Maxon

 

Minimum Essential Coverage (MEC) Plan
Also see Minimum Essential Coverage (MEC) Plans

Affordable Care Act (ObamaCare) Penalty Solutions

Offering a plan that provides Minimum Value (MV) eliminates both the Sledgehammer Penalty and the Tackhammer Penalty as long as the coverage is Affordable for your employees.

The Maxon Companies Benefits Attorney will design a cost effective Minimum Value Plan that complies with all federal laws such as – The Affordable Care Act (Obama Care), ERISA, COBRA and HIPAA.

Maxon will:

  • Provide all documents required to adopt the plan.
  • Provide all documents required for your employees including:
  • Summary Plan Description and Summary of Benefits and Coverage.
  • Manage the plan and process all claims for benefits.
  • Complete all annual reporting.

Please contact us to request a no obligation quotation.

Or

Make a quick call to:

The Maxon Companies
hrubin@maxonco.com
914-591-7111 x313
1-800-826-2966 x313

 

Definitions

Applicable Large Employer (ALE)

In 2015 an ALE is an employer who employs 100 or more full-time and full-time equivalents on average during 2014. 

In 2016 an ALE is an employer who employs 50 or more full-time and full-time equivalents on average during 2015. 

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Full-Time Employee  

An employee who generally works 30 or more hours per week or 130 hours per month.

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Full-Time Equivalents (FTE)

Generally total hours worked by part-time employees divided by 120.

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Minimum Essential Coverage (MEC)

The law lists the types of plans that qualify as minimum essential coverage.
One of these is a self-insured group health plan that complies with the applicable health insurance reforms.   MEC in this case is the ACA’s Preventive Care Mandate.

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Minimum Value

A plan provides minimum value if it pays 60% of the “allowed costs” (determined by IRS minimum value calculator).

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Affordable

A plan is affordable if an employee contribution for the employer’s least expensive plan is no more than 9.5% of wages for self-only coverage.

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Sledgehammer Penalty

In 2015 the penalty is $2,000 per year for every full-time employee less 80.

This penalty is imposed if:

  • The ALE does not offer minimum essential coverage to 70% of its full-time employees and their dependent children to age 26
  • A full-time employee of the ALE is certified by the Exchange to have received a premium subsidy.

In 2016 the penalty is $2,000 per year for every full-time employee less 30.

This penalty is imposed if:

  • The ALE does not offer minimum essential coverage to 95% of its full-time employees and their dependent children to age 26.
  • A full-time employee of the ALE is certified by the Exchange to have received a premium subsidy.

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The Tackhammer Penalty

$3,000 per year for each full-time employee who receives a premium subsidy from an Exchange.

This penalty is imposed if:

  • The ALE offers minimum essential coverage, but the coverage does not provide Minimum Value or is not Affordable, and
  • A Full-Time Employee of the ALE goes to an Exchange and is certified by the Exchange to have received a premium subsidy.

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Individual Mandate

Requires individuals to maintain Minimum Essential Coverage.

The penalty for not maintaining Minimum Essential Coverage in 2015 is $325 or 2% of household income, whichever is greater.

The mandate is satisfied if an individual enrolls in an employer plan that provides Minimum Essential Coverage.

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Affordable Health Insurance Exchange (Exchange)

A marketplace where individuals can select from an array of insurance companies offering specified types of plans that comply with the mandates of the ACA.

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Premium Subsidies

Exchanges empowered to provide premium subsidies to specified individuals and families:

  • Whose household incomes fall between 100% and 400% of the Federal Poverty Level, and
  • Who either have not enrolled in minimum essential coverage, or have not been offered coverage that is affordable and provides minimum value.

The subsidies provided are on a sliding scale and are calculated to limit the cost to the Exchange participant from 2% to 9.5% of household income.

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