MINIMUM VALUE (MV)
Back to GlossaryDefinition
A standard indicating that an employer plan pays at least 60% of total allowed costs of benefits.
Summary
Minimum Value (MV) is a healthcare coverage standard that ensures employer-sponsored health plans meet a basic level of comprehensiveness. When a plan has minimum value, it means the insurance covers at least 60% of the total expected healthcare costs for a standard population. This is important because it determines whether employees are eligible for premium tax credits on health insurance marketplaces - if their employer offers minimum value coverage, they typically cannot receive these subsidies.
Usage Context
This term is crucial when studying the Affordable Care Act, employer mandate requirements, health insurance marketplace eligibility, and employee benefits compliance.
Common Confusions
- Thinking minimum value means they personally will only pay 40% of costs (it's based on population averages, not individual costs)
- Confusing minimum value with affordability requirements
- Believing minimum value automatically makes a plan good or comprehensive
- Not understanding that minimum value affects eligibility for marketplace subsidies
