Minimum Essential Coverage (MEC) is a health insurance policy that provides at least one of the Essential Health Benefits as detailed by the Affordable Care Act (ACA). For a complete list of the Essential Health Benefits, visit www.Healthcare.gov.
The Affordable Care Act (ACA) requires all employers offer and individuals to maintain coverage that meets certain criteria to avoid penalties.
The penalty for individuals that do not have Minimum Essential Coverage is known as the “individual mandate”. Individuals who do NOT have the minimum required coverage will be assessed a penalty when filing their income taxes. The “individual mandate” penalty is 2.5 percent of household income, or $695 per adult and $347.50 per child, whichever is greater for 2018.
As of 2019, the “individual mandate” penalties have been eliminated.
Under ACA there are two penalties that impact employers with over 50 full-time (employees working a minimum of 30 hours per week) equivalent employees during the preceding calendar year. Therefore, an employer must determine if it meets the 50 employee threshold for the current calendar year by evaluating its workforce for the prior calendar year.