If you’re looking to get health insurance, or even if you’re someone who’s had health insurance for years, there may be terms that you have heard but had no idea what they meant. For instance, have you ever wondered what on/off marketplace or on/off exchange means? Well, Jeff Hess, individual, group, and ancillary health expert here at Empower, knows the answer. Check out the video below!
The terms on-marketplace or on-exchange – or just the marketplace – mean the same. Essentially, they refer to clients going through healthcare.gov or at least having the application go out to receive help on the premiums. On-exchange, on-marketplace, or marketplace focuses on those people who are within 100-400% of the federal poverty level. There’s one caveat: there are some states that have expanded Medicaid to meet the federal guidelines. However, a majority of the states have not. So if you’re in a state that did not expand Medicaid, it’s 100-400%. If you’re in a state that expanded Medicaid, then you’re looking at about 138% of the federal poverty level to 400% of the federal poverty level. These people receive advanced premium tax credits (APTC).
Advanced Premium Tax Credits
You’ll hear the acronym APTC a lot. The client, or applicant, receives an advanced premium tax credit when they go into healthcare.gov to verify their income level. Then, they find out their eligibility. For example, if I was applying and my income was X amount, the government could come back and say, “You get $256 a month.” That $256/month takes my insurance premium from $500/month, for instance, down to $244/month. It has become more affordable. The bottom line, on-exchange is for those who want to see if they qualify for advanced tax credits.
As for those people who are within 250% of the federal poverty level and below, they receive cost-sharing subsidies. Cost-sharing subsidies take a $6,850 deductible, for example, and, depending upon how close you are to the federal poverty line, take it all the way down to a $500 deductible. In some instances, it’s been reduced to a $0 deductible with a maximum out-of-pocket of $500. Where if you were over 250% of the federal poverty level, your maximum out-of-pocket could be $6,850; it will take co-pays from $50 and bring them down to $25. Basically, it ratchets your out-of-pocket exposure to a minimum based on how close you are to the federal poverty level. So, the federal poverty level determines your advanced tax credits and your cost-sharing subsidies.
For the ACA plans that are off-marketplace or off-exchange, the application or applicant does not go to healthcare.gov. They’re paying the full premium. People who are over 400% of the federal poverty level shop off-marketplace so they have to pay the complete premium. Their plan does not change. Either they go to the carrier website with an agent to help them, or they complete a paper application. In other words, they don’t have to deal with the government. They simply buy a plan like they used to.
Does that mean it’s an old plan like they used to sell before 2014 or even before 2010? No. It’s still an Affordable Care Act plan. All individual plans and group plans for the most part are Affordable Care Act plans. It is the standard.
There are plans that are not qualified, or not Affordable Care Act “qualified plans”. An example of a non-qualified ACA plan is short-term medical. Essentially, a non-qualified plan means (1) it doesn’t have the ten essential health benefits that are required by the law; (2) it’s not guaranteed issue; (3) it doesn’t have to cover pre-existing conditions. When you look at those three things, it tells you whether you have a qualified plan or not.
For those people who procrastinate and miss the open enrollment, then you may have to go out and get a non-qualified plan because those are sold year-round. When it comes time to enroll, you have to make sure that you enroll in the times that the government has set, which for 2017 health plans is November 1st through January 31st.
Have Health Insurance Questions?
We hope that this information on off-marketplace and on-marketplace insurance is helpful for you.
Insurance is oftentimes overwhelming and we want to shed light on the industry by answering your questions. Comment below and your question may be the topic of our next post!
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Empower Brokerage wants to help you find the insurance coverage you need and help you save money getting it. Stay on top of your health and give us a call at (844) 410-1320.
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