Employer Mandate

Under Internal Revenue Code section 4980H, an Applicable Large Employer may be subject to a penalty if it does not offer its full-time employees, and their dependents, minimum essential coverage that is affordable and provides minimum value.

What is Minimum Value?

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A group health plan provides minimum value if the plan’s share of the total allowed costs of benefits is at least 60% and the plan provides substantial coverage of inpatient hospital and physician services.  For example, a plan with a minimum value of 90% covers all but 10% of the benefit costs.  The remaining 10% is the employee cost-sharing portion.

For information about the methods available for calculating minimum value, see our June 2014 Briefing, which you can find below.


Additional Information
Health Care Reform: IRC §4980H Calculating Minimum Value
This Briefing describes the methods available for determining whether a group health plan provides minimum value.