What is a Minimum Value Plan?
Coverage that has an actuarial value (AV) of at least 60%. AV is the plan’s share of the total allowed cost of benefits provided to an enrolled individual
- Example, if a plan has an AV of 60% then the individual is theoretically responsible for 40% of the costs for all covered benefits (in addition to the monthly premium) and the plan will pay 60%
The Minimum Value of a group health plan is calculated by dividing anticipated covered spending by total anticipated allowed charges for Essential Health Benefits coverage
- How much an individual spends could be a higher or lower percentile, depending on actual health care needs
ACA Plan Requirements
Requirements apply to both Small and Large Employers
1. Maximum of 90 Day Waiting Period – beginning in 2014 – Employment-Based Orientation Periods were recently introduced, however they cannot Exceed One Month for Purposes of 90-Day Waiting Period Limit.
2. Plan Design Requirements – effective dates vary
- Benefits mandates (e.g. women’s preventive care, clinical trials)
- Eliminate pre-existing condition exclusions
- Eliminate annual limits on essential health benefits
- Cost sharing cannot exceed HDHP levels, $6,350 for self-only and $12,700 for family coverage in 2014. ($6,600 / $13,200 in 2015.)
3. Deductible and out-of-pocket limits in the small group markets
- Recent legislation signed eliminates the Affordable Care Act’s annual limitation on deductibles. Those limits were set at $2,000 for employee only coverage and $4,000 when adding a dependent(s); however, certain small group plans were allowed to exceed the limits if necessary to reach a given level of coverage, or metal tier.
- The annual limitation on out-of-pocket expenses for non-grandfathered group plans was not eliminated. Annual out-of-pocket expenses (including coinsurance and copayments, but not premiums) for a plan year beginning in 2014 may not exceed $6,350 for self-only coverage or $12,700 for other than self-only coverage. For 2015, these limits increase to $6,600 and $13,200, respectively.
- Out-of-pocket costs must include all co-pays/deductibles/co-insurance and RX co-pays