Minimum Essential Coverage (MEC)
Minimum Essential Coverage (MEC) is health insurance that meets ACA requirements. Qualifying plans include employer-sponsored coverage, marketplace plans, Medicare, Medicaid, CHIP, and TRICARE. The federal individual mandate penalty was reduced to $0 starting in 2019, but some states maintain their own individual mandate with penalties.
Exam Tip
Federal penalty = $0 since 2019. Some states still have penalties (CA, MA, NJ, RI, DC). MEC includes employer, Medicare, Medicaid, marketplace plans. Short-term plans do NOT qualify.
EA exam baseline: For the 2026–2027 SEE, use Tax Year 2025 and federal tax law through December 31, 2025. Later-year amounts below are explicitly labeled comparisons, not the default exam year. IRS SEE policy.
What is Minimum Essential Coverage?
MEC is the type of health coverage that satisfies the ACA individual mandate. While the federal penalty is $0, some states still impose penalties for not having coverage.
Types of MEC
| Category | Examples |
|---|---|
| Employer plans | Group health, COBRA |
| Government programs | Medicare, Medicaid, CHIP, TRICARE, VA |
| Marketplace plans | Bronze, Silver, Gold, Platinum |
| Individual plans | ACA-compliant individual policies |
| Other | Student health plans, Peace Corps |
State Individual Mandates (Active)
| State | Penalty |
|---|---|
| California | $900/adult or 2.5% of income |
| Massachusetts | Varies by income |
| New Jersey | $695/adult or 2.5% of income |
| Rhode Island | $695/adult or 2.5% of income |
| DC | $695/adult or 2.5% of income |
What Does NOT Qualify as MEC
| Not MEC | Examples |
|---|---|
| Short-term plans | Limited duration insurance |
| Sharing ministries | Health care sharing ministries |
| Fixed indemnity | Pays fixed amount per event |
| Dental/vision only | Standalone dental or vision |
Exam Alert
Federal mandate penalty = $0 since 2019, but some states still penalize. MEC includes employer plans, Medicare, Medicaid, marketplace plans. Short-term plans and health sharing ministries do NOT qualify. Premium Tax Credit requires marketplace enrollment.
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