The Affordable Care Act, sometimes called the ACA, defines four new types of health insurance plans for individuals and families. The four types of plans, ranked from most expensive out-of-pocket costs for consumers to the least, are: Bronze, Silver, Gold, and Platinum. All of these plans will all offer the same minimum of benefits. These minimum benefits are determined by the federal and state government and must be included in a plan regardless of any additional benefits the plan decides to include.
For an insurance company to participate in an exchange, i.e. a state-run marketplace offering Affordable Care Act plans, the company does not have to offer all four plans but it must offer at least the Silver Plan and also the Gold Plan.
The Silver Plan has lower out-of-pocket costs than the Bronze Plan but higher out- of-pocket costs than both the Gold and Platinum Plans. All Silver Plans share the same minimum health benefits but the way they charge out-of-pocket costs can differ significantly.
Based on an average person’s expected use of healthcare services, Silver Plans have the insurance company pay 70% of covered healthcare expenses. The remaining 30% of expenses are paid by plan out-of-pocket. These out-of-pocket expenses include deductibles, copayments, and coinsurance. However, the plan’s monthly premium is not included as one of these out-of-pocket costs.
The table below illustrates how out-of-pocket costs can differ among three insurance companies that offer a Silver Plan.
|Silver Plan Example #1||Silver Plan Example #2||Silver Plan Example #3|
|Plan||Blue Cross & Blue Shield of Rhode Island - VantageBlue Direct 3000||Kaiser Foundation Health Plan - DHMO 2000/45 CA||Cigna - myCigna Health Flex 5000|
|Doctor Visit Fee||$20||$45||$30|
|Coinsurance Fee||20% of cost||20% of cost||$0 (after deductible is paid)|
|Annual Limit on Out-of-Pocket Expenses||$6,350||$6,350||$5,000|
As you can see in the table, deductibles and coinsurance can vary significantly among Silver Plans. Even though both Silver Plan examples cover 70% of medical costs, this coverage applies to the entire enrolled population. Some individual may receive more cost sharing and some less depending on the medical services used. The out-of-pocket costs also assume enrollees are using doctors and facilities approve by the plan. If you use a healthcare provider who is not approved, you could pay considerably higher costs and those costs might not apply towards the maximum out-of-pocket expenses you can pay in a calendar year.
There are also special versions of Silver Plans with lower out-of-pocket costs for people whose income qualifies them for enrollment. These Silver Plans are known as "Cost-Sharing Reduction" plans or CSR plans.
The Affordable Care Act provides federal tax credits to people with middle incomes and low incomes whether they are buying individual or family insurance plans. The tax credit is based on the Silver Plan’s costs. If you are wondering what the tax credit is and how to determine if you are eligible then visit our Affordable Care Act Tax Credit page.
Small business can purchase group versions Silver Plans as well as the Bronze, Gold, and Platinum plans. These plans have the same benefit requirements but small group plans have different limits on deductibles. The maximum deductible for an individual enrollee is $2,000 in 2014 while the maximum deductible for a family enrollment is $4,000.
Companies with 50 or more full-time equivalent employees that fail to provide health insurance that covers at least 60% of the covered medical services face a penalty. This 60% minimum percentage means that an entry-level Bronze Plan could satisfy the requirement. Another aspect of the coverage requirement is that it must be affordable, affordability understood as an employee premium not exceeding 9.5% of household income.
Companies with fewer than 50 full-time equivalent employees are exempted from the health insurance requirements. A full-time employee is one who works at least 30 hours a week. Two part-time employees working 15 hours a week equal one full-time equivalent employee.
A state insurance exchange uses the premium amount from a selected Silver Plan within the state to serve as the basis for subsidy calculations. The Silver Plan selected is the Silver Plan in the exchange with the second lowest premium. Even if a subsidy-eligible person chooses a Bronze, Gold, or Platinum plan, his or her subsidy amount is calculated based on the benchmark Silver Plan.
Silver Plans have the same benefit requirements as Bronze Plans. These benefit requirements are known as the Essential Health Benefits. An insurance company can choose the add benefits to a Silver Plan as well as any of the other new Affordable Care Act health plans. However, adding benefits are not required and does not distinguish a Silver Plan from a Bronze Plan, Gold Plan, or Platinum Plan.
The answer is tricky. On average, Silver Plans should have higher premiums than Bronze Plans since Silver Plans pay a higher percentage of medical costs. However, prices vary among insurers and prices vary among regions so it is theoretically possible that there can be a specific Silver Plan that is less expensive than a specific Bronze Plan but this is expected to be an exception rather than the rule.
No. CSR health plans are Silver Plans and enrollees must meet income eligibility criteria. To learn more, visit our Cost-Sharing Reduction (CSR) Health Insurance Page.
On exchanges, every participating insurer offering products must include at least one Silver Plan and one Gold Plan. The same rules do not apply to carriers offering products outside of government exchanges.
No. You may apply your subsidy amount to any of the metal plans purchased on a state health insurance exchange. However, the premium subsidy amount is based on the benchmark Silver Plan.
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