Minimum essential coverage
In accounting, minimum essential coverage means the health coverage that satisfies the ACA — including an eligible employer-sponsored plan. An ALE must offer it to avoid the §4980H(a) payment, and California requires its residents to have it.
Also called MEC.
Authority: IRC §4980H(a); FTB Pub. 3895C. Sources
The lessons that teach this
From the free founder back-office course, taught on one company's books, with exercises to work it yourself.
- BenefitsDoes a startup have to offer health insurance? › The employer mandate penalties and affordabilityThe §4980H(a) and (b) payments for 2026, how each is triggered and computed, and the 9.96% affordability test.8 min
- BenefitsHRAs: QSEHRA and ICHRA › QSEHRAThe qualified small employer HRA: who may offer it, the 2026 limits, the 90-day notice and the proof-of-coverage rule.6 min
- BenefitsACA reporting: Forms 1094-C and 1095-CForms 1094-C and 1095-C for ALEs, 1094-B and 1095-B for coverage providers, the 2025-year deadlines and the website-notice option the 2024 law created.8 min
What it is not called
Each of these means something else. Use one here and an accountant reading the product notices.
- any insurance
- minimum value (a separate test of the plan's richness)
Also in Benefits
Defined in Lexicon. This page is generated from that document, so the two can't disagree.