The 1094 form that is sent to IRS includes a Minimum Essential Coverage Offer Indicator (MEC Indicator). This indicator tells the IRS if the ALE Member offered minimum essential coverage to at least 95% of its full-time employees and their dependents for the reporting year. This MEC indicator is used to issue penalties to employers.
What is the MEC Override Tool?
This override tool is a breakdown by month of the employees that are being used in the calculation of the MEC indicator.
To access the override and to view the list of employees included in the MEC calculation for a given month, click into "YES" or "NO" for a given month in the Minimum essential coverage indicator section of the 1094 forms.
When clicking into a month, you will see a list of employees that are included in the MEC calculation for the given month. Employees included in the calculation but have their MEC state set to "No" are displayed at the top of this employee list. Employees who have their MEC state set to "Yes" will be displayed at the bottom of the list.
You are able to see the following information about an employee for each month of the MEC calculation:
- An employee's MEC Status (Yes/No)
- Employee Last Name and First Name
- Employee Hire Date
- Employee Term Date
- MEC action
For employees that have a MEC offer state of "NO" we have created a MEC toggled that allows an employee to have a MEC override to be applied to their record for a month.
This MEC override tool will be used when a group believes that MEC was truly offered to an employee in a given month, even though that is not the system generated value. For example, this tool could be used for groups that have their term rules for a plan set to "Employment Termination." Because the employee was not offered coverage for the entire month (coverage ended on their employment termination) the employee MEC indicator will be set to "No." You can use this tool to set the indicator to "Yes" depending on how you interpret the IRS regulations on terminations.