Is Your Business’ Health Coverage Considered Minimum Value?

If you have 30 or more full-time employees, the IRS considers you an “applicable large employer”. And are required to follow specific requirements when it comes to offering health insurance to your employees. One of these requirements is that you provide your employees with health coverage that meets what is known as the minimum value, or MV.


To make sure that you’re following the IRS’ rules and that your health insurance plan meets the guidelines for minimum value, it’s important to understand exactly what minimum value is, so you don’t face any financial penalties.

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What Is Minimum Value?

Minimum value is a standard set for health insurance plans offered by employers to ensure that the plans provide at least the minimum coverage mandated by employer responsibility provisions. 


Specifically, the health insurance that you offer your employees is considered minimum value if the plan pays at least 60% of the total allowed cost of benefits that are expected to be incurred. And the plan benefits include substantial coverage of doctor services and inpatient hospital services.

How To Determine if You’re an Applicable Large Employer (ALE)?

You are an ALE if you average at least 50 full-time employees, including full-time equivalent employees, during the prior year. A full-time employee for any calendar month is one who has at least 30 hours of service per week. To determine if you are an ALE, you must:

chalkboard with a checklist on it

  • Determine how many full-time employees you had each month of the prior year. This provision defines a full-time employee for any calendar month as one who has, on average, at least 30 hours of service per week during the month.
  • Determine how many full-time equivalent employees you had each month of the prior year. To do this, combine the number of hours of service of all non-full-time employees for the month (but no more than 120 hours per employee). And divide that total by 120.
  • For each calendar month, add your full-time and full-time equivalent employees for a monthly total. Add the monthly totals. Divide the sum of the monthly totals by 12. If the result is 50 or more employees, you are an applicable large employer.

Penalties For Not Meeting the Minimum Value

The IRS will penalize you if the plan that you offer your employees doesn’t meet the minimum value standard. If you have more than 30 full-time employees, you must meet the minimum value standards for at least 95% of your employees. Otherwise, the annual per-employee penalty for providing unaffordable coverage for 2023 is $4,320.

Need Help?

When it comes to offering healthcare plans to your employees, the more you know, the less you spend. Not only can EZ agents help you navigate the complicated system and avoid penalties, but we can also find you the best group plan for your business! Comparing plans with one of our agents is the best way to make sure that you know what all of your options are. EZ’s agents are trained, licensed, and highly experienced with all the different types of group plans. And they know what will work best for you and your employees.


Our agent will navigate through all available plans to find the most coverage for your employees. While keeping more money in your pocket. We get how time-consuming and frustrating it can be to comb through all the different group plans in your area. We will provide you with a personal agent who will assess everyone’s needs and compare all of the plans available in minutes. All of our services are free, and there are no obligations. To get free quotes, enter your zip code in the bar above, or to speak to an agent, call 888-998-2027.

About The Author:
Cassandra Love

With over a decade of helpful content experience Cassandra has dedicated her career to making sure people have access to relevant, easy to understand, and valuable information. After realizing a huge knowledge gap Cassandra spent years researching and working with health insurance companies to create accessible guides and articles to walk anyone through every aspect of the insurance process.

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