MEC PLANS
Self-Funded MEC Solutions for Affordable Care and Compliance
MEC plans are significantly cheaper than traditional health insurance, helping businesses save on healthcare expenses while still meeting the Affordable Care Act (ACA) requirements.
Self-Funded MEC Plans: Just Pay for Care, Not Insurance
Minimum Essential Coverage (MEC) plans provide a cost-effective solution for employers aiming to offer healthcare coverage without the high premiums of traditional insurance. While MEC plans meet the Affordable Care Act (ACA) requirements and cover preventive services, they do not include hospitalization coverage. This makes them an affordable option for employers who want to provide basic healthcare access but without the comprehensive coverage of traditional health insurance.
Preventive Care
ACA Compliance
MEC plans cover preventive services such as screenings, vaccinations, and wellness check-ups, allowing employees to maintain their health at a lower cost while ensuring compliance with ACA requirements.
Doctors, labs, & imaging
Limited Visits
MEC plans place limits on the number of visits or services provided per year, including primary care and specialist visits (typically 3), lab services (up to 2), urgent care visits (up to 3), and imaging services (typically 3).
Self-Funding
Employer Pays Claims
Self-funded MEC plans do not include stop-loss coverage. In a self-funded MEC plan, the employer assumes responsibility for paying employee healthcare claims which are managed by the TPA.
Limited Coverage
No Hospitalization
Basic self-funded MEC plans do not include hospitalization coverage, This is an important distinction that employers and employees should be aware of, as it significantly impacts the scope of coverage.
MEC PLANS: Zero Waste
Maximizing Healthcare Dollars with Self-Funded MEC Plans
Self-funded MEC plans offer a zero-waste approach to healthcare by ensuring that every dollar—aside from the flat monthly administrative fee—goes directly toward paying employee claims.
Unlike traditional plans with high premiums and deductibles, self-funded MEC eliminates wasteful spending and provides immediate financial benefits to employees, as there are no deductibles to meet before coverage kicks in.
Self-funded MEC Financial Highlights
No payments to insurance carriers – Employers pay only for the care their employees use, eliminating traditional insurance premiums.
No deductible – Employees benefit immediately from covered services without the need to meet a high out-of-pocket threshold.
Empowering Employers with Self-Funded MEC Plans
MEC plans are no longer just about ACA compliance—they offer businesses, both large and small, an affordable way to provide meaningful healthcare benefits to employees. By covering essential services like preventive care, doctor visits, lab work, and urgent care, MEC plans help businesses ensure their employees have access to necessary healthcare without the high costs associated with traditional insurance.
Memberly Guides You Through the Self-Funded MEC Plan Process
Transparency
A clear breakdown of where every dollar goes in a self-funded MEC plan.
Weekly Claims Reports
Network Lease Cost
Administration Cost
Cost Controls
Identifying high utilization and opportunities to redirect employees.
Physician-only Network
No-network Options
Bundled Episodes of Care
Data-Driven Decisions
Helping employers make strategic choices to balance costs and non-sharable ACA required care.
Age-based ACA Care
Gender-based ACA Care
Child ACA Care
Cost Controls
Maximizing the value
of every healthcare dollar
spent.
No Payments to Carriers
No Deductibles
No Coinsurance
Eliminating ACA Penalties A & B with Strategic MEC-MVP Pairing
Strategic MEC and MVP Plans for ACA Compliance and Cost Savings
Memberly specializes in designing strategic healthcare solutions that combine Minimum Essential Coverage (MEC) and Minimum Value Plan (MVP) options to help Applicable Large Employers (ALEs) meet ACA compliance. This approach eliminates Penalties A and B while providing employees with both essential and major medical coverage.
Avoiding Penalty A
MEC Plans
Minimum Essential Coverage (MEC) plans help Applicable Large Employers (ALEs) avoid ACA Penalty A, which is imposed when an employer fails to offer at least 95% of full-time employees and their dependents minimum essential health coverage.
By providing a self-funded MEC plan, employers meet the ACA’s Employer Mandate, ensuring compliance and eliminating the risk of substantial penalties.
Avoiding Penalty B
MVP Plans
Minimum Value Plans (MVP) help Applicable Large Employers (ALEs) avoid ACA Penalty B, which is triggered when an employer offers coverage that either does not meet minimum value (covers at least 60% of total medical expenses) or is not affordable under ACA guidelines.
By offering an MVP plan alongside a MEC plan, employers ensure they meet both minimum essential coverage (MEC) requirements and minimum value standards, effectively eliminating both Penalty A and Penalty B.
Sample MEC Plan Design
Customizing MEC
Self-Funded MEC plans can be tailored to meet the specific needs of employers and employees. Below is a sample plan design with typical allowable usage:
Prescriptions
Copay: $10
Generic medications are provided with a $10 co-pay. The cost of generic preventive medications may be less if required by ACA.
Preventive Care
Copay: $0
The plan is ACA compliant which requires preventive care to be available at no cost.
Urgent Care
Copay: $50
Employees can visit an in-network urgent care center up to two times per year.
Doctor Visits
Copay: $30
Employees can visit an in-network primary care physician or specialist up to three times per year.
Labs
Copay: $30
Lab work can be performed at an in-network location up to two times per year.
Radiology
Copay: $30
X-rays and radiology can be performed at an in-network location up to two times per year.
MEC Plan Components
Key Components of a Self-Funded MEC Plan
Memberly strategically assembles the key components of a self-funded MEC plan, ensuring cost savings, efficiency, and employee satisfaction. By projecting claims and reviewing census data, we address age-based preventive care and screenings, ensuring that the plan is tailored to meet the specific healthcare needs of your workforce.
TPA
Third-Party Administrator (TPA) – Manages claims processing, eligibility, and compliance, ensuring smooth plan operation.
Physicians
Optional Provider Network – Grants employees access to preferred doctors, and specialists at negotiated rates.
Pharmacy
Pharmacy Benefit Management (PBM) – Controls prescription drug costs by securing competitive pricing and streamlining medication access.
Support
Member Support & Navigation – Provides employees with guidance on plan utilization, provider selection, and billing issues.
Featured Case Study: Insulation Company
10 Lives
SELF-FUNDED MEC
Small Business Avoids High Insurance Costs with a Self-Funded MEC Plan
A service company with 10 employees and their dependents was seeking an affordable way to provide essential healthcare without the burden of traditional insurance costs. With Memberly’s guidance, the company implemented a self-funded Minimum Essential Coverage (MEC) plan at just $50 per employee per month, which included access to the PHCS Physician-Only Network for discounts on all MEC-allowed services.
The plan provided access to doctor visits, lab work, urgent care, and specialist care—with no deductible, just low, predictable copays for every service. Employees and their families were able to receive routine and preventive care without financial strain, leading to improved health outcomes and greater job satisfaction.
Service Company
MEC Plan Savings
10
EMPLOYEES
Affordable Healthcare Access with MEC
A service company with 10 employees and their dependents sought an affordable healthcare solution to provide essential medical care without the high costs of traditional insurance. By implementing a self-funded MEC plan with a $50 per employee monthly administration fee, employees gained access to doctor visits, lab work, urgent care, and specialist care without a deductible—only paying a low co-pay for services.
Employees received routine and preventive care without financial strain, improving both health outcomes and job satisfaction.
MEC Case Study
For small businesses, MEC plans provide a budget-friendly option to offer healthcare benefits, making it easier to attract and retain talent without breaking the bank. Large employers, including those subject to ACA requirements, can use MEC plans as part of a broader healthcare strategy, combining them with other plan options to balance cost savings and employee well-being.
Self-Funded Plan Types
Choosing the Right Self-Funded Plan: PPO, RBP, or MEC
Self-funded health plans come in three main types: PPO, Reference-Based Pricing (RBP), and Minimum Essential Coverage (MEC). PPO plans offer the broadest access by utilizing a provider network and include stop-loss coverage to protect against high claims. RBP plans, in contrast, do not rely on a hospital network but instead reimburse providers based on a percentage of Medicare rates, creating significant cost savings. MEC plans, which do not include stop-loss insurance, provide basic preventive care benefits to meet compliance requirements at the lowest cost.
PPO
Preferred Provider Organization
Hospitals Network: Aetna, Cigna, United Healthcare, or BCBS
Physician Network: Aetna, Cigna, United Healthcare, or BCBS
Stop-Loss: Individual and Aggregate
Administration: Managed by TPA
Hospitalization: Covered subject to plan terms.
Pricing: Potential savings of 20-40% less than fully insured plans.
RBP
Reference-Based Pricing
Hospital Network: No hospital network. RBP is used to reprice bills.
Physician Network: Multiplan PHCS Physician-only network or no network.
Stop-Loss: Individual and Aggregate
Administration: Managed by TPA
Hospitalization: Covered subject to plan terms.
Pricing: Potential savings of 40-60% less than fully insured plans.
MEC
Minimum Essential Coverage
Hospital Network: No hospital network. MEC plans do not cover hospitalization.
Physician Network: Multiplan PHCS Physician-only network or no network.
Stop-Loss: No stop-loss
Administration: Managed by TPA
Hospitalization: Not covered in basic MEC plans.
Pricing: $50 pepm plus claims. Same rate for EE, EC, ES, and Family.
Self-Funded MEC Plan: Simple, Flat $50 Admin Fee
In a self-funded MEC plan, the pricing structure is straightforward and transparent. The cost is consistent across all plans, with a fixed fee of $50 per employee for administration and network access. On top of this, the employer is responsible for covering the cost of claims, which varies based on the healthcare needs of the employees.
Consistent Administrative Cost Across All Tiers
Memberly offers multiple administrative options for MEC plans, including a physician-only network or a no-network structure. Regardless of the choice, the administrative fee remains $50 per employee per month, with no variation based on coverage tier.
Employee Only
$50/mo. Admin
Plus Claims
Employee -Spouse
$50/mo. Admin
Plus Claims
Employee -Child
$50/mo. Admin
Plus Claims
Family
$50/mo. Admin
Plus Claims
Estimating Claims
Estimating claims for employees in a self-funded MEC plan involves analyzing factors such as employee and dependent age and gender, as ACA-mandated preventive screenings and services vary based on these demographics.
Employee
Claims:
$0 - $100/mo.
Spouse
Claims:
$0 - $100/mo.
Child 1
Claims:
$0 - $50/mo.
Child 2
Claims:
$0 - $50/mo.
What’s needed to start a MEC plan for employees
To start a self-funded MEC plan, employers only need to provide a census that includes the enrolling members and their dependents.
Employee Census
Including dependents
Common Questions
Learn More About MEC Plans
Self-Funded MEC
A self-funded MEC plan is a health plan designed to meet the minimum essential coverage requirements under the Affordable Care Act (ACA). It provides coverage for a basic set of health benefits, including preventive care, and is structured to meet the ACA’s requirements for coverage, but typically does not cover more extensive services such as hospitalization.
A self-funded MEC plan primarily covers preventive services as mandated by the ACA, including wellness visits, screenings, vaccinations, and certain disease prevention services. It ensures that employees have access to these essential services to comply with ACA regulations.
A self-funded MEC plan does not cover hospitalizations, surgeries, or other major medical expenses. It also typically excludes coverage for prescription drugs, mental health services, and emergency care. MEC plans are designed to provide a basic level of health coverage that fulfills ACA mandates but is not intended to replace a comprehensive health insurance plan.
Self-funded MEC plans do not include hospital coverage because they are designed to provide minimal coverage that meets ACA requirements for preventive services. The exclusion of hospital care helps to keep premiums lower for employers and employees while still offering the basic coverage required under the ACA. Employers often pair these plans with other insurance options for more extensive coverage.
No, self-funded MEC plans typically do not include stop-loss insurance. Stop-loss insurance, which protects employers from catastrophic claims, is usually associated with more comprehensive self-funded health plans. Since MEC plans are limited in scope and only cover preventive care, employers usually do not need stop-loss insurance to manage the financial risk associated with these plans.
The PHCS Physician and Ancillary Only Network is a network of healthcare providers that offers access to physicians, specialists, and ancillary services (such as labs, imaging, and physical therapy), but does not include hospitals or inpatient care. Many self-funded MEC plans contract with this network to provide employees with affordable access to essential preventive care without the costs of more expensive hospital-based services.
Self-funded MEC plans use the PHCS network to control costs while providing access to a wide range of preventive services. The PHCS network includes a large number of doctors and other healthcare providers, which allows employers to offer affordable access to basic care, such as wellness checkups and screenings, without the high costs associated with inpatient care and hospital-based treatment.
Employers looking to offer basic health coverage that meets the ACA’s requirements for preventive care may consider offering a self-funded MEC plan. These plans are ideal for smaller employers who do not want to offer comprehensive coverage but still want to ensure that their employees have access to necessary preventive services. It can also be a good choice for companies offering additional coverage through supplemental plans.
Applicable Large Employers (ALEs)—defined as employers with 50 or more full-time employees or equivalents—are required under the ACA to offer health insurance that meets minimum essential coverage to avoid penalties. While ALEs are not required to offer a self-funded MEC plan specifically, they may choose to do so as a cost-effective way to provide the necessary coverage that meets ACA requirements. Smaller employers with fewer than 50 employees are not mandated to offer health insurance but may still choose to offer a self-funded MEC plan as an affordable option for their workforce.
Offering a self-funded MEC plan allows employers to provide employees with the minimum essential coveragerequired by the ACA at a lower cost than traditional health insurance. This makes it an affordable option for businesses looking to comply with ACA mandates while minimizing healthcare expenses. The plan also gives employees access to essential preventive services that support overall health and well-being.
Fully Insured MEC
A fully insured Minimum Essential Coverage (MEC) plan is a health insurance plan where an employer purchases coverage from an insurance carrier to meet ACA requirements for offering basic preventive care services. The insurer assumes the financial risk for claims rather than the employer.
Fully insured MEC plans cover preventive services mandated by the Affordable Care Act (ACA), including routine checkups, immunizations, screenings, and wellness visits. These plans do not typically include major medical benefits like hospital coverage, surgeries, or emergency care.
The main difference is who assumes the financial risk:
- Fully insured MEC: The insurance carrier handles all claims and assumes the financial risk. Employers pay a fixed monthly premium.
- Self-funded MEC: The employer funds claims directly and takes on financial responsibility, often with third-party administrators handling processing.
A fully insured MEC plan provides predictable costs for employers since they pay a fixed premium each month. It also transfers the financial risk of claims to the insurance carrier, which can be beneficial for smaller employers who do not want the risk exposure of a self-funded plan.
No, fully insured MEC plans do not include hospitalization, emergency room visits, surgeries, or prescription drug coverage. They are designed only to meet ACA preventive care requirements and help employers avoid penalties for not offering coverage.
Yes, offering a fully insured MEC plan allows Applicable Large Employers (ALEs) to avoid ACA Penalty A, which applies when an employer fails to offer minimum essential coverage to at least 95% of full-time employees. However, these plans do not meet the ACA’s affordability and minimum value standards, meaning employers may still be subject to Penalty B if employees seek subsidized coverage on the exchange.
Yes, employers offering fully insured MEC plans must comply with ACA reporting requirements by providing Form 1095-C to employees and filing the required forms with the IRS to document that coverage was offered.
Fully insured MEC plans are often chosen by:
- Employers looking for an affordable way to comply with ACA requirements.
- Companies with a high-turnover workforce, such as staffing agencies, hospitality, and retail businesses.
- Employers who want to avoid financial risk associated with self-funded plans.
Yes, employees can supplement a fully insured MEC plan with additional coverage, such as:
- Limited benefit plans for accident or critical illness coverage.
- Hospital indemnity plans to help cover inpatient stays.
- Major medical plans (offered separately) to provide full coverage.
Premiums are set by the insurance carrier and are based on factors such as:
- Employer size and workforce demographics.
- State regulations and insurance market conditions.
- Network access and services covered under the plan.
