The Affordable Care Act refers to minimum value. It's a term used to describe the level of coverage a group plan must provide. This is important as it allows you to qualify for a subsidy if the value of your employer-sponsored insurance falls below the minimum.
Minimum Value Standard
Minimum value standards are one of 10 requirements for exchange subsidies. It ensures the plan will cover at least 60 percent of medical costs on average and provide substantial coverage to inpatient hospitalization and physician care. This coverage is usually included in a plan's summary of benefits and coverage (SBC).
Definitions of Minimum Value
Minimum value is a term that's specific to the ACA. It means an employer-sponsored plan has to provide employees with adequate coverage. It also means that the plan must provide enough coverage to meet a certain threshold level, called the actuarial value, which is based on the average cost of medical services.
For a premium credit, a policy must offer at least 60 percent its actuarial amount. This is a relatively low amount, but it is a significant one because it allows employees to get covered at a lower price than they might otherwise have had to pay.
In math, the term "minimum" and "maximum" are used to describe the smallest and largest values of a function that can be determined in a particular domain. These terms are commonly used in math analysis and without understanding them, it's hard to know the meaning of these types of numerical data.
Another important thing to understand about minimum value is that it is different from other related concepts and teminology. In some cases, the terms "minimum value" and "minimum essential coverage" are often confused with each other.
The confusion is exacerbated by the fact that both terms are used in different ways and have different definitions within the ACA. As an example, a minimum coverage plan is required to provide the ten basic health benefits that are outlined under the ACA's minimum coverage regulations.
For a plan to be eligible for a credit on premiums, it may need to include at least a portion of the ten health benefits that are considered essential. The ACA mandates that everyone has health insurance.
It is important to understand this confusing concept. If you don’t have the minimum necessary coverage, you’ll be subject to the individual responsibility tax penalty.
The Affordable Healthcare Act defines'minimum essential protection' as "coverage ensuring a minimal standard of protection." It includes coverage such as job-based insurance, individual market policies and Medicare, Medicaid, CHIP or TRICARE.
ACA also requires any health plan offered to employees by their employers to offer a certain percentage as essential health services (EHS). Included are things such as preventive services (such as vaccinations), prescription drugs and maternity benefits. Some employers may also be required to offer additional EHBs, such as dental or vision.