The minimum value test: at least 60 percent of allowed costs, with substantial hospital and physician coverage.
An employer plan provides minimum value for an employee if its share of the total allowed costs of benefits is at least 60 percent and it substantially covers inpatient hospital and physician services.
This guide explains the test and who it applies to. The overview is the MEC vs MV guide. Send us your renewal and we will check your plans against it.
Two prongs.
Sixty Percent
The plan’s share of the total allowed costs of benefits provided to the employee must be at least 60 percent.
Substantial Hospital and Physician Coverage
The plan must substantially cover inpatient hospital services and physician services.
Related Individuals
Dependents who enroll because of their relationship to the employee are tested the same way, and a plan that gives the employee minimum value gives it to related individuals if the benefits and cost sharing match.
Where employers get tripped up.
| Situation | Concern | Where To Look |
|---|---|---|
| Low-cost or fixed-indemnity style plan | May not reach 60 percent or cover hospital and physician services substantially | Minimum value and network type |
| High-deductible plan with an HSA | Employer HSA contributions can count toward the percentage | What counts toward minimum value |
| Plan offered to the employee but not the family | Tier-by-tier benefits must match | Coverage tiers explained |
Three questions about the test.
Where does the 60 percent come from?
From the federal regulation under section 36B, 26 CFR 1.36B-6.
Who calculates it?
Your carrier or advisor, usually with the federal minimum value calculator or an actuarial analysis. We can check it with you.
What happens if the plan fails?
An employee may qualify for the premium tax credit, which can trigger an employer payment. See Penalty A vs Penalty B.
Where these figures and rules come from.
26 CFR 1.36B-6
The minimum value standard and how contributions count are in 26 CFR 1.36B-6.
26 U.S.C. 4980H
The employer shared responsibility payments and the large-employer definition are in section 4980H.
Related guides.
Minimum Essential Coverage vs Minimum Value
The main guide to the two standards.
Minimum Value and Network Type
How network design interacts with the test.
HSA, HRA and Wellness Credits
What counts toward minimum value.
Penalty A vs Penalty B
How the two employer penalties differ.
Section 4980H Explained
The statute in plain terms.
Coverage Tiers Explained
EE, ES, EC and EF in plain terms.
Send us your renewal.
Four documents — the renewal letter, the plan summary, the contribution split by tier and enrolled counts by tier. We’ll come back with a competitive read, where we see opportunity, and the five questions we’d put to your carrier.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
Switch to CFH. Unhappy with your broker? Your employees won’t notice. You will. →
Cookies on This Site
We use cookies to keep the site working properly and to understand how it is used. You can decline anything that is not essential. See our Privacy Policy for the detail.
- Essential — needed for the site to load and for you to move around it. These cannot be switched off.
- Analytics — tell us which pages get read, so we know what is worth writing more of.
- Advertising — set by third parties such as ad and social platforms to measure and target campaigns.