In the Affordable Care Act, this term is used. It is a term that refers to the standard of coverage that a group health plan must offer. This term helps you qualify to receive a subsidy on the exchange if you have employer-sponsored health coverage that does not meet minimum values.
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. This standard ensures that the plan offers coverage of at least 60% for average medical costs, and substantial coverage for physician and inpatient hospital services. This coverage will usually be included in a plan’s summary benefits and coverage (SBC).
Definitions of minimum values
The minimum value term, which is ACA specific, refers to an employer-sponsored healthcare plan that must provide adequate coverage. The plan's coverage must be sufficient to meet a specific threshold called the actuarial cost, based off the average price 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. This is a relatively low amount, but it is a significant one because it allows employees to get covered at a lower price than they might otherwise have had to pay.
In math, "minimum" or "maximum", are terms used to indicate the smallest and biggest values that a function can have in a given domain. These terms appear a lot when it comes to mathematical analysis. Understanding what they are can help you understand their importance.
A second important point to note is that the minimum value concept is distinct from all other related concepts. The terms "minimum coverage" and "minimum values" can be confused in some cases.
This confusion occurs a lot because the ACA has different definitions and functions for both of these terms. 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. This is due to the ACA's requirement that all individuals have 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.
According to the Affordable Care Act, "minimum coverage" is "coverage which provides a minimal level of protection." This includes job-based health insurance, individual market policies, Medicare, Medicaid, CHIP, TRICARE and certain other coverage.
The ACA mandates that any employer-sponsored health plan must provide at least a percentage of the benefits it offers as essential health benefits. It includes services like prescription drugs, maternity care and preventive health. Some employers might also be required by law to provide EHBs for additional services, like vision and dental.