Large employers are exposed to penalties under the ACA Employer Shared Responsibility provision for the first time in 2015. Whether an employer offers no coverage, minimum essential coverage, or minimum value coverage makes a tremendous impact on their penalty liability.

Only by offering minimum value coverage that is affordable to your full-time employees can an employer eliminate all penalty exposure. But, the law does offer a middle ground (read: much lower penalties) for groups who are offering a minimum level of coverage. In response to this tier system created by the law, some insurance carriers have designed MEC (minimum essential coverage) plans that are built to satisfy the absolute minimum requirements at the lowest possible cost. These products are great options for large, uninsured or underinsured companies. Because of the low premiums and the tax favored status of group plans (as compared to the non-deductible excise tax penalties), it is a low cost way for employers to mitigate their penalty exposure. So much so that there is virtually no reason for an employer to ever pay the large penalty associated with offering no insurance.

These products are also great business generators for brokers. Whatever your opinion of the ACA, one thing is clear: it is good for business if there is a legal requirement to buy what you are selling!

These MEC plans present an opportunity to bring new customers into our market as they are geared at uninsured and underinsured companies. It presents an opportunity for brokers to reach out to CPAs, P&C brokers and other professionals who already have relationships with these customers and provide them some insight into strategies to help their clients to understand and comply with these new compliance requirements.

Please contact us to discuss the opportunity presented by the employer mandate and the new products designed to ease the burden of compliance.