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📋 '''Minimum value plan''' is a [[Definition:Health insurance | health insurance]] plan design concept originating in U.S. federal law under the [[Definition:Affordable Care Act (ACA) | Affordable Care Act (ACA)]], which requires that an [[Definition:Employer-sponsored insurance | employer-sponsored]] group health plan cover at least 60 percent of the total allowed cost of [[Definition:Covered benefit | covered benefits]] to be considered compliant with the ACA's [[Definition:Employer mandate | employer shared responsibility provisions]]. If an employer offers a plan that fails to meet this minimum value threshold, the employer may face [[Definition:Penalty | penalty]] assessments, and employees may become eligible for [[Definition:Premium tax credit | premium tax credits]] to purchase coverage through the public [[Definition:Health insurance marketplace | health insurance marketplace]] instead.

⚙️ Insurers and [[Definition:Third-party administrator (TPA) | third-party administrators]] determine whether a plan meets minimum value by using a [[Definition:Minimum value calculator | minimum value calculator]] provided by the U.S. [[Definition:Department of Health and Human Services (HHS) | Department of Health and Human Services]] and the [[Definition:Internal Revenue Service (IRS) | IRS]], or through an approved [[Definition:Actuarial | actuarial]] certification process. The calculator models the plan's [[Definition:Cost sharing | cost-sharing]] features — including [[Definition:Deductible | deductibles]], [[Definition:Copayment | copayments]], [[Definition:Coinsurance | coinsurance]], and [[Definition:Out-of-pocket maximum | out-of-pocket maximums]] — against a standard population to estimate the plan's [[Definition:Actuarial value | actuarial value]]. Plans must also provide substantial coverage for [[Definition:Inpatient hospitalization | inpatient hospitalization]] and [[Definition:Physician services | physician services]] to qualify. The practical effect for insurers operating in the group market is that product design must be calibrated with this threshold in mind: a plan that nominally appears comprehensive but shifts too much cost to participants through high deductibles or coinsurance may fall below the 60 percent floor.

💡 For [[Definition:Insurance carrier | carriers]] and [[Definition:Managing general agent (MGA) | MGAs]] designing group health products, the minimum value standard acts as both a regulatory constraint and a competitive parameter. Employers rely on their insurers and brokers to confirm that offered plans satisfy this requirement, since non-compliance exposes the employer to significant financial penalties under [[Definition:Internal Revenue Code | Internal Revenue Code]] Section 4980H. The concept is specific to the U.S. regulatory landscape and does not have a direct equivalent in most other jurisdictions, though analogous benefit adequacy standards exist in markets such as Australia (with its [[Definition:Private health insurance | private health insurance]] product tiers) and certain European countries that regulate minimum benefit levels in supplementary health plans. Within the U.S. market, the minimum value threshold fundamentally shapes the architecture of employer-sponsored coverage and the economics of the group health insurance segment.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Affordable Care Act (ACA)]]
* [[Definition:Actuarial value]]
* [[Definition:Employer mandate]]
* [[Definition:Essential health benefit (EHB)]]
* [[Definition:Premium tax credit]]
* [[Definition:Cost sharing]]
{{Div col end}}

Definition:Minimum value plan - Revision history

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