Glossary · Benefits
Minimum Essential Coverage (MEC)
The base level of health coverage an Applicable Large Employer must offer to substantially all full-time employees to avoid the 4980H(a) penalty.
All terms
Entravia Editorial
MEC is a low bar — most major medical and PEO master plans easily meet it. The more substantive ACA tests are minimum-value (covering at least 60% of expected costs) and affordability.
Failing to offer MEC to 95% of full-time employees triggers the much larger 4980H(a) "sledgehammer" penalty.
Related terms
- ACA (Affordable Care Act)Federal law governing employer-sponsored health coverage, including employer-mandate, reporting (1094/1095), and minimum-essential-coverage requirements.
- ACA Affordability ThresholdThe maximum percentage of an employee's household income that the employee's required contribution for self-only coverage may equal under the ACA employer mandate.
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