In the Affordable Care Act this term is called Minimum Value. This term refers to a standard of coverage that must be offered by a group health insurance plan. This term is crucial because it can help you qualify for subsidies in the exchange, if your employer's health insurance does not meet minimum value.
Minimum Value Standard
The minimum value requirement is one out of 10 requirements which must be met for a qualified health insurance plan to be eligible for a subsidy. It ensures the plan will cover at least 60 percent of medical costs on average and provide substantial coverage to inpatient hospitalization and physician care. This coverage is usually included in a plan's summary of benefits and coverage (SBC).
Definitions of minimum value
Minimum value is a term that's specific to the ACA. It means an employer-sponsored plan has to provide employees with adequate coverage. The plan also has to cover enough employees so that they meet a certain threshold, known as the actuarial level, which is based upon the average cost for medical services.
In essence, the plan must cover at least 60 per cent of its actuarial values in order to qualify. It is a small amount but is significant because it allows employees to be covered for a cheaper price.
The terms "minimum", "maximum", and "minimum value" are used in math to refer to the smallest, and the largest values that can be found for a function within a certain domain. These terms are frequently used in mathematical analysis. Without understanding their meaning, it is difficult to grasp the importance of these numerical data.
A second important point to note is that the minimum value concept is distinct from all other related concepts. In some cases, the terms "minimum value" and "minimum essential coverage" are often confused with each other.
The confusion is exacerbated by the fact that both terms are used in different ways and have different definitions within the ACA. A plan that meets the minimum essential coverage requirements of the ACA must cover the ten essential benefits.
A plan that does not provide the minimum essential coverage will still need to cover some or all of the 10 essential health benefits to qualify for a tax credit. It is because of the ACA, which requires everyone to have health insurance.
It's confusing, but important to know. If you don't meet the minimum coverage requirements for health insurance, you may be subject to a tax, also known as an individual responsibility penalty.
According to the Affordable Care Act, "minimum coverage" is "coverage which provides a minimal level of protection." This includes health insurance through the job, policies on the individual market, Medicare and Medicaid, CHIPs, TRICARE, and other coverage.
The ACA also mandates that every health plan provided by an employer offer a minimum percentage of benefits as essential healthcare benefits (EHBs). Included are things such as preventive services (such as vaccinations), prescription drugs and maternity benefits. Some employers will also have to offer other EHBs like dental or vision.