Relax-All ACA Penalties are NOT Created Equally?

Amazingly, even at this advanced place and time, employers (ignorantly encouraged by their brokers) still treat all employer-centered ACA mandates equally. Of course, I am referring to the infamous “B” (Minimum Value) penalty.

I recently received an update from a reputable plan administrator with the dire warning I must advise my clients that (A) The Affordable Care Act is still the law of the land and (B) I must make certain that affected clients offer group plans that provide Minimum Essential Coverage, and must also have Minimum Value incorporated in their plan designs.

Those of you who know me, or have had occasion listen to my take on this subject, know full well my position on satisfying the Minimum Value component of ACA. The fact is when this ill-conceived law was birthed, one of the most glaring mistakes (among the many) was in making the penalty associated with Minimum Value far less costly or risk burdened than any of the solutions.

Amazingly, 5 years later, reputable consulting firms are still parroting the same line that “we all must sponsor plans that fully comply with all aspects of the Act“. Our firm has consistently counseled our clients to offer plans that do nothing to attempt to comply with Minimum Value and to date, less than 1% of these covered employees have opted for the triggering event (subsidized exchange plans) the risk and the potential exposure of offering plans with “substantial” inpatient coverage, often without reinsurance, simply does not pencil out

Full Disclosure – In fairness, it must be pointed out that most of our business is concentrated in the low-wage hourly service employee sector. And of course, no single strategy works in every situation, we are simply suggesting that this strategy works very well in our world. Unfortunately, you seldom hear advice on any of these forums suggesting selective compliance, we just think it is worthwhile food for thought. Any questions on this can be directed to me at

William Hammett

Principal – Hammett Insurance Services, Inc.

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