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So . . . what exactly is “minimum essential coverage”?

And how does it relate to my healthcare accounting?

If an accountant prepared your taxes, he or she probably asked whether your healthcare met the minimum essential coverage (MEC) standards this year. How do you know whether Uncle Sam finds your insurance acceptable? 

The good news is most comprehensive general health insurance policies are acceptable, and a reputable agent will only sell you those approved plans. (Note: supplementary healthcare policies are just that: a supplement to your primary coverage for, say, dental benefits, cancer coverage, etc. – these policies don’t qualify as providing MEC.)

Insurance plans that meet the government’s MEC standards fall into several categories:

Employer-sponsored plans

  • Group coverage under any sort of a government health plan
  • Small or large group coverage under a state plan
  • A group plan that’s grandfathered into the new system
  • Self-insured employee group health plans
  • COBRA coverage
  • Retiree coverage

Individual health coverage

  • A plan directly from an insurance company
  • A plan from the Marketplace
  • Student healthcare coverage

Government-sponsored programs

  • Medicare insurance
  • Most Medicaid plans
  • VA coverage
  • CHIP (Children’s Health Insurance Program)
  • Most types of TRICARE coverage
  • Department of Defense Nonappropriated Fund Health Benefits Program
  • Refugee Medical Assistance

Page 4 of IRS Publication 974, Premium Tax Credit offers a little more detail if you’re still uncertain of your status. 

It’s not currently necessary to provide proof of coverage, but in the future expect to receive Form 1095 from your insurance carrier.

If you’re not covered, you may qualify for an exemption. Remember: penalties for lack of coverage will increase for the next two years, so if you’re not exempt, it may be time to reconsider taking out a policy.

If you’re overwhelmed trying to prepare your own tax return, the experienced tax accountants at Patrick & Robinson CPAs can help. Contact us at or 904-396-5400. 

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