What is the "Individual Mandate"?
Before 2019, the Affordable Care Act required that Americans maintain "Minimum Essential Coverage" (MEC) or pay a tax penalty. This was called the "individual mandate" in the news. Here is a reminder of what Minimum Essential Coverage is.
Starting in 2019, the tax penalty was set to $0, effectively killing the individual mandate. It's still on the books, just with a $0 tax penalty. That means that if you do not have insurance at all, or if your insurance does not meet Minimum Essential Coverage requirements, you now pay a $0 tax penalty.
So why do I still need Minimum Essential Coverage (MEC) for QSEHRA?
Some of the rules and regulations haven't caught up with each other, so we know it's a little confusing.
QSEHRA came about in 2017 as part of the 21st Century Cures Act, which requires that participants maintain MEC in order to to participate and receive tax-free reimbursements. Even though the rules have changed a bit for individual insurance, they haven't updated yet for QSEHRA specifically.
Until then, you will still need to be sure you have insurance that qualifies as MEC in order to participate in your company's QSEHRA.
Not sure if your plan is MEC? E-mail us at firstname.lastname@example.org or chat with us in the lower right-hand corner.
Need to know how to purchase a MEC plan outside of Open Enrollment? Check out this blog about where to buy MEC for QSEHRA!