MVP Shores up the Pay or Pay Problem!


When I was a boy in the 80's I used to dream of playing hoops in the NBA with a sea of fans raining the above chant down on me like fans did for Magic Johnson and Larry Bird . Alas, by age 13 I knew God had other plans for me and my dreams of exceling on the hardwood would have to be realized along side other middle aged men in a health club at 6 AM before work. Oh well, selling benefits is not so bad.

We are excited to announce Century Healthcare's new product for the Fall, the MVP. The MVP means something much different to us in the benefits world than it did back in the 80's when Magic and Larry were dominating basketball. Our MVP stands for 'Minimum Value Plans' and they are our new bonafide accompaniment to the MEC "Minimum Essental Coverage."

You may recall we added the MEC last year for very large groups who have never offered coverage to comply with the ACA's "Pay or Play" penalty. You can see a rundown of the MEC including sample quotes here.

The problem though was the MEC only addresses the Type A penalty employer mandate $2000 penatly but not the Type B minimum value penalty of $3000.

Even if the employer offers the MEC to all employees, because the MEC does not meet minimum value, employees can still access a subsidy on the exchange and employers could realize a fine of $3000.

Now, an employer can pay for the MEC for all employees and offer the MVP to any employee who would like to share in the cost of a full heath insurance benefit. The employer pays its required share and the employee picks up no more than 9.5% contribution. These products are offered side by side and the CHC's nice feature is it waives participation requirements for the MVP. Literally one member could enroll and they'll accept the group.

You can see a sound strategy forming here whereby the employer pays for the MEC for everyone (eliminates the Type A 'must offer coverage' penalty) and offers the MVP at the minimum cost share (eliminates the 'minimum value' penalty).

But what about benefits and cost for the MVP? You can peruse a sample quote here. I'm not going to lie to you, it's ugly. The rates are so high because they have such low participation that will invite adverse selection. But the idea here is not to have the best rate but to offer a solution to employers in need.

The MEC's and MVP's are not a large part of what we do. However they do fill a niche and they give us a solution for large clients who have no idea how to handle the pay or play mandate.

Please email me or give me a call to talk further!


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