![]() The MV Calculator allows large group insured and all-size self-insured plans to determine whether they provide at least minimum value and what actuarial values they provide. HHS posted an online Minimum Value (MV) Calculator and a separate but similar online Actuarial Value (AV) Calculator. 1) Minimum Value Calculator and Actuarial Value Calculator (on the HHS website): The third and fourth methods below apply only to minimum value calculations, not to actuarial valuations generally. The calculators, safe harbors and safe harbor checklists are free of charge however, if a plan or issuer hires an actuary to provide an actuarial certification, it will have to pay for the services of the actuary.Ī plan sponsor can use either of the first two methods listed below to determine if its plan provides minimum value or what actuarial value it provides. ![]() Alternatively, a plan sponsor (typically the employer) may use one of the four methods listed below to determine whether its health plan(s) meets minimum value. ![]() Often, a Carrier or Third Party Administrator can simply confirm whether a plan meets minimum value. An example of an employer plan that would not meet the 60% requirement is a plan that purports to provide minimum value but does not provide substantial coverage for hospitalization services or physician services. Based on statements by HHS (in the preamble to the proposed regulations on Essential Health Benefits and Actuarial Value), most group health plans currently meet the 60% actuarial value requirement. ![]() Small insured plans also must meet specific actuarial values (i.e., 60%, 70%, 80% or 90%, plus or minus 2 percentage points), but large insured and all size self-insured plans are not required to meet any specific actuarial values but must provide a minimum of at least 60% actuarial value. The requirement to provide at least minimum value applies to all-size non-grandfathered plans as of the 2014 plan year. The minimum value calculation does not take into account premiums, but only benefits paid under the plan. This means that the employee pays-via deductibles, coinsurance, copayments and other out-of-pocket amounts-no more than 40% of the actuarial value of benefits under the plan. Under Code section 36B(c)(2)(C)(ii), a plan provides “minimum value” (MV) if the plan’s share of the total allowed costs of benefits provided under the plan is at least 60% of the costs. Regulations provide three “safe harbors” for Affordability: 1) W-2 income (Box 1) for the current year, 2) Rate of pay as of the first day of the plan year (130 x hourly rate of pay), or 3) 100% of the mainland Federal Poverty Line for an individual. Basically, coverage is “affordable” if each employee’s cost for the lowest-cost self-only coverage is not more than 9.5% of his/her “household income.” This coverage must provide at least minimum value. Note: A separate article explains “affordability” and the various safe harbors by which an employer can determine if its health coverage is affordable. This article explains the ways by which an employer can determine if its health plan provides at least minimum value (MV). ![]() To avoid a penalty under the “pay-or-play” provisions of the Affordable Care Act (ACA), large employers must offer most of their full-time employees (and their dependents) health benefits that provide at least “minimum value” and that are “affordable” as defined in regulations. (New guidance alert, view the updated version published 10-28-2016) Overview ![]()
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