Covered California Certified Enroller Practice Exam

What is the minimum value of an employer-sponsored health plan?

1. It pays at least 50% of total medical costs

2. It pays at least 60% of total medical costs

3. It pays at least 70% of total medical costs

4. It pays 100% of preventive services

The correct answer is: It pays at least 60% of total medical costs

The minimum value of an employer-sponsored health plan is defined by the Affordable Care Act (ACA) as the plan paying at least 60% of the total average costs of medical care for a standard population. This means that, on average, the plan must cover at least 60% of covered health expenses, leaving the enrollees responsible for the remaining 40%. This standard is significant because it ensures that employees receive a level of coverage that protects them from high medical expenses, while also providing a baseline for the types of plans that can be offered by employers. Plans that meet this minimum value requirement are essential for employees who might consider enrolling in other health coverage options, such as those offered through the health insurance marketplace. In contrast, the other options specifying different percentages or coverage types do not align with the established ACA definition for minimum value, which specifically stipulates the 60% threshold. This regulation plays a crucial role in promoting affordable healthcare access for workers and their families.