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What is Minimum Essential Coverage?

What is minimum essential coverage?

Minimum essential coverage is defined as most group health plans offered by a large or small employer, or health coverage provided by the government. A plan consisting exclusively of “excepted benefits” does not meet the minimum essential coverage threshold. Exceptions to this include certain limited-scope benefits, such as stand-alone dental or vision plans that are unbundled from medical plans.

Note: The vast majority of medical plans in Zenefits meet the Minimum Essential Coverage threshold. For more information on plans that do and do not count as Minimum Essential Coverage, see this Healthcare. gov page: Types of Health Insurance That Count as Coverage.

Minimum essential coverage and the employer mandate

Starting January 1, 2015, the employer mandate requires that large employers offer coverage that is at least minimum essential coverage to a certain percentage of its full-time qualified employees.


If an Applicable Large Employer fails to offer Minimum Essential Coverage to at least 95% of its full-time employees and an eligible employee who was not offered Minimum Essential Coverage receives a tax credit to purchase insurance in the individual marketplace, the employer could be subject to hefty penalties.

To avoid all potential employer mandate penalties, large employers must offer coverage that is not only Minimum Essential Coverage, but also provides Minimum Value Coverage and is considered affordable.

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