The Internal Revenue Service issued a trio of notices Thursday related to the health care reform law, including how one might determine whether a health insurance plan provides “minimum value.”
Beginning in 2014, eligible individuals who purchase coverage under a qualified health plan through an Affordable Insurance Exchange may receive a premium tax credit under Section 36B only if they are not eligible for other minimum essential coverage, including coverage under an employer-sponsored plan that is affordable and provides minimum value.
A plan fails to provide minimum value if the plan covers less than 60 percent of the total allowed costs of benefits provided under the plan. If an employee receives a premium tax credit an applicable large employer may be liable for an assessable payment under Section 4980H, the IRS noted.
Minimum essential coverage includes individual health insurance coverage, eligible employer-sponsored plans, and government-sponsored coverage such as Medicare, Medicaid, TRICARE, and veterans’ health care. Entities that provide minimum essential coverage after Jan. 1, 2014, must file annual returns reporting information for each individual covered.