Minimum Value

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.

The Test

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.

In Practice

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
Questions We Get

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.

Sources

Where these figures and rules come from.

Regulation

26 CFR 1.36B-6

The minimum value standard and how contributions count are in 26 CFR 1.36B-6.

Statute

26 U.S.C. 4980H

The employer shared responsibility payments and the large-employer definition are in section 4980H.

Keep Reading

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.

Let’s Get to Work

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.

Start the Review248.370.8853

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