What the heck is MEC?

Nancy K. Campbell • March 11, 2014

Health care reform is confusing.  There are so many new terms and concepts.  One concept that has been getting a lot of attention lately is MEC.  MEC stands for “minimum essential coverage” and is a fancy name for basic health coverage. MEC is important for two main reasons —

  • First, starting in 2014, individuals who don’t have MEC, and don’t qualify for an exemption, will have to pay a penalty tax.
  • Second, starting in 2015, large employers who don’t offer MEC to substantially all of their full-time employees and their dependents (i.e., natural and adopted children) will have to pay a nasty penalty under Code Section 4890H(a) (the “subsection (a) penalty”).

Employers who offer MEC to their employees help their employees avoid the individual penalty tax and, at the same time, help themselves avoid the subsection (a) penalty.

So what exactly is MEC?   MEC is broadly defined to include any group health plan or group health insurance that is not a HIPAA-excepted benefit.  Most group health coverage meets the very broad definition of MEC unless the coverage provides only limited benefits, such as dental or vision-only coverage.  MEC also includes government coverage (such as Medicare and Medicaid), individual health insurance, and various other types of coverage.

For more information on MEC, see the final regulations published on August 30, 2013 and the proposed regulations published on January 27, 2014.  For more information about the employer shared responsibility penalties, please see my Checklist for Employers , the final regulations , and the IRS Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act.

Employee burnout: what it is and how to prevent it

By Mardy Gould • May 24, 2024
Employee burnout has become an epidemic in today’s modern workplace. So much so that the World Health Organization (WHO) officially recognizes it as an “occupational phenomenon.”1 While many used to consider mounting workplace stress an individual employee problem, these days, it’s become an employer’s responsibility to prevent burnout before it hurts productivity and business performance—not to mention your employees’ physical and mental health. Luckily, you can prevent burnout from affecting your workforce in several ways. This article will explore the causes and signs of employee burnout and the steps you can take to create a positive work environment where employees feel safe from toxic stress levels.

Form 720 and PCORI fee FAQs

By Mardy Gould • May 23, 2024
If you're a small business owner, you may have heard of the acronym PCORI and the fees that come with it. But what is PCORI, and how does it apply to your organization? Under the Affordable Care Act (ACA), sponsors of self-insured health plans must pay a fee to fund the federal Patient-Centered Outcomes Research Institute (PCORI). PCORI is an independent organization the ACA created to conduct research to help healthcare consumers make better decisions for their specific needs and outcomes. It also performs research related to clinical effectiveness. Employers offering a self-insured medical reimbursement health plan, such as a health reimbursement arrangement (HRA), must pay this fee by July 31 each year via Form 7201. This fee was initially set to expire in 2019, but Congress extended it through September 30, 20292, due to the Further Consolidated Appropriations Act of 20203.
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