In recent months I have had a number of calls and mailings from providers, brokers, and general agents selling "MEC" plans. I learned a long time ago in this industry that just because someone shows up at my door stating they have done all the research for me and their product or strategy cuts the mustard, I always do my own research.
That said, I have spent hours reading up on Minimum Essential Coverage (MEC), it’s evolution as it pertains to the ACA, and the application process for an organization looking to have a plan recognized as MEC. I understand that for any entity who wished to have their health plans or policies recognized as MEC there was/is a formal application process outlined by CMS. HOWEVER, if you are an organization that already provides coverage in certain MEC categories (i.e. any health insurance company) then you were/are exempt from having to apply to CMS for a product to be stamped with minimum essential coverage approval. The exempt categories are:
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Employer Sponsored Coverage
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Coverage purchased in the Individual Market, including the Exchange,
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Medicare Part A
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Most Medicaid plans
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CHIP coverage
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certain Veterans coverage
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TRICARE
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Self-funded health coverage and a few other more obscure categories.
HHS acted in good faith by automatically assuming that if an entity fell into their designated statute or regulated categories outlined above then it was a given (mistake # 1) that all plans would include all Essential Health Benefits and that is why they stated that if you were an organization that provides coverage in any of the MEC categories listed above then you DID NOT have to apply for formal MEC recognition.
Certain unscrupulous types, primarily in my observation, those that would be classified as tier 2 carriers/providers who fall into the “Employer Sponsored” or “Self-Funded” health coverage categories have taken advantage of this assumption made by HHS and have re-introduced their mini-med products as “MEC” knowing full well that that they have been given a pass from CMS in terms of having to disclose the full plan design features in order to receive the MEC stamp of approval. If this WERE a requirement they would clearly show that major components of the Essential Health Benefits are missing, such as hospitalization and certainly would not qualify as Minimum Essential Coverage the way CMS has defined it.
In speaking with a number of attorneys and tier 1 carriers (BUCAs) the general opinion is that HHS will soon issue guidance which will either eliminate these new “MEC” mini-med products, or require ALL carriers/providers to have to apply for MEC status for any new product being introduced, even if the entity is already in a currently exempt category as listed above.
The vendors selling these disguised mini-med plans have come up with a pitch that suggests they have flushed out any legal issues and that as long as a plan covers preventative care at 100% it is considered to offer Minimum Essential Coverage. This claim is ridiculous and has no basis in fact whatsoever. If that is the case, point to me where, in the regulations, you are extracting this interpretation? It is purely a sales tactic. If you read the regulations issued by CMS you will note that in order for HHS to recognize a plan s MEC under 45 C.F.R. 156.604 the secretary must determine that the coverage meets substantially ALL the requirements of Title I of the Affordable Care Act. The Secretary will determine whether a plan or policy meets this “substantially all” standard where the applicant certifies that the plan complies with the following provisions: see page 3 of the CMS release pertaining to Minimum Essential Coverage dated October 31st, 2013 for a full list - note that the provision of Essential Health Benefits is on the list.
These "MEC Plan" products are being positioned by salesman as a way for employers to address participation issues, protect the employer from penalties, while at the same time provide something of great value to their employees. The truth is that for populations where participation is an issue, it is likely going to be as a result of workforce demographics working against the employer (i.e. relatively young, low income, high turnover employees) rather than cost. A 28 year old male earning $17,000 a year will usually never visit a doctor in any given year, historically does not value health insurance and therefore unlikely to buy it anyway. However, if he is in a car accident and needs surgery he is going to want hospital coverage which is the very plan feature missing from these new “MEC” plans (disguised mini-meds). Furthermore, most tier 1 carriers have indicated that they will not recognize MEC plan participation as a valid waiver and/or allow a plan to be placed in conjunction with their own coverage. As far as protecting the employer from penalties, once you review the CMS release from October 2013 you will see that this claim has no validity either. In fact, it is entirely made up by sales people trying to further their own agendas on the backs of your clients until such time as they are no longer allowed to. When it does get shut down, you are the one your client will look to for explanation and these MEC plan salesman will have long ridden into the sunset by then.
If navigating the Affordable Care Act was not difficult enough, one must always be aware that every stakeholder is trying to achieve their own goals which are not always in your best interest or those of your clients. The thing I have to remind myself of in this business is that everyone is selling at any given time. It's up to us to determine what is valid and what is not. Carriers, brokers, general agents, etc. will seek opportunities to make money with each new piece of emerging legislation. We owe it to our clients, and our profession to weed out the snake-oil salesman. Don’t take explanations and proposed strategies at face value. Do your homework and your research - consult with an attorney if necessary. Ours is a noble profession, and we must work together to keep it that way.
Finally, if you are selling these new “MEC plans”, please do not contact me. They are one step up from a Ponzi scheme in my opinion. I am not interested and neither are my clients.