• Coverage for the medically needy (individuals with high medical expenses who would be eligible for Medicaid but for their income level)
• Coverage under Section 1115 demonstration projects (experimental, pilot or demonstration projects that promote the objectives of the Medicaid program)
However, HHS and the Treasury may recognize certain medically-needy or Section 1115 demonstration project coverage to qualify as MEC, if the coverage is comprehensive.
TRICARE “space available care” and “line-of-duty-care” also would not qualify as MEC. Space available care is provided for certain individuals who are excluded from TRICARE coverage for health care services from private sector providers and only eligible for care if space is available in a facility for the uniformed services. Line-of-duty care is provided for certain individuals who are not on active duty and are entitled to episodic care for an injury, illness or disease incurred or aggravated in the line of duty.
However, because individuals enrolled in these types of coverage may not know at open enrollment for the 2014 plan year that they are not MEC, IRS Notice 2014-10 provides transition relief from the individual mandate in 2014 for these individuals. Notice 2014-10 provides that a taxpayer is not liable for the individual mandate penalty for months in 2014 when he or she is enrolled in:
• Family planning services Medicaid
• Tuberculosis-related services Medicaid
• Pregnancy-related Medicaid
• Emergency medical conditions Medicaid
• Certain Section 1115 demonstration projects
• Coverage for medically needy individuals
• Space available care
• Line-of-duty care
When determining whether a period without coverage qualifies as a short coverage gap, an individual will be treated as having MEC for any month in 2014 when that individual is eligible for the transition relief in Notice 2014-10.