Minimum Value—Closed Loophole for Low-cost Employer Plans
HHS Issues Final Notice of Benefit and Payment Parameters for 2016
Under the ACA, minimum value (MV) of an employer-sponsored plan is significant for a number of purposes. Beginning in 2015, certain large employers may be penalized if the health plans they offer do not provide MV. Also, an individual who is offered employer-sponsored coverage that is affordable and provides MV may not receive a subsidy for coverage through an Exchange. HHS and the Internal Revenue Service (IRS) have provided four methods for determining a plan’s MV, including an online MV Calculator.
On Nov. 4, 2014, the IRS issued Notice 2014-69 to clarify that plans that do not provide inpatient hospitalizations or physician services (referred to as Non-hospital/Non-physician Services Plans) do not provide the MV intended by the ACA.
Consistent with Notice 2014-69, the final rule provides that, in order to provide MV, a plan must not only cover a predicted 60 percent of the allowed costs under the plan, but it must also provide a benefits package that reflects benefits historically provided under “major medical” employer coverage. Specifically, to satisfy the MV requirement, coverage must include substantial coverage of both inpatient hospital services and physician services.
On Feb. 27, 2015, the Department of Health and Human Services (HHS) published its final Notice of Benefit and Payment Parameters for 2016. This final rule describes benefit and payment parameters applicable to the 2016 benefit year, including standards relating to:
• The reinsurance program’s annual contribution rate for 2016.
• The 2016 open enrollment period.
• The 2016 annual limitations on cost-sharing.