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What Is Minimum Essential Coverage?

Jul 23, 2021 3 min read Zina Kumok

Key takeaways

  • Minimum essential coverage refers to certain procedures, conditions or services that health insurance companies must cover and individuals must have.
  • Not all health insurance meets the minimum essential coverage requirement.
  • Employer-sponsored health insurance has minimum essential coverage.

 

When searching for health care, you may run across the term minimum essential coverage (MEC). Resulting from the Affordable Care Act (ACA) of 2010, MEC refers to a set of requirements that many health care plans must meet to comply with the ACA.

At the time, MEC meant you’d pay a penalty if your coverage didn’t meet the minimum. That stipulation, along with other rules, has since changed for most people.

Knowing the current MEC requirements can help you with your health care search.

 

 

Minimum essential coverage explained

To meet standards set by the ACA, health insurance plans must provide a stated level of coverage. Plans offered by the government, employers or through the federal Health Insurance Marketplace® (HealthCare.gov Opens in new window) must cover certain services and procedures. Health plans for military members and veterans have minimum essential coverage as well.

MEC doesn’t apply to some types of health insurance Opens in new window, including short-term health, vision- or dental-only, critical illness, worker’s compensation and medical discount plans.

Before 2019, individuals with health insurance that didn’t meet MEC standards had to pay a fine when they filed their federal taxes Opens in new window. Today most people don’t get dinged for that.

Even so, some states have kept the MEC requirement. Those living in California, Massachusetts, New Jersey, Rhode Island and Vermont—as well as the District of Columbia— face potential state fines for not having enough coverage.

 

What does minimum essential coverage include?

Most MEC plans cover 10 essential health benefits:

  1. Preventative and wellness visits, including annual physicals, Pap smears and some cancer screenings
  2. Prescription drugs
  3. Maternity and newborn care
  4. Mental and behavioral health services, including substance abuse treatment
  5. Pediatric care, including dental and vision benefits
  6. Emergency room services
  7. Hospitalization and surgery
  8. Outpatient care or ambulatory patient services, including hospital visits that don't require an overnight stay
  9. Services, equipment and devices to aid those with injuries, chronic conditions and disabilities
  10. Lab work and imaging

Even though a health insurance company must cover all these services and procedures under MEC rules, they don’t have to cover 100% of the cost. The covered amount will depend on the need, ACA rules and the specific type of plan. For example, preventative services, like flu shots and annual physicals, are always free if you have a MEC-standard plan. How much you pay out of pocket for certain surgeries, however, will depend on the details of your plan (even if it provides MEC-level coverage).

Another important rule to keep in mind: Plans that meet MEC standards must provide dental coverage to children Opens in new window—but they don’t have to do so for adults. So, before you opt into a plan, find out of it covers adult dental care.

 

Plans that qualify for MEC

In general, MEC plans typically offer greater coverage and reduced out-of-pocket costs for most health care needs. There’s no one type of MEC plan. Instead, plans vary—so check the details before you buy.

As you start your search, plans that will qualify as MEC include:

  • Employer-sponsored plans
  • Individual major medical plans
  • Tricare
  • Medicare
  • Most Medicaid plans
  • Children's Health Insurance Program (CHIP)

 

How do costs work?

Because they offer more coverage, it’s common for MEC plans to have higher premiums than other plans, like short-term or catastrophic health insurance. (The latter plans have higher out-of-pocket costs for regular care.)

MEC plans can also vary widely depending on where you live and the type of policy. A MEC bronze-level plan, for example, will have lower premiums than a gold-level plan from the same provider. And employer-based plans are often cheaper than plans offered through the health care marketplace, even if they both provide identical coverage.

The Biden administration recently expanded Opens in new window the income limits to receive a subsidy through the Health Insurance Marketplace: If your household income is 400% above the federal poverty level, you may qualify. This can make MEC plans more affordable for people who don’t have access to traditional employer coverage.

 

How to find plans with minimum essential coverage

If your (or your spouse’s) employer offers health insurance, you can find minimum essential coverage through your benefits department. Note that you can sign up for coverage only during your annual open enrollment period or if you have a special qualifying event, like changing jobs, marriage, divorce or birth of a child.

If you’re a freelancer, contractor or gig worker, you can sign up for an MEC plan through HealthCare.gov Opens in new window. All Marketplace plans (including high-deductible ones, which also enable triple-tax-free health savings accounts [HSAs]), offer MEC coverage.

 

What you can do next

If you’re shopping for a new health care plan, contact the provider directly and ask if it meets MEC standards. You can also talk to a health insurance expert Opens in new window to learn about your options and find out if the plan you’re in—or that you want—is MEC compliant.

Footnotes

Zina Kumok is a freelance writer specializing in personal finance. She has written for the Associated Press, Indianapolis Monthly and more. She also writes a blog about how she paid off her student loans in three years.

 

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