Healthcare plans without in-patient hospitalization coverage don’t provide minimum value

In Notice 2014–69, the IRS advised taxpayers and businesses that employer-sponsored health care plans that do not provide in-patient hospitalization services or physician services do not meet the requirements for providing minimum value in respect to the premium tax credit.

A plan that fails to provide substantial coverage for these services would fail to offer fundamental benefits that are nearly universally covered, and historically have been considered integral to coverage, under typical employer-sponsored group health plans. If such a plan were to exclude such coverage, that could substantially affect the composition of the population covered by discouraging enrollment by employees who have, or expect that they might have, significant health issues.

What does this mean for the tax credit?

Promoters of these plans of course contend they meet the minimum value, however the Department of the Treasury and the Department of Health and Human Services have a different opinion on the matter.  As a result, the IRS has proposed changes to the regulations and a decision is expected in 2015. The result would be that any plan that starts enrolling or a new year of coverage begins on or after November 4, 2014 would not meet the minimum value for the premium tax credit.


An employee or family member who is offered coverage under an eligible employer-sponsored plan that offers affordable MV coverage for the employee may not receive premium tax credit assistance for coverage in a qualified health plan. An applicable large employer may be liable for a section 4980H assessable payment if one or more of its full-time employees receives a premium tax credit.

Employer responsibility

An employer that offers a Non-Hospital/Non-Physician Services Plan to an employee must not state or imply in any disclosure that the coverage under the plan precludes an employee from obtaining a premium tax credit, if otherwise eligible. The employer also must timely correct any prior disclosures that stated or implied that the offer of the Non-Hospital/Non-Physician Services Plan would prevent an otherwise tax-credit-eligible employee from obtaining a premium tax credit.

Additional information regarding the Affordable Care Act can be found at and