IRS/ACA Minimum Value and Affordability
On November 4, 2014, the IRS and the Department of Health and Human Services issued Guidance that clarified that health plans, sometimes referred to as “MV Plans” or “MVP Arrangements” that do not provide coverage for in-patient hospitalization services or physician services will not meet the Minimum Value Requirement of the Affordable Care Act.
Both the Guidance and the Proposed Regulation indicated that the Departments would soon be issuing a Final Regulation saying the same thing, that is, that such plans will not meet the Minimum Value Requirement.
However, the Departments did provide for a safe harbor. They clarified that the Final Regulations will not apply to:
• plans entered into under a “binding written commitment” prior to November 4, 2014, or
• plans that had begun “enrolling” employees into the plan prior to that date.
• Also, in order to qualify for this safe harbor, the plan year must begin no later than March 1st of 2015.
A “binding written commitment” is defined as a
• A contractual obligation requiring an employer to pay for an arrangement and
“Enrollment” is defined as:
• When the plan begins accepting employee elections to participate in the plan.
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