In the Affordable Care Act, this term is used. The term is used to refer to the coverage standards that a health plan for a large group must meet. This term helps you qualify to receive a subsidy on the exchange if you have employer-sponsored health coverage that does not meet minimum values.
Minimum Value Standard
It is one of ten requirements that every qualified health plan must meet to qualify for an exchange subsidy. This standard ensures that the plan offers coverage of at least 60% for average medical costs, and substantial coverage for physician and inpatient hospital services. These benefits are usually listed in the summary of coverage and benefits (SBC).
Minimum value definitions
According to the ACA, the term minimum value means that an employer sponsored health plan must offer adequate coverage to employees. The plan's coverage must be sufficient to meet a specific threshold called the actuarial cost, based off the average price of medical services.
Essentially, a plan must provide at least 60 percent of its actuarial value in order to qualify for a premium tax credit. This may seem like a small amount, yet it's important because it allows workers to obtain coverage at a price lower than what they would otherwise pay.
The terms "minimum", "maximum", and "minimum value" are used in math to refer to the smallest, and the largest values that can be found for a function within a certain domain. These terms are used a lot in mathematical analysis, and it can be hard to understand the significance of this type of numerical data without understanding what they mean.
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.
This confusion is common, because these terms have distinct functions and definitions in the ACA. A plan that meets the minimum essential coverage requirements of the ACA must cover the ten essential benefits.
In order to qualify for the tax credit, plans that do not cover minimum essential coverage must still provide some of the essential health care benefits. This is due to the ACA's requirement that all individuals have health insurance.
It's confusing, but important to know. If you don’t have the minimum necessary coverage, you’ll be subject to the individual responsibility tax penalty.
The Affordable Health Care Act defines "minimum-essential coverage" as a "coverage that offers a minimum degree of protection." Included are job-based policies, individual market plans, Medicare, Medicaid and CHIP.
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 might also be required by law to provide EHBs for additional services, like vision and dental.