What's Covered?All Affordable Care Act (ACA) qualified health plans must include coverage for 10 “essential health benefits,” including:
- Ambulatory Patient Services (outpatient care an insured person can get without being admitted to a hospital)
- Emergency Services
- Hospitalization (including surgery and overnight stays)
- Pregnancy, Maternity, and Newborn Services
- Mental Health and Substance Use Disorder Services (including behavioral health treatment, counseling, and psychotherapy)
- Prescription Drugs
- Rehabilitative and Habilitative Services and Devices
- Laboratory Services
- Preventive and Wellness Services and Chronic Disease Management
- Pediatric Services, including Oral and Vision Care (Adult Dental and Vision coverage are not included as EHBs under the ACA.)
Minimum Essential Coverage (MEC)
Essential Health Benefits are often confused with Minimum Essential Coverage; however, they are not the same.
MEC refers the type of coverage needed to meet the federal individual responsibility requirement of the Affordable Care Act. Qualifying health coverage includes individual market policies, eligible job-based coverage, Medicare, Medicaid, CHIP, TRICARE, and certain other coverage as determined by the Department of Health and Human Services (HHS).
MEC does not include any of the following (excepted) benefits:
- AD&D coverage, disability insurance, general liability insurance, automobile liability insurance, workers’ compensation, credit-only insurance (e.g., mortgage insurance), and coverage for employer-provided on-site medical clinics
- Limited scope dental and vision benefits, long-term care benefits, and Flexible Spending Accounts (FSAs)
- Coverage only for specified disease or illness (e.g., cancer-only policies) or fixed indemnity insurance (a policy that pays a fixed dollar amount regardless of amount of medical expense incurred, such as a maximum $100 per day of hospitalization); but only if offered under a policy, certificate, or contract of insurance separate from, and not coordinated with, any group or individual health plan maintained by the same plan sponsor
- Medicare supplemental policies (also known as Medigap or MedSupp), TRICARE supplemental policies, and similar supplemental coverage to a group health plan; but only if offered under a policy, certificate, or contract of insurance separate from the primary health coverage
Exemptions to the Individual Mandate include the following:
- Religious conscience: A member of a religious sect that is recognized as conscientiously opposed to accepting any insurance benefits. The Social Security Administration manages the process for recognizing these sects according to the criteria in the law.
- Health care sharing ministry: A member of a recognized health care sharing ministry.
- Indian tribes: A member of a federally recognized Indian tribe.
- No filing requirement: A person whose household income is below the minimum threshold for filing a tax return. The requirement to file a federal tax return depends on filing status, age, and types and amounts of income.
- Short coverage gap: An individual who goes without coverage for less than three consecutive months during the year.
- Hardship: A Health Insurance Marketplace, also known as an Affordable Insurance Marketplace, has certified the person as suffering a hardship that makes him or her unable to obtain coverage.
- Unaffordable coverage options: An individual who can’t afford coverage because the minimum amount paid for the premiums is more than 8% of his or her household Modified Adjusted Gross Income (MAGI).
- Incarceration: An individual who is in a jail, prison, or similar penal institution or correctional facility after the disposition of charges.
- Not lawfully present: An individual who is not a U.S. citizen, U.S. national, nor an alien lawfully present in the U.S.
Effective 1/1/2020, California implemented a state-based individual mandate with the passage of Senate Bill 78. Under SB 78, California residents who fail to maintain qualifying health insurance coverage would be subject to a tax penalty, unless they qualify for an exemption. Please reference our CA Individual Mandate FAQs for more details.