The ACA minimum value standard requires that an employer-sponsored health plan cover at least 60 percent of the actuarial value of allowed costs for a standard population. Plans that fall below that threshold fail minimum value under ACA Section 1302(d)(2), regardless of how affordable the employee premium is.
That last clause matters in practice. Brokers who run only the affordability check on a client's employer offer are checking one of two required conditions. A plan can be affordable and still fail minimum value. When that happens, the employee qualifies for Marketplace APTC just as if the offer had never been made.
Key Takeaways
- Minimum value requires a plan to cover at least 60 percent of the actuarial value of all covered benefits for a standard population under ACA Section 1302(d)(2). This is the same 60 percent threshold that defines the Bronze metal tier for individual Marketplace plans.
- The MV test and the affordability test are evaluated independently. A plan that fails either test makes the employee eligible for Marketplace APTC and cost-sharing reductions, assuming income qualifies.
- Employer plans that exclude inpatient hospital coverage or physician services commonly fail the MV threshold. These skinny plans exist in self-funded markets and are most often seen in industries with high turnover and large part-time workforces.
- HHS publishes a Minimum Value Calculator (an Excel-based actuarial model) that any employer can download to test a plan design against the 60 percent standard. Alternatively, a plan covering at least the EHB-equivalent with cost-sharing typical of a Bronze plan likely meets MV under the design-based safe harbor.
- Brokers who serve both group and individual markets need to recognize MV failure during client intake, not at tax time. A client who entered a Marketplace plan while enrolled in employer coverage that fails MV has an APTC eligibility question, not a COB question.
The two independent tests that block APTC eligibility
An employer offer blocks a full-time employee's APTC eligibility only when it satisfies both conditions simultaneously: the plan is affordable (the employee's required self-only contribution does not exceed the IRS threshold) and the plan meets minimum value (covers at least 60 percent of actuarial costs). Either failure opens APTC eligibility, not just one.
For 2026, the federal poverty line safe harbor sets the affordability threshold at 9.02 percent of household income, or the employee's W-2 wages. A self-only premium below that threshold passes the affordability test. The minimum value test runs on the plan design itself, independent of what the employee pays.
The affordability test and the interaction with the 2022 family glitch rule are covered in the employer coverage affordability test guide and the family glitch rule and dependent APTC post. This post focuses on the minimum value side of the equation.
What plans fail minimum value
The 60 percent actuarial value threshold uses an HHS actuarial model for employer plans that runs differently from the individual market AV Calculator. The model tests the plan's cost-sharing structure (deductibles, copays, coinsurance, out-of-pocket maximum) against a standard population's expected claims experience.
Plans most commonly failing the MV threshold are those designed to satisfy the old individual mandate penalty at minimal employer cost. These are often called skinny plans or minimum benefit plans. They typically cover preventive services and outpatient visits while excluding inpatient hospitalization or limiting physician specialist services. Because inpatient claims drive a large share of actuarial cost in the HHS MV model, excluding inpatient coverage almost always pushes a plan below 60 percent.
These plan designs are most common in large self-insured employer groups in industries with high part-time workforces, including retail, hospitality, and food service. Employees at a 70-location restaurant chain paying $50 per month for a plan that excludes inpatient hospitalization may have technically affordable coverage that fails minimum value completely. That employee qualifies for Marketplace APTC.
| Test | What it measures | Result of failure | Who runs it |
|---|---|---|---|
| Affordability | Employee self-only premium as percent of household income (9.02% threshold for 2026) | Employee eligible for Marketplace APTC | Broker or employer using IRS safe harbor worksheet |
| Minimum Value (60%) | Plan's actuarial value of covered benefits for standard population under HHS model | Employee eligible for Marketplace APTC even if premium is affordable | Employer via HHS MV Calculator or qualified actuary certification |
Illustrative comparison. Actual affordability and minimum value determinations depend on employer plan design, employee income, and current IRS thresholds. Verify with the employer before filing a Marketplace application.
The HHS Minimum Value Calculator
HHS publishes a downloadable Minimum Value Calculator, an Excel-based actuarial model, that employers can use to test their plan design. The calculator takes inputs for deductible, copays, coinsurance, and out-of-pocket maximum, and outputs the plan's estimated actuarial value against the standard population. Plans scoring below 60 percent fail MV.
There is also a design-based safe harbor. A plan that covers all ten essential health benefit categories and has cost-sharing consistent with a Bronze or richer Marketplace plan will generally pass MV without running the full calculator. In practice, the safe harbor applies to most standard insured employer plans but not to self-funded skinny plan designs.
Brokers do not run the MV Calculator themselves. The employer or their benefit consultant is responsible for the test. But a broker whose client says the plan covers only preventive services and outpatient visits, or who notices that the plan excludes inpatient care in the Summary Plan Description, should flag this to the client and recommend confirming MV status with HR before enrolling in a Marketplace plan.
Employer penalties for minimum value failure
Applicable large employers (50 or more full-time equivalent employees) that offer coverage failing minimum value face Section 4980H(b) assessable payments when any full-time employee receives Marketplace APTC. The 4980H(b) penalty is calculated per employee who receives APTC, not across the full workforce.
For 2026, the annualized 4980H(b) penalty is $4,460 per employee who receives APTC, prorated monthly. This is distinct from the broader 4980H(a) penalty, which applies when an ALE fails to offer coverage to at least 95 percent of full-time employees and any single employee receives APTC. The 4980H(a) annual exposure is calculated against the entire full-time workforce.
The IRS delivers employer penalty notices via Letter 226-J, typically 18 to 24 months after the tax year in question. By the time a broker hears about this from a group client, the employees affected have long since moved on. The better intervention is at plan design time, not after the letter arrives.
The broker intake question that catches minimum value failures
The standard employer affordability question in most broker intake forms asks the employee premium for self-only coverage. That is necessary but not sufficient. The intake process should also include: “Does your employer plan cover inpatient hospital stays and physician services, or does it cover only preventive and outpatient care?”
A client who answers “I'm not sure” or “it only covers checkups” has flagged a likely MV failure. The next step is to request the Summary Plan Description from their employer's HR department. The SPD must state whether the plan satisfies the ACA minimum value requirement. If it does not make that statement, or if the benefit list excludes inpatient care, the broker should document the uncertainty and file the Marketplace application.
GetInsured's AgentExpress platform does not advertise employer minimum value analysis tools on its public features page as of August 2026. Brokers running these checks are doing it manually or with tools from their benefit consultant relationships, not through consumer-facing quoting platforms. QualityQuotes's subsidy calculator handles the APTC math once eligibility is confirmed; the intake conversation is the broker's responsibility.
Frequently asked questions about the ACA minimum value standard
Common questions from brokers handling clients with employer plan offers, group-to-individual transitions, and affordability test edge cases.
What is the ACA minimum value standard for employer plans?
The ACA minimum value standard requires that an employer-sponsored health plan cover at least 60 percent of the total allowed costs of benefits provided under the plan for a standard population, as defined under ACA Section 1302(d)(2) and the implementing regulations at 26 CFR 1.36B-6. The 60 percent threshold mirrors the actuarial value floor for the Bronze metal tier in the individual Marketplace, though the testing methodology for employer plans uses a separate HHS actuarial model rather than the individual market AV Calculator. An employer plan that falls below 60 percent fails minimum value and does not constitute adequate coverage for purposes of blocking an employee's APTC eligibility, regardless of how low the employee's out-of-pocket premium contribution is.
How does the minimum value test differ from the affordability test?
The affordability test measures whether the employee's required contribution for self-only employer coverage exceeds the IRS threshold (9.02 percent of household income for 2026 under the federal poverty line safe harbor). The minimum value test measures whether the plan itself pays at least 60 percent of actuarial costs. Both tests operate independently, and either failure creates APTC eligibility for the employee. A plan could pass affordability (low employee cost) but fail minimum value (plan covers too little), in which case the employee still qualifies for APTC. The reverse is also possible: a plan could meet minimum value but be unaffordable, with the same APTC-eligible result. Brokers must run both checks separately for any client with an employer offer; conflating the two is one of the most common APTC eligibility errors in group-to-individual transitions.
What kinds of employer plans fail the minimum value standard?
Plans that most commonly fail the 60 percent minimum value threshold are those designed to meet the individual mandate (pre-2019) at minimal employer cost rather than to provide meaningful coverage. These plans, often called skinny plans or minimum benefit plans, typically cover only preventive services and outpatient visits while excluding inpatient hospitalization and sometimes physician specialist services. Because inpatient claims drive a large share of actuarial cost in the HHS MV model, plans that exclude or severely limit inpatient coverage almost always fall below 60 percent. These plan designs are most common in large self-insured employer groups in industries with high part-time workforces, such as retail, hospitality, and food service. An employer plan can also fail minimum value through unusually high cost-sharing, such as an annual deductible significantly above market norms paired with high coinsurance rates, even when the covered benefit list appears standard.
How does a broker verify that an employer plan meets minimum value?
Brokers do not perform the minimum value test themselves. The employer is responsible for verifying that the plan meets the 60 percent threshold, typically through the HHS Minimum Value Calculator (a spreadsheet published by CMS) or a certification from a qualified actuary. When a client reports an employer offer, the broker should ask two questions: is the self-only contribution affordable under the ACA threshold, and does the employer confirm the plan meets minimum value? If the employer cannot confirm MV status, the broker should note this in the client file and proceed with the Marketplace application. Clients who are uncertain whether their employer plan meets MV can request a Summary Plan Description from HR, which should state whether the plan satisfies the minimum value requirement. GetInsured's AgentExpress platform does not advertise minimum value analysis tools on its public features page as of August 2026.
What happens if an ALE employee receives APTC because the employer plan fails minimum value?
If an applicable large employer (50 or more FTEs) offers coverage that fails minimum value and a full-time employee receives an APTC through the Marketplace, the employer is subject to a Section 4980H(b) assessable payment. For 2026, the annualized penalty under 4980H(b) is $4,460 per employee who receives APTC, prorated monthly at approximately $372 per month. This is the narrower B penalty, which applies per APTC-receiving employee, unlike the broader 4980H(a) penalty triggered when an ALE fails to offer coverage to at least 95 percent of full-time employees. The employer receives notice through the IRS Letter 226-J process, typically 18 to 24 months after the tax year in question. Brokers advising employer clients on plan design should flag any self-funded plan that might fail minimum value before open enrollment, not after the IRS notice arrives.
