MEC Plans Rise in Popularity, Why Now?

Minimum Essential Coverage (MEC) is a popular option with employers currently – and it’s not just because it covers COVID-19 testing as mandated by the CARES Act.

Before explaining today’s popularity in muscled-up MEC, let’s review history.

MEC was originally marketed to meet the requirement of the Affordable Care Act (ACA) that companies with 50 or more full-time employees provide health insurance covering 63 preventative care services. These preventive services included routine physical exams, well-child exams, routine mammograms and about 60 other wellness-focused services.

Employers purchased MEC to minimize ACA penalties. Often referred to as the Strong and Weak penalties, MEC fulfilled the requirement that avoided the Strong Penalty.

With passage of the Tax and Jobs Act in 2018, many employers thought the ACA employer penalties disappeared, but many have been surprised to learn otherwise.  The truth is that while the individual tax-payer’s penalty has been reduced to $0 for not having acceptable health coverage, the penalty for employers not offering the necessary coverage remains. This can be is a huge and costly misunderstanding by the employer.

Employers face an ACA penalty payment of $2,700 per fulltime-equivalent employee (FTE) – minus the first 30 FTEs – if they fail to provide the preventive coverage included in MEC. This after-tax penalty would cost a company of 100 employees $189,000. Compared to a tax-deductible investment in MEC, it’s easy to see why Minimum Essential Coverage is so popular.

But there’s more.

MEC Revamped for Today’s Benefits

While thankful to avoid an ACA penalty, employers recognize that MEC plans fell short as far as healthcare benefits for sickness and accidents.  An appealing option has been to add a Limited Medical Indemnity, which pays specified amounts for some of the most frequently used medical services: doctor office visits, specialty visits, urgent care and even inpatient services including surgery, hospitalization and intensive care.

But MEC is closing the coverage gap, at least within the realm of outpatient services. We referred to it as “muscled up” MEC earlier. MEC plans still start with preventive services but OptiMed has built five levels of MEC plans elevating coverage to include sought-after outpatient services the likes of  x-rays, laboratory testing, and emergency room visits.

OptiMed’s MEC plans range in cost from $45 to $145 per employee per month. Discover more by downloading our product sheet.

Why MEC Now?

MEC can be positioned in a variety of creative ways for optimum benefit and participation.  It can be included as a buy-up option for employees as part of their benefit offering.  In addition, MEC can be enhanced with an inexpensive prescription drug program, or a Limited Medical plan.  Offering multiple MEC options and enhancements tailors the coverage to each employee’s unique situation and budget.

To recap:

• MEC is an inexpensive plan covering preventative services as defined by the ACA.
• It eliminates the ACA Strong Penalty.
• It covers COVID-19 testing
• Enhanced options provide benefits such as office visits, specialty visits, labs, x-rays and ER visits.
• Is a solid base to add Prescription Drug and Limited Medical benefit enhancements.

In these uncertain times employers are finding it more confusing than ever to meet their employees’ healthcare needs while satisfying government healthcare regulations.  By providing Covid-19 testing, allowing for office visits and prescription coverage, and helping the company avoid a hefty penalty, OptiMed MEC plans provide quality and affordable benefits that every healthy employee needs to stay well, safe, and protected.

If you’re already using our OptiRater you can begin quoting MEC plans immediately, or contact your sales rep today for a MEC quote the old-fashioned way or to get oriented on OptiRater.