination of deductibles, co-pays and co-insurance (often referred to as a “60% actuarial value”).
Large employers can use any of the following to ensure their plans comply with the Affordable Care Act:

  • Using the Minimum Value Calculator provided by the Department of Health and Human Services (HHS)
  • Using one of several “safe harbor” methods to be defined by HHS – we will communicate guidance once this is established
  • Offering a plan that is accepted onto any of the “metal” coverage tiers on a public Health Insurance Exchange. Plans on the public exchanges are categorized into four tiers, from “Bronze” to “Platinum,” with increasing richness of coverage offered.

What does this mean for you, the employer?
You need to make sure that your benefits plans meet the minimum value standard and modify accordingly if they do not. The penalties for non-compliance are $3,000 for each employee who gets coverage and a subsidy through the Exchange.
If you have questions regarding compliance as a large employer, call us at 1.800.250.2741 or emailsolutions@gsanational.com.

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