Minimum Essential Coverage

The Individual Mandate: Who is Liable for a Penalty?


MEC includes coverage under:

     • A government-sponsored program, such as coverage under the Medicare
     or Medicaid programs, CHIP, TRICARE and certain types of Veterans
     health coverage

     • An eligible employer-sponsored plan (including COBRA and retiree coverage),
     defined as any plan offered by an employer to an employee which is a
     governmental plan or a plan or coverage offered in the small or large
     group market within a state (a self-funded plan can also qualify as an
     eligible employer-sponsored plan)

     • A health plan purchased in the individual market

     • A grandfathered health plan

MEC also includes any additional types of coverage that are designated by HHS or when the sponsor of the coverage follows a process to be recognized as MEC. HHS has designated the following other types of coverage as MEC:

     • Self-funded student health coverage and state high risk pools for plan
     or policy years that begin on or before Dec. 31, 2014 (for plan or policy years
     that begin after Dec. 31, 2014, sponsors of self-funded student health plans
     and state high risk pools may apply to be recognized as MEC)

     • Refugee Medical Assistance supported by the Administration for Children
     and Families

     • Medicare Advantage plans

MEC excludes any coverage, whether insurance or otherwise, that consists solely of excepted benefits (as defined by HIPAA). MEC does not include specialized coverage, such as coverage only for vision or dental care, workers’ compensation, disability policies or coverage only for a specific disease or condition.

The penalty will be assessed against an individual for any month during which he or she does not maintain “minimum essential coverage” (MEC) beginning in 2014 (unless an exemption applies). The requirement to maintain MEC applies to all individuals of all ages (including children), unless that individual falls within a specific exception or is exempt. An individual is treated as having coverage for a month if he or she has coverage for any one day of that month.