Minimum value is a plan design test, not a network test.
ACA minimum value looks at what share of costs the plan covers. It does not depend on whether the network is an HMO, PPO or EPO.
Why network type does not decide minimum value
An employer plan provides minimum value if it covers at least 60 percent of the total allowed costs of benefits expected to be incurred under the plan, and provides substantial coverage of inpatient hospital and physician services. Large employers subject to the ACA employer mandate must offer coverage that meets minimum value, and affordable, to avoid a penalty.
Minimum value is a measure of benefit design: deductible, coinsurance, copays and out-of-pocket maximum. The type of network, whether HMO, PPO, EPO or POS, does not by itself make a plan meet or fail the test. A PPO with a very high deductible can fall short, while a narrow-network plan with generous cost sharing can pass.
Network type matters in a different way. A narrow network can lower premium, which helps affordability, but it can lead to employee dissatisfaction if their doctors are not included. The two questions should be answered separately: does the plan meet minimum value, and does the network work for this workforce?
We run the carrier’s minimum value calculation or the federal calculator for each plan option we recommend, and we put the result in writing for the employer’s compliance file.
What to decide and where it connects
Why Renewals Are Rising
What is driving renewal increases.
See the HSA Guide
How high-deductible plans fit.
Read the Parent Guide
HMO vs PPO vs EPO for Michigan employers.
Questions about this topic
What is minimum value?
A plan provides minimum value if it covers at least 60 percent of total allowed costs of benefits.
Does network type affect it?
No. The test looks at plan design and cost sharing.
Where do we confirm it?
The carrier or your broker can confirm minimum value for a plan design.
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