Minimum Essential Coverage is the type of coverage which is mandatory for every American if he/she needs to avoid the fee for not having insurance under Obama Care.

In order to comply with the Affordable Care Act an individual must maintain Minimum Essential Coverage throughout the year. Failing to do so there is a penalty, which needs to be paid in the form of a fee, needed to pay every month for not having Health Care Insurance. There is an exception where one can go without coverage for up to 3 months in a row each year.

An individual may be considered having minimum essential coverage if you have purchased health insurance through market place or are covered under public program or have coverage through your employer.

Minimum Essential coverage includes the following types of health Insurance:

  • Employer sponsored Coverage.
  • Private Insurance purchased through a qualified company with a health plan offered by the Health Insurance Marketplace.
  • Medicare Part A coverage and Medicare Advantage plans.
  • Most Medicaid Coverage.
  • CHIP Coverage.
  • Certain types of Veterans health coverage.
  • Coverage provided to Peace Corps Volunteers.
  • Coverage under the non-appropriated fund health benefit program.
  • Refugee Medical Assistance supported by the administration for children and families.
  • Health coverage offered to students by their respective universities that begin on or before December 31,2014. State high-risk pools for plan/policy.

What is not counted under Minimum Essential Coverage?

The following plans are not considered covered under minimum essential coverage:

  • Vision
  • Dental Care
  • Medicaid covering partial benefits such as family planning
  • Worker’s compensation
  • Disability policies.
  • Short term health plans
  • Fixed Benefit health plans
  • Supplemental Medicare like Part D and Medigap
  • Partial coverage with limited benefits.

Rules for Minimum Essential Coverage:

Technically Minimum Essential Coverage is defined by the source of Insurance such as Medicare, Medicaid, Market plan insurance, TRICARE etc.

The following points need to be taken into consideration for Minimum Essential Coverage:

  • Affordability: Health Care plans must cover at least 60% of out of pocket costs on health services.
  • Guarantee Coverage: No Insurance company can deny coverage to individual on any medical grounds other than the non ability to pay insurance premiums.
  • Guaranteed Renewability of Coverage: Any person covered under health insurance plan must be able to renew his/her insurance policy regardless of his current health status.
  • Health Insurance Plans should provide coverage of at least 10 essential health benefits.
  • In case of Employers coverage health insurance plan must cover 60% of total allowed cost plan v/s what client pays due to deductibles, copays and coinsurance.