With the frequent changes in the health insurance landscape, it can be challenging for employers to know what kind of health plans are best for their employees, and tough for employees to choose a plan that best suits the needs of their family. If your business employs Massachusetts residents age 18 or older, or if you are an adult tax filer in Massachusetts, it is important to understand the Massachusetts-specific health coverage requirements that individuals must comply with.
Massachusetts has an “individual health insurance mandate” which requires most adults to carry health insurance if it is affordable to them and that meets certain coverage standards, which are referred to as “Minimum Creditable Coverage” (MCC). The Massachusetts Health Connector sets the coverage and affordability standards, and the Massachusetts Department of Revenue (DOR) monitors and enforces the requirement via the state tax filing process. This mandate is in addition to the federal mandates under the Affordable Care Act (ACA).
What is Minimum Creditable Coverage in Massachusetts?
Massachusetts law requires adult residents to carry health insurance coverage that meets “Minimum Creditable Coverage” (MCC) standards designed to provide access to a broad range of affordable health care services, including preventive health care.
MCC is the minimum level of health coverage that Massachusetts residents must have to avoid tax penalties under the state’s individual mandate law. MCC standards help ensure that the people covered do not suffer a major financial burden if they suffer from a serious injury or illness.
What kinds of health insurance are considered MCC?
The Massachusetts Health Connector (a state agency) has issued regulations to define the key benefits that a plan must provide to be considered MCC. These benefits include a broad range of services, and they apply to all members covered by the plan:
- Medical/surgical care, including preventive and primary care
- Maternity and newborn care, including pre-and-postnatal care
- Prescription drugs
- Emergency services
- Mental health and substance abuse services
- Radiation therapy and chemotherapy
- Ambulatory services, including outpatient, day surgery and related anesthesia
- Diagnostic imaging and screening procedures, including x-rays
You can view a more detailed explanation of the requirements on the Massachusetts Health Connector website.
How does Minimum Creditable Coverage (MCC) work with the federal Minimum Essential Coverage (MEC) mandate?
In addition to Massachusetts law, federal law contains a similar requirement that individuals obtain coverage that meets certain minimum standards. While there is no longer a federal penalty, Massachusetts residents can still face a state tax penalty for not having coverage that meets MCC requirements.
Minimum Essential Coverage (MEC) is health coverage that meets certain standards that are defined by the Affordable Care Act (ACA). Most group health plans, such as coverage provided by employers, as well as Medicare, and most Medicaid are considered Minimum Essential Coverage and satisfy the ACA's individual responsibility requirement (also referred to as the individual mandate).
In almost all cases, plans that meet the state’s MCC requirements also meet the federal MEC requirements.
Frequently Asked Questions
Do Justworks plans meet MCC standards?
All plans offered through the health insurance carriers available through Justworks meet federal Minimum Essential Coverage (MEC) standards, and most plans offered also meet MCC standards.
For the 2022-2023 plan year, the following plans do not meet the MCC standards:
Aetna: A7, A8, C5, D1, G6, H1, H3, C4 (temporary, sunset plan)
UHC: U15, U17, U18, U19, U23
For the 2023-2024 plan year, the following plans do not meet the MCC standards:
- Aetna: A7, A8, C5, D1, G6, H1, H3, H3 PPO, H4, J1
- UHC: U13, U15, U17, U18, U19, U23
How do I know if my plan meets MCC standards?
All health insurance plans available to Massachusetts residents through Justworks are compliant with both MEC and MCC standards, with the exception of the above-listed plans.
Additionally, you should receive a Form MA 1099-HC from your health insurance provider that will indicate how many months you were enrolled in coverage that meets MCC requirements in a given tax year. Sometimes this form can be found in your online member portal through the provider’s website.
If you are an adult residing in Massachusetts and cannot find your form MA 1099-HC, please contact your health insurance provider’s member services to request it.
What happens if I enroll in a plan that does not meet MCC standards?
If you do not have health insurance that meets MCC standards you may be subject to state tax penalties when you file your personal income tax return in Massachusetts.
The individual mandate penalty applies only to adults who can afford health insurance. The penalties vary depending upon your income, age, and family size, and are calculated for each month that you were not enrolled in an MCC compliant plan.
You should consult with your tax advisor or accountant for additional assistance determining how you may be impacted.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.