Health Insurance Exchange Overview
Effective as of January 1, 2014 health insurance exchanges will begin to provide health insurance coverage options for consumers. A health insurance exchange is not a health insurance carrier but an inventory of standardized plans that are subject to government regulations. Individuals and employers will have access to health insurance exchanges to purchase coverage that is eligible for federal subsidies. Each state is required to establish a health insurance exchange. If the state elects not to establish a health insurance exchange, the federal government can create an exchange to serve the consumers in that state. Health insurance carriers will have the option whether to market coverage within the exchange.
President Obama promoted the concept of a health insurance exchange as a key component of his health reform initiative. Obama stated that it should be “… a market where Americans can one-stop shop for a healthcare plan, compare benefits and prices, and choose the plan that’s best for them, in the same way that Members of Congress and their families can. None of these plans should deny coverage on the basis of a preexisting condition, and all of these plans should include an affordable basic benefit package that includes prevention and protection against catastrophic costs.”
The exchanges will provide three levels of coverage designated as metallic plans and categorized by actuarial value. Actuarial value is defined as the amount of healthcare expenses that the plan will be responsible for paying. The insured will be responsible for the remaining amount through payment of deductibles, coinsurance and copays. The plans are named, Gold, Silver and Bronze. Gold plan will have an actuarial value of 80%, Silver will have an actuarial value of 70% and Bronze will have an actuarial value of 60%. The exchanges will offer a catastrophic plan that is limited in benefits and will only be available to individuals under the age of 30 or to those with financial hardships.
Applications that are submitted between October 1, 2020 and December 15, 2020 will be assigned a January 1, 2021 effective date. Subsequent applications submitted between the first and fifteenth day of the month will have the first day of the following month assigned as the effective date. If the application is submitted between the sixteenth and the last day of the month during open enrollment, the coverage effective date assigned will be the first day of the second following month.
Individuals insured through the exchange will be eligible for premium subsidies, also known as premium tax credits, if they meet certain income requirements. For consumers who are between 100% and 400% of the federal poverty level (FPL), health insurance premium cost will be based on a percentage of their income.
| Income Level | Annual Premium Not To Exceed Percentage of Income |
| Up to 133% FPL | 2% of income |
| 133 to 150% FPL | 3 to 4% of income |
| 150% to 200% FPL | 4 to 6.3% of income |
| 200 to 250% FPL | 6.3% to 8.05% of income |
| 250 to 300% of FPL | 8.05% to 9.5% of income |
| 300% to 400% FPL | 9.5% of income |
Federal poverty limits vary by family size. The following table illustrates the income that falls between 100% and 400% of FPL depending on family size.
| Family Size | Income Between 100% and 400% FPL |
| Individual | $12,760 to $51,040 |
| Family of 2 | $17,240 to $68,960 |
| Family of 3 | $21,720 to $86,880 |
| Family of 4 | $26,200 to $104,800 |
For those individuals who purchase health insurance through the exchange and meet income levels between 100% to 250% of the federal poverty level, cost sharing assistance will be provided. In order to qualify for cost sharing, in addition to meeting the FPL requirements, the individual must enroll in at least a silver plan. For individuals with incomes between 100% and 200% of the FPL, a 2/3 reduction in premium will be available. For the remaining individuals between 200% and 250%, the reduction will be either 1/2 or 1/3 depending on income.
Additional benefits will be available to individuals under 250% of the FPL. Individuals with incomes between 100% and 150% of FPL will benefit from plans with an actuarial value of 94%. Those with income levels between 150% and 200% will be insured by plans with an actuarial value of 87%. Insurance coverage will be offered at 73% actuarial value for individuals with annual income of 200% to 250%.
STATESIDE CAN HELP
Stateside Insurance Services, since 2003, has focused on providing comprehensive health insurance information, responsive customer service and expert industry knowledge for Texas consumers. Stateside has annually been recognized by health insurance carriers and the Health Insurance Marketplace as a Top Producer in Texas.
Whether the health insurance policy is for an individual, family, small business or supplemental Medicare coverage, Stateside dedicates the time, and our deep industry expertise, to ensure our clients have identified the best health insurance plan for their specific needs.
Stateside is available to answer any general questions regarding your coverage options, can provide a subsidy determination, and even assist in creating and submitting online applications for ACA compliant plans during an Open Enrollment or throughout Special Enrollment periods.
Stateside can be contacted either by phone (866) 444-3332 (toll free) or by email at info@texasplans.com. Our Telephone Appointment System can be accessed through:
Phone Appointment Reservation.
By using the Telephone Appointment System, clients can take advantage of scheduling a health insurance discussion when convenient for their schedule. During Open Enrollment phone appointment availability is expanded to include extended hours and weekends.