Minimum value is a term that is used in the Affordable Care Act. It's a term used to describe the level of coverage a group plan must provide. This term is important because it helps you qualify for a subsidy in the exchange if your employer-sponsored health insurance doesn't meet minimum value.
Minimum Value Standard
The minimum value standard is one of the 10 requirements that must be met by every qualified health plan to be eligible for an exchange subsidy. It ensures that a plan covers at least 60% of average medical costs and offers substantial coverage for inpatient hospital services and physician services. This coverage will usually be included in a plan’s summary benefits and coverage (SBC).
Definitions of minimum value
The minimum value term, which is ACA specific, refers to an employer-sponsored healthcare plan that must provide adequate coverage. It also means that the plan must provide enough coverage to meet a certain threshold level, called the actuarial value, which is based on the average cost of medical services.
Essentially, a plan must provide at least 60 percent of its actuarial value in order to qualify for a premium tax credit. 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 used a lot in mathematical analysis, and it can be hard to understand the significance of this type of numerical data without understanding what they mean.
The minimum value differs in many ways from other concepts or teminology. The terms "minimum coverage" and "minimum values" can be confused in some cases.
The confusion is exacerbated by the fact that both terms are used in different ways and have different definitions within the ACA. The minimum essential coverage regulations of the ACA require that a plan providing minimum essential protection must include the ten health benefits outlined by the ACA.
To be eligible for the premium tax credit, however, a plan may have to provide at least some of these ten essential benefits. The ACA mandates that everyone has health insurance.
It's a confusing idea, but it's important to understand. If you don't have a health insurance policy that meets the minimum essential coverage requirements, you will be liable for a tax penalty, which is known as the individual responsibility penalty.
The Affordable Health Care Act defines "minimum-essential coverage" as a "coverage that offers a minimum degree of protection." It includes coverage such as job-based insurance, individual market policies and Medicare, Medicaid, CHIP or TRICARE.
The ACA also requires that any health plan offered by an employer must offer at least a certain percentage of its benefits as essential health benefits (EHBs). Included are things such as preventive services (such as vaccinations), prescription drugs and maternity benefits. Some employers might also be required by law to provide EHBs for additional services, like vision and dental.