3 Common MEC Plan Mistakes (and How to Avoid Them)

Choosing a MEC plan? Watch for these costly missteps.

Minimum Essential Coverage (MEC) plans can be a smart, affordable way for employers to meet ACA compliance requirements—especially in high-turnover industries like hospitality, staffing, and home care.

But even the best intentions can lead to penalties if the plan isn’t implemented correctly.

Here are three of the most common MEC-related mistakes we see—and how to stay compliant while keeping your coverage streamlined.

Mistake #1: Not Offering Coverage to All Eligible Employees

Who it impacts: Full-time employees (30+ hours/week)
Risk: ACA Employer Shared Responsibility Part A penalties

Under the ACA, large employers (50+ FTEs) must offer some form of coverage to at least 95% of their full-time employees and their dependents to avoid a Part A penalty. A MEC plan satisfies this requirement.

The problem? Employers sometimes assume part-time or seasonal workers are exempt—or they misclassify employees and fall under the 95% threshold without realizing it.

✅ How to avoid it:

  • Keep accurate, ongoing records of employee hours

  • Reassess worker classifications monthly or per pay period

  • Work with a partner that automates eligibility tracking

Mistake #2: Missing Enrollment and Onboarding Deadlines

Who it impacts: New hires, rehires, and seasonal employees
Risk: Non-compliance, backdated penalties, employee dissatisfaction

MEC plans must be offered in a timely and documented manner. But in fast-paced industries, it's easy for coverage offers to get buried in paperwork—or never sent at all.

The result? Gaps in compliance documentation and employees who weren’t properly offered coverage.

✅ How to avoid it:

  • Use automated workflows to trigger coverage offers upon hire

  • Document declinations, enrollments, and delivery of plan details

  • Provide bilingual support so employees can make informed decisions quickly

Mistake #3: Thinking MEC = Full ACA Compliance

Who it impacts: Employers offering only MEC plans
Risk: ACA Employer Shared Responsibility Part B penalties

MEC plans satisfy the bare minimum ACA requirement, but they don’t meet the Minimum Value or Affordability standards required to avoid Part B penalties.

That means:

  • If an employee declines your MEC offer and receives a premium tax credit through the Exchange, you may still be penalized

  • If your offer isn’t considered "affordable" under IRS guidelines, you could be fined—even if you offered coverage

✅ How to avoid it:

  • Understand the difference between MEC and MVP (Minimum Value Plans)

  • Use affordability safe harbors when calculating employee contributions

  • Ask a compliance expert if your offering strategy protects you from both A and B penalties

Final Thoughts:

A MEC plan can be a powerful tool for ACA compliance—but only when implemented correctly. Documentation, eligibility tracking, and compliance support aren’t just nice-to-haves—they’re essential.

Looking for a partner who makes MEC simple? At EBA, we’ve helped thousands of employers stay compliant, onboard faster, and avoid common missteps. 

Ryan Brown