How do MECs apply to minimum value for health insurance coverage?

Let’s dive in.

MEC stands for minimum essential coverage and MV stands for minimum value.

MEC stands at the lower threshold of minimum value because it only gives you access to basic health insurance coverage for acute services like primary care visits, specialist visits, urgent care, labs, x-rays, and prescription drugs.

The definition of minimum value (MV) states that the plan must cover at least 60% of the actuarial value of expenses that are allowed within any plan designed and offered to employees.

The employer mandate (under the Affordable Care Act) states that the plan cost to the employee cannot exceed 9.12% of the employee’s income in 2023.

Here are two common questions I often receive about MEC plans:

Why does a broker need to offer these?

What’s the difference between penalty A and B under the Affordable Care Act?

A MEC plan is going to cover penalty A. Penalty A states that an employer must offer at least minimum essential coverage to 95% of their full-time equivalents (FTE). If you offer a MEC plan you will avoid penalty A.

The minimum value is what covers penalty B. If an employer is not offering a fully-insured plan that covers at least 60% of the actuarial value, an employee is eligible for a premium subsidy if they apply for coverage individually.

An employer’s failure to offer a plan of minimum value will trigger penalty B.

It’s important to understand the details so you can help your clients avoid unnecessary penalties.

If you want more details or have any questions please reach out to me on LinkedIn.

As a broker, it can be difficult to determine if a Minimum Essential Coverage (MEC) plan is the right fit for your clients.

Do they provide enough coverage?

Do they even save money?

With so many different insurance products and coverage options available, getting an accurate understanding of the potential cost savings is a challenging task.

So, let’s discuss some important information about MEC plans that will help you make the most informed decisions when finding a plan that works best for your clients.

Here’s one of the most important questions you need to ask:

What will cost your client more?

1. Paying for a MEC plan?

2. Paying the ACA penalty?

To figure out what makes more financial sense for your clients, you can go here:(https://www.evolvedbenefits.com/new-page “‌”) and use the calculator on our resource page to see if your clients could be exposed to larger-than-expected ACA penalties.

This is a necessary calculation because if you have a client that remains non-compliant, they could receive a hefty penalty letter in the mail.

When it comes to MEC plans, having a good understanding of how they work and how much your clients can save is critical.

By taking the time to review all available options and doing some research on potential cost savings, you can ensure your clients are getting the best possible coverage at the most reasonable price.

If you want to consult with our expert team to understand how MEC plans can save you from penalties in the long run, reach out to walk through a demo.

Benefits packages come in all different shapes and sizes, and an employer’s budget can have a big impact on the type of benefit package offered.

Minimum Essential Coverage (MEC) plans can provide an employer the opportunity to offer a quality benefit without breaking the bank. However, MECs have often been given a bad rap.

The popularity of MEC plans has risen in recent years, but employers might be hesitant to consider them due to their “negative” reputation.

In recent years MEC plans have developed a bit of a “snake oil” connotation because of how they were rolled out eight years ago.

In 2014, the cost of health insurance increased significantly because carriers had to comply with the rules of the Affordable Care Act. As costs increased, MEC plans became a convenient option.

Unfortunately, at that time, some unethical brokers were selling MEC plans as a full replacement to major medical plans. In addition, they were offering MEC plans to ineligible companies who had full-time employees eligible for affordable major medical coverage.

With this behavior it’s easy to see why MEC plans have a bad reputation.

Here’s the reality:

MEC plans have evolved since 2014, and they offer an employer a great opportunity to provide a solid level of protection to employees who are not eligible for a major medical plan.

At Evolved Benefits, we’ve worked hard to improve the reputation of the MEC plan by evolving the program we offer.

Now, you may think MEC plans are not “real insurance”, but it’s a great fit for an employee population that greatly lacking access to quality coverage.

If you think MEC plans don’t provide much coverage let me put that myth to rest, as well.

Though MEC plans don’t provide coverage for “big ticket” services like hospitalization, they still offer robust coverage for necessary care like acute services, primary care, specialists, Urgent Care, labs, x-rays, and generic drugs. And that do it at a very affordable rate.

If you are interested in continuing the conversation about MEC plans, reach out, and we will walk you through it.

When you lead with price it’s easy to get commoditized by your prospects.

Price is important, but it’s not the only thing that matters. By focusing on your customers and what they actually need, you can set yourself up for success.

The next time you present a solution to a client, follow these five tips before you mention the price.

Think of this as a little “Presentation 101”.

1. The Features versus Benefits.

Said a different way, cost versus benefit.

Let’s use Evolved Benefits as an example…

We offer a MEC plan and it’s very affordable. It’s probably the most affordable MEC plan in the marketplace, especially with the benefits it provides. In addition, our MEC plan has excellent back-end support.

It gives your client a dedicated account manager and an employer portal. Your client can go to the portal and do some of the day-to-day tasks on their own, or they can talk to the account manager who can assist.

Furthermore, the employees will receive access to dedicated customer service reps who are bilingual. Customer service is available all hours of the day, handling calls from the East to West Coasts.

We make life easier for you and your clients.

This is a great example of stressing benefits over price. The cost of our MEC plan usually comes up at the end of the conversation because there’s so much more to discuss. By the time we get to the price, the client is already bought in.

Before you get into the old habit of leading with the price, start thinking differently. What do your clients want? What do they need? Believe it or not, they’re not always looking for the lowest price.

The reality is you need to ask the right questions so your clients can start shifting their perspective.

1. Think innovation. New solutions are always coming out so you must stay current.

2. Remember that relationships are a big deal and relevant partnerships are a big deal.

3. Trust is a big deal.

4. Quality is a big deal.

The next time you’re sitting down with a client, remember to focus on these five things before you start doing what your competition is doing, which is leading with price.

If you’re ready to dig deeper and get away from chasing the lower price, set up a call to learn how to focus your presentation on the features of your plan.

https://calendly.com/tommy-gaffney/demo-call?month=2022-09

In your circle of partners, you may have a payroll person, a corporate banker who helps out with loans, or someone who provides employee retention credits. There are so many different referral partners you can bring into the mix.

The key is being open to bringing an expert into the conversation.

There’s nothing wrong with not knowing everything about a particular subject. You are an expert in your field just like others are in theirs.

Introducing a subject matter expert won’t make you look like you don’t know what you’re doing. In fact, it does the opposite. It makes you look good. Plus, you’re bringing a ton of value to your clients. The perception from the client side is usually, “Wow, my advisor is resourceful!”

Watch our video to learn how to build your circle of referrals and grow your book of business with trusted partners.