Question: If an employee enrolls in a private medical cost sharing plan, will it count as alternative health insurance that meets the Affordable Care Act’s requirements?
Answer: No. A medical cost sharing plan helps individuals pay for their medical costs that are not otherwise covered by health insurance but it does not provide health insurance coverage on its own. It is not going to meet the ACA’s requirements for providing minimum essential coverage. Further, some public agencies offer employees cash in lieu for opting out of employer-sponsored group health insurance. If an agency offers cash in lieu under the terms of an eligible opt out arrangement (which is recommended), then the employee will need to attest that they have alternative minimum essential health coverage for themselves and their entire tax family in order to receive the cash in lieu. Coverage that is not health insurance, such as a medical sharing cost plan, is not minimum essential coverage and will not satisfy the requirements of the eligible opt out arrangement.