The Affordable Care Act uses the term Minimum Value. It refers the minimum coverage standard that group health plans must provide. This term is important because it helps you qualify for a subsidy in the exchange if your employer-sponsored health insurance doesn't meet minimum value.
Minimum Value Standard
Every qualified health plan is required to meet the minimum value standard in order to qualify for an Exchange subsidy. The minimum value standard is a requirement that ensures a health plan covers 60% of the average medical cost and provides substantial coverage for hospital inpatient services and physician services. These benefits are usually listed in the summary of coverage and benefits (SBC).
Definitions for minimum value
The minimum value term, which is ACA specific, refers to an employer-sponsored healthcare plan that must provide adequate coverage. The plan also has to cover enough employees so that they meet a certain threshold, known as the actuarial level, which is based upon the average cost for medical services.
For a premium credit, a policy must offer at least 60 percent its actuarial amount. It is a small amount but is significant because it allows employees to be covered for a cheaper price.
In mathematics, the terms "minimum and maximum" are used to define the smallest or largest value of a specific function. The terms "minimum" and "maximum" are often used in mathematics analysis. It can be difficult to understand their significance without knowing what they mean.
Understanding that minimum values are different from related concepts is also important. In some cases the terms "minimum worth" and "minimum vital coverage" are confused.
This confusion is especially common because both of these terms have different functions and definitions under the ACA. The minimum essential coverage regulations of the ACA require that a plan providing minimum essential protection must include the ten health benefits outlined by the ACA.
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.
This is a confusing concept, but one that's crucial to grasp. If you don't meet the minimum coverage requirements for health insurance, you may be subject to a tax, also known as an individual responsibility penalty.
The Affordable Care act defines "minimum necessary coverage" as "coverage providing a minimum protection." This includes job-based health insurance, individual market policies, Medicare, Medicaid, CHIP, TRICARE and certain other coverage.
The ACA mandates that any employer-sponsored health plan must provide at least a percentage of the benefits it offers as essential health benefits. Included are things such as preventive services (such as vaccinations), prescription drugs and maternity benefits. Some employers will also have to offer other EHBs like dental or vision.