Minimum Value Determination

All Plan Sponsors must determine if their Plan(s) meet Minimum Value.  Minimum Value determinations will affect employers and their employees in terms of coverage decisions and the potential for employer penalties to be incurred if an employee participates in the exchange and qualifies for a subsidy. Whether the Plan(s) met Minimum Value or not is information that must be included in the Summary of Benefits and Coverage (SBC) as well as the Exchange Marketplace Notice (which must be distributed to all employees by October 1, 2013).

A Plan may be certified as having met Minimum Value if it passes one of the following tests:

1. Provides the same benefits as one of the three safe harbor plan design checklists, or

2. Uses the Minimum Value Calculator provided by HHS and the resulting value is 60% or more, or

3. If neither (1) nor (2) provide a definite answer, the Plan can engage a Health Actuary to provide actuarial analysis and certify that the Plan meets Minimum Value.

According to the IRS, a Group Health Plan (GHP) meets Minimum Value if it covers 60% or more of the “standard” health care costs.  If a GHP does not provide Minimum Value, a penalty may be assessed beginning in 2015 if an employee receives subsidized coverage through an Exchange.