Minimum Essential Coverage (MEC) is health insurance that meets Affordable Care Act (ACA) requirements and is required for QSEHRA participation and most ICHRA reimbursements.
Why does MEC matter for QSEHRA and ICHRA?
For QSEHRA, you must have Minimum Essential Coverage (MEC) to receive tax-free reimbursements.
For ICHRA, you generally must be enrolled in qualifying individual health insurance or Medicare. Most ACA-compliant individual health plans that qualify for ICHRA also satisfy MEC requirements.
If you do not have qualifying coverage, your reimbursements may be denied or become taxable.
What health plans qualify as MEC?
The following types of coverage generally qualify as Minimum Essential Coverage:
ACA Marketplace plans purchased through Healthcare.gov or a state marketplace
Individual major medical plans purchased directly from an insurance carrier
Employer-sponsored group health plans
COBRA coverage
Medicare Part A
Medicare Part C (Medicare Advantage)
Most Medicaid plans
CHIP (Children's Health Insurance Program)
Coverage through a parent's plan
Most student health insurance plans
Most TRICARE plans
Certain Veterans Affairs health coverage programs
What health plans do NOT qualify as MEC?
The following types of coverage do not qualify as Minimum Essential Coverage when held by themselves:
Health care sharing ministries (such as Medi-Share)
Short-term medical insurance
Indemnity or cash benefit plans
Critical illness plans
Accident-only coverage
Vision-only insurance
Dental-only insurance
Discount medical programs
Disease-specific coverage
Workers' compensation coverage
If one of these plans is your only health coverage, you do not have MEC.
Examples of qualifying health coverage
The following are examples of Minimum Essential Coverage (MEC) plans:
Any health plan bought through the Health Insurance Marketplace
Individual health plans bought outside the Health Insurance Marketplace, if they meet the standards for qualified health plans
Any “grandfathered” individual insurance plan you’ve had since March 23, 2010, or earlier
Any job-based plan, including retiree plans and COBRA coverage
Medicare Part A or Part C (Note: Part B coverage by itself doesn’t qualify)
Most Medicaid coverage, except for limited coverage plans
Most student health plans (check with your school to see if the plan counts as qualifying health coverage)
Health coverage for Peace Corps volunteers
State high-risk pools for plan or policy years that started on or before December 31, 2014 (check with your high-risk pool plan to see if it counts as qualifying health coverage)
See a more detailed list of types of plans that do and don’t count as qualifying health coverage from the IRS.
What benefits does a MEC plan typically cover?
MEC plans generally provide coverage for the ACA's essential health benefits, including:
Outpatient care
Emergency services
Hospitalization
Maternity and newborn care
Mental health services
Prescription drugs
Rehabilitative services
Laboratory services
Preventive care
Pediatric services, including children's dental and vision benefits
Plans that cover only a limited set of benefits are typically not MEC.
How can I tell if my plan qualifies as MEC?
Follow these steps:
Review your insurance ID card, benefits summary, or plan documents.
Look for references to "ACA-compliant," "major medical," or "Minimum Essential Coverage."
Contact your insurance carrier and ask whether the plan qualifies as Minimum Essential Coverage.
Submit your Proof of Coverage through Take Command for review.
If you're unsure, Take Command's compliance team will review your documentation and determine whether your coverage qualifies.
Do dental and vision plans qualify as MEC?
No. Standalone dental and vision insurance do not qualify as Minimum Essential Coverage.
If dental or vision coverage is your only insurance, you do not have MEC and are not eligible for tax-free QSEHRA reimbursements.
What if I don't have MEC?
If you do not have Minimum Essential Coverage:
You are not eligible for tax-free QSEHRA reimbursements.
Your Proof of Coverage may be declined.
You may need to enroll in qualifying health insurance before receiving reimbursements.
There are no exceptions for employees who only have short-term plans, sharing plans, dental plans, or vision plans.
To participate in a QSEHRA, you must have qualifying MEC coverage.