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The silver plan is one of four metal categories of insurance plans created by the Patient Protection and Affordable Care Act (ACA) and available through the healthcare marketplace. Silver plans cover the same ten basic health benefits as all plans available on the marketplace. Insurance companies may offer more coverage on individual plans to make them more appealing to consumers.
Silver plans generally cover 70% of the costs of these basic health benefits. The additional 30% of costs will be paid for by the enrollee in out-of-pocket expenses. Out-of-pocket expenses include deductibles, co-insurance, co-pays, and costs for services not covered under the plan. The monthly premium is not considered an out-of-pocket expense. These figures are based on calculations of how much healthcare will be used by the entire pool of enrollees of a particular plan. Therefore, cost sharing for individual plans may vary.
For individuals or families whose income is 250% or less of the Federal Poverty Level, silver plans offer cost-sharing reductions. These plans reduce the out-of-pocket expenses enrollees must pay, and increase the costs covered by the plans themselves. For example, if an enrollee has an income that is no more than 150% of the poverty level then the portion of medical expenses that will be paid for by a qualified silver plan will be up to 94%, leaving the enrollee responsible for only 6% of covered medical costs. The same program also reduces the maximum out-of-pocket expenses. These cost-sharing reduction plans are only available on the Silver level and only through the health insurance marketplace.
Those enrolled in a silver plan may also be eligible for a federal income tax credit based on the second lowest cost silver plan in that state’s health insurance marketplace. The tax credit is based on income and ranges from 2% to 9% of your annual health insurance premium.
In order for an insurance company to offer plans on the marketplace, they must offer at least gold and silver plans. Whichever plan metal level you decide on, be sure to study the Summary of Benefits and Coverage (SBC) for each plan carefully. The SBC provides cost sharing details in a standard format so that consumers can easily compare plans.
Need Help? Contact RedQuote!
As we administer COBRA for the employers we work with, RedQuote helps beneficiaries compare their COBRA plan with numerous individual plan options to help them choose the best plan for their age, budget and coverage preferences. If your company might be interested in hiring us to offer these options to beneficiaries coming off your group medical plan, contact us today!
Published Nov 4, 2016.