What Counts as MEC
Minimum Essential Coverage (MEC) is any health coverage that satisfies the ACA's coverage requirements. For employer-sponsored plans, MEC includes employer-sponsored group health plans that provide comprehensive medical benefits. The key question for ALE compliance is whether the coverage offered qualifies as MEC.
| Coverage Type | MEC? | Notes |
|---|---|---|
| Employer-sponsored group health plan | Yes | If it provides comprehensive medical benefits |
| COBRA continuation coverage | Yes | Continuation of MEC is MEC |
| Medicare | Yes | Government-sponsored MEC |
| Medicaid | Yes | Government-sponsored MEC |
| Dental-only plan | No | Excepted benefit; not MEC |
| Vision-only plan | No | Excepted benefit; not MEC |
| EAP (no medical benefits) | No | Excepted benefit; not MEC |
| Fixed indemnity plan | No | Excepted benefit; not MEC |
The 95% Offer Requirement
To avoid the 4980H(a) penalty, ALEs must offer MEC to at least 95% of their full-time employees (and their dependents). The 5% de minimis exception allows for a small number of inadvertent failures to offer coverage without triggering the penalty.
Dependent Coverage
ALEs must offer MEC to the dependents of full-time employees. For ACA purposes, "dependents" means children up to age 26 — not spouses. An ALE that offers coverage to employees but not their children is not complying with the dependent coverage requirement.