MEC

Abbreviation with 2 meanings

MEC
Stands forMinimum essential coverage
Meanings2
CategoriesMedical, Business & Finance

MEC has two meanings. It stands for Minimum essential coverage (health insurance) or Modified endowment contract (insurance).

Meanings of MEC at a glance

#MEC stands forContext
1Minimum essential coverageMedical › Health Insurance
2Modified endowment contractBusiness & Finance › Insurance

1. Minimum essential coverage

Medical · Health Insurance Abbreviations

Type of health coverage that satisfied the Affordable Care Act's individual mandate, including employer plans, marketplace plans, Medicare Part A, most Medicaid, CHIP and TRICARE. Losing MEC is a qualifying event for a marketplace special enrollment period.

Example: Short-term plans aren't MEC, so losing one doesn't trigger special enrollment.

The federal penalty for going without coverage was reduced to zero starting in 2019, but California, Massachusetts, New Jersey, Rhode Island and the District of Columbia enforce their own mandates. Coverage is reported to the IRS on Forms 1095-B and 1095-C.

2. Modified endowment contract

Business & Finance · Insurance Abbreviations

Life insurance policy funded with more premium than federal limits allow under the "seven-pay test," which loses some tax advantages: loans and withdrawals are taxed as income first and may face a 10% penalty before age 59½.

Example: Adding that lump sum would turn the policy into a MEC.

The MEC rules were created by the Technical and Miscellaneous Revenue Act of 1988 to curb the use of life insurance as a tax shelter. The death benefit remains income-tax-free.

More health insurance abbreviations

  • MACRA – Medicare Access and CHIP Reauthorization Act
  • MAGI – Modified adjusted gross income
  • MAPD – Medicare Advantage Prescription Drug plan
  • MCO – Managed care organization
  • MIPS – Merit-based Incentive Payment System
  • MLR – Medical loss ratio
  • MOOP – Maximum out-of-pocket
  • MPFS – Medicare Physician Fee Schedule

See all 107 health insurance abbreviations →

More insurance abbreviations

  • IUL – Indexed universal life
  • LAE – Loss adjustment expense
  • LTC – Long-term care insurance
  • LTD – Long-term disability insurance
  • MedPay – Medical payments coverage
  • MGA – Managing general agent
  • MVR – Motor vehicle record
  • MYGA – Multi-year guaranteed annuity

See all 86 insurance abbreviations →

This entry is for general education and is not medical advice. Abbreviation use varies between institutions; always confirm in context.