Top Questions about Healthcare
Marketplaces and Student
Exchanges or Marketplaces were established under the Patient Protection and Affordable Care Act (PPACA) which is often referred to simply as the "Affordable Care Act" (ACA) or "Healthcare Reform" to serve as online markets where individuals and small businesses can compare policies and buy insurance. This FAQ is not intended to provide legal advice, but instead, offer guidance toward a better understanding of the insurance options that are available.
Does every state have a Health Insurance Exchange, or Marketplace?
Yes. Some States have developed their own Marketplaces while others have defaulted to the Federally-Facilitated Exchange/Marketplace managed by the Centers for Medicare & Medicaid Service (CMS).
Regardless of which entity manages the Marketplace, visit www.healthcare.gov or call the Customer Service Center toll-free at 800-318-2596 to be directed to the correct Exchange/Marketplace applicable to you.
Individuals interested may only apply for plans available in the State where he/she is a resident. Residency status is established by each State.
What kinds of health insurance options are available through the Exchanges/ Marketplaces?
There is a menu of plan design options available categorized as Bronze (60%), Silver (70%), Gold (80%) and Platinum (90%), determined by the actuarial value levels of benefits. The plans frequently incorporate limited provider networks and high deductibles as cost containment measures.
Individuals with low and moderate incomes may be eligible for an upfront premium tax credit (subsidy) when purchasing insurance through the Exchanges/Marketplaces in order to reduce their monthly premiums. Premium tax credits (subsidies) will be based on the lowest cost “Silver Plan”. That amount can be used to purchase a lesser or greater plan, however, the individual will be responsible for any additional premium.
Once enrolled in an Exchange/Marketplace plan, one must continue enrollment in the same plan throughout the policy year unless a qualifying life event occurs, such as moving to a new state, certain changes in income, or changes in family size (i.e., marriage, divorce, or birth of a child).
What about subsidized premium? What is it and who is eligible?
Premium subsidy is also referred to as the Premium Tax Credit. Individuals with low and moderate incomes may be eligible for an upfront premium tax credit (subsidy) when purchasing insurance through the Exchanges/Marketplaces in order to reduce their monthly premiums. Premium tax credits (subsidies) will be based on the lowest cost “Silver Plan”. That amount can be used to purchase a lesser or greater plan, however, the individual will be responsible for any additional premium.
Eligibility for premium tax credit (subsidy) is based on the Tax Filing and Social Security data provided by the applicant to verify household income. Therefore, if a student is considered a dependent on their parents’ tax return, their eligibility for a subsidy is based on their parents’ income.
To qualify for a premium tax credit (subsidy) to purchase insurance through the Exchange/Marketplace in a State that has expanded Medicaid, one must be a member of a household with earnings between 133% (138% with a 5% disregard = 133%) and 400% of the Federal Poverty Level, with no access to affordable employer-sponsored coverage that has minimum value.
To determine your eligibility for a premium tax credit (subsidy) go to www.healthcare.gov or call the Customer Service Center toll-free at 800-318-2596.
Who is eligible for Medicaid under PPACA?
The initial intent under PPACA, was that all States would be required to provide Medicaid coverage for adults between ages 18 to 65 with incomes up to 133% of the Federal Poverty Level, regardless of their age, family status or health. Due to the Supreme Court’s Decision, not all States will expand Medicaid eligibility.
To find out if your State has expanded Medicaid, visit http://kff.org/health-reform/state-indicator/state-activity-around-expanding-medicaid-under-the-affordable-care-act/Visit http://medicaid.gov/ and select your State for complete information regarding eligibility
Can a College of University continue to have an Insurance Requirement for their students?
Yes, Colleges and Universities may continue to require students to have health insurance as a condition of attendance. This requirement can be met by enrolling in the school-sponsored Student Health Insurance Plan, or completing a waiver form showing proof of comparable coverage. In addition, schools may set specific coverage standards.
Can a student who attends College outside of their State of Residency apply for an Exchange/ Marketplace plan in the State in which their College or University is located?
No, individuals interested in purchasing coverage through the Exchange/Marketplace may only apply for plans available in the State where he/she is a resident. Each State has its own residency definitions and requirements which must be met for a person to legally be considered a resident.
Are International students eligible to purchase a plan through the Exchange/ Marketplace? If so, are they eligible for a premium tax credit or subsidy?
International students who are legally in the United States are eligible to purchase a plan through the Exchange/Marketplace, but are not eligible for a premium tax credit (subsidy). Coverage requirements for International students are outlined in the final HHS Rule on Student Health Insurance Plans.
Are plans purchased outside of the Exchanges/ Marketplaces eligible for a premium tax credit, or subsidy?
Health Insurance Plans purchased outside of the Exchange/ Marketplace, including Student Health Insurance Plans, are not eligible for any federal premium tax credit (subsidy).
Why is enrollment in a Student Health Insurance Plan a good alternative to enrolling in a plan through the State Exchanges/ Marketplaces?
It is important to explore all options and choose the one that is the most cost effective when taking into consideration both premium cost and out-of-pocket costs. Here are some aspects of Student Health Insurance Plans to consider:
- Student Health Insurance Plans offer lower deductibles, co-payments, out-of-pocket maximums, and premiums as compared to the lower cost options (i.e. Bronze, Silver, and Catastrophic) offered through the Exchanges/Marketplaces.
- Coverage under a Student Health Insurance Plan meets the Individual Mandate requirement of Minimum Essential Coverage.
- Student Health Insurance Plans are designed to “wrap around” campus Student Health/Counseling/Athletic Services to provide the best access to Primary and Preventive healthcare.
- One can only purchase coverage under the Exchange/Marketplace applicable to the State in which he or she is a resident. For students attending school out-of-state, this poses risky coverage limitations given that Exchange/Marketplace plans most often require participants to receive non-emergency care within their Preferred Provider Network, which is often Regional.
- Student Health Insurance Plans offer access to expansive Preferred Provider Networks – they are typically designed around a robust National Network.
- Student Health Insurance Plans include Travel Assistance Coverage which guarantees coverage during semester breaks, summer vacation and even while traveling or studying abroad.
- Student Health Insurance is purchased either voluntarily, or on a hard waiver basis as a charge to the student’s tuition bill. Though there is no premium tax credit (subsidy) available, there are also no tax implications.
- Depending on the institution, in some cases students can use Financial Aid to purchase Student Health Insurance.
- For low income students living in States that have not expanded Medicaid, Student Health Insurance will likely prove to be the most cost-efficient option.
- Student Health Insurance Plans are not subject to community rating requirements; therefore, premiums are based on the actual claims experience of a similar population (college students) as opposed to the general population, as is the case through the Exchanges/Marketplaces.
The above information was compiled from various sources including:
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