In order to qualify for your QSEHRA, your employees must have health insurance that qualifies as Minimum Essential Coverage. In the IRS' comprehensive guidance for QSEHRA, page two addresses the need for MEC. Appendix A (page 57) outlines types of acceptable MEC. A MEC plan is an insurance plan that meets the Affordable Care Act requirement for having health coverage.
You may also see MEC plans referred to as "Affordable Care Act (ACA) plans" or "Obamacare health plans."
In summary, most group plans and full coverage individual health plans purchased through the marketplace qualify. The most common exceptions we see are short-term plans and coverage for only vision and dental plans. Also, see our article about sharing plans (like Medi-Share), another type of plan we see often.
What do Minimum Essential Coverage plans cover?
If a plan provide Minimum Essential Coverage, it means that it covers the following 10 Essential Health Benefits:
Outpatient care—the kind you get without being admitted to a hospital
Trips to the emergency room
Treatment in the hospital for inpatient care
Care before and after your baby is born
Mental health and substance use disorder services: This includes behavioral health treatment, counseling, and psychotherapy
Your prescription drugs
Services and devices to help you recover if you are injured, or have a disability or chronic condition. This includes physical and occupational therapy, speech-language pathology, psychiatric rehabilitation, and more.
Your lab tests
Preventive services including counseling, screenings, and vaccines to keep you healthy and care for managing a chronic disease.
Pediatric services: This includes dental care and vision care for kids
Examples of qualifying health coverage
The following are examples of Minimum Essential Coverage 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 (but 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.
Health plans that don't count as coverage
Some products that help pay for medical services don't qualify. If you have only this kind of product, you may have to pay the fee. Examples include:
Coverage only for vision care or dental care
Coverage only for a specific disease or condition
Plans that offer only discounts on medical services
Take Command Health can help!
As part of our services, Take Command Health will verify your employees' insurance coverage on a regular basis (annually or quarterly - whatever you choose). We'll ask for proof of the coverage and let them know whether it qualifies. If they have noncompliant coverage, we can help them find new coverage or supplement their current plan to qualify for your QSEHRA.
Still not sure where to start? Check out our Admin Resource Center for more resources and support.