What is the difference between Bronze, Silver, Gold, and Platinum health insurance?

The four ACA metal levels describe how health care costs are typically divided between the plan and the plan holder. Bronze plans have an average actuarial value of 60%, Silver 70%, Gold 80%, and Platinum 90%.

Is Bronze or Silver health insurance better?

Neither plan is better for everyone. Bronze policies generally have lower premiums and higher out-of-pocket costs, while Silver plans generally have higher premiums and lower cost-sharing. Silver may be especially beneficial if you qualify for cost-sharing reductions (CSRs).

Is Gold health insurance worth it?

A Gold plan may be worth considering if you expect to use healthcare frequently and prefer paying a higher monthly premium in exchange for lower costs when receiving care. Compare the plan's total annual costs before enrolling.

What metal level is best for someone healthy?

Someone who expects to use little health care may prefer Bronze plans because of their lower monthly premium rates. However, compare the deductible, out-of-pocket maximum, network, prescription coverage, and available financial assistance before choosing a plan.

Does a higher metal level mean better health insurance?

No. Metal levels describe cost-sharing, not the quality of medical care. A Platinum plan generally pays a larger share of covered costs than a Bronze plan, but both must meet ACA requirements for Marketplace coverage.

Who is eligible for Open Enrollment?

Most people who want to enroll in or change individual health insurance coverage through the ACA Marketplaces can only do so during the federal or their state’s Open Enrollment Period. Eligibility for financial assistance, such as cost-sharing reductions or advanced premium tax credits, depends on household income and other factors.

What happens if an individual misses Open Enrollment?

If you miss Open Enrollment, you can’t enroll in or change a Marketplace plan until the next Open Enrollment Period unless you qualify for a special enrollment period because of a qualifying life event.

Can states shorten or extend Open Enrollment?

Yes. State-based Marketplaces can have different Open Enrollment dates and may offer shorter or longer enrollment periods. If you use a state exchange, check its website for your specific dates and deadlines.

Is Open Enrollment the same as an employer’s enrollment period?

No. Marketplace Open Enrollment and an employer’s annual benefits enrollment period are separate. Your employer may set its own enrollment dates for job-based coverage included in your benefit packages, so check with your employer for those deadlines.

Can individuals enroll outside of Open Enrollment?

Yes, if you qualify for a special enrollment period because of a qualifying life event. Eligible life events include loss of employee health benefits, changes in household, or a change in residence. Medicaid and the Children’s Health Insurance Program (CHIP) offer year-round enrollment for eligible people. However, keep in mind that enrolling in these plans can impact your eligibility for any HRAs your employer provides. Medicaid and QSEHRA can work together, but Medicaid doesn’t work with a CHOICE Arrangement (formerly ICHRA).

What are the advantages of individual health insurance?

Individual health insurance gives employees more control over their health coverage. They can choose a plan based on their preferred doctors, provider networks, medical needs, and budget. Additionally, unlike group coverage, individual policies are portable, so employees can keep their coverage if they leave their employer’s company.

Is individual health insurance cheaper than group health insurance?

Individual health insurance can be less expensive than small group coverage, although costs vary by location, plan, age, and household. Employers can offer their staff a stand-alone HRA to provide a predictable contribution toward employees’ individual premiums and other eligible medical expenses.

Can an employer reimburse employees for individual health insurance?

Yes. Employers can use a formal HRA, such as a CHOICE Arrangement or a QSEHRA, to reimburse employees tax-free for eligible individual health insurance premiums. Eligibility, employer contribution limits, and reimbursable medical expenses depend on the HRA type and plan design.

What is the difference between individual and group health insurance?

With group health insurance, the employer selects the plan and employees generally enroll in the coverage offered. Coverage specifics depend on the plan, meaning employees have less control over their care options. With individual health insurance, each employee chooses and enrolls in their own policy on public exchanges or through private insurance companies. An HRA allows an employer to contribute toward the cost of employees’ individual coverage instead of offering a traditional group plan.

Can employees get premium tax credits with individual health insurance?

Under the Patient Protection and Affordable Care Act (ACA), employees may qualify for premium tax credits when purchasing ACA Marketplace coverage, depending on their income and other eligibility factors. However, an HRA can affect eligibility for those credits. Employees offered a CHOICE Arrangement must choose between the HRA and their tax credits. In most cases, employees should waive their tax credits and opt into their benefit if it’s affordable. With a QSEHRA, employees must reduce their HRA contribution by their subsidy amount if their benefit is unaffordable for one or more months. Those with an affordable QSEHRA can’t collect their tax credit for that month.

What is the difference between an HSA and an HRA?

An HSA is a tax-advantaged savings account that employees and employers can contribute to, up to the annual maximum limit. An employer can offer an HSA as part of their company’s benefits package, or an individual can open one on their own. In either case, the individual always owns it and the funds inside — even if they leave their employer’s organization. An HRA is a personalized health benefit that lets employers contribute tax-free money toward employees’ individual health plan premiums. With a CHOICE Arrangement, there are no minimum or maximum contribution limits. HSA funds roll over annually and remain with the employee indefinitely, while unused HRA funds remain with the employer at the end of the plan year or if an employee leaves their company.

Can you use HSA funds for health insurance premiums?

You can’t use your HSA to pay for individual or group health insurance premiums. However, the IRS allows account holders to pay premiums for COBRA coverage, health coverage while receiving unemployment compensation, qualified long-term care insurance, and Medicare Parts A, B, C, and D after age 65. If your employer offers a CHOICE Arrangement, they can design the benefit to allow tax-free payments toward employees’ individual health plan premiums.

Can you have an HSA and an ICHRA at the same time?

Yes. An HSA can pair with an ICHRA, now called the CHOICE Arrangement, if the plan design meets HSA eligibility rules. This means the CHOICE Arrangement must limit reimbursement to employees' health insurance premiums, as well as dental and vision expenses. Alternatively, employers can limit the ICHRA to reimburse out-of-pocket expenses only after employees reach their deductibles. A standard ICHRA can make an employee ineligible for an HSA because it could reimburse all qualified healthcare costs outlined in IRS Publication 502.

What happens to your HSA if you change jobs?

Your HSA stays with you when you leave an employer. You keep the account balance, including any employer contributions deposited, and can continue using the funds for qualified medical expenses. You can contribute to the account at a new job or on your own.

What happens to HSA funds you don't use by the end of the year?

Unlike a health FSA, unused HSA money rolls over automatically from year to year. You don't have to spend the funds by December 31, and you can continue saving or investing eligible funds for future healthcare expenses.

What is the ACA affordability percentage for 2027?

As confirmed in IRS Revenue Procedure 2026-26, the ACA affordability threshold for plan years beginning in 2027 is 10.22%, up from 9.96% in 2026.

How do you calculate ACA affordability for 2027?

Multiply the applicable income or wage measure by 10.22%, depending on the affordability test or safe harbor you’re using. For example, under the Rate of Pay safe harbor, an employee earning $5,000 per month has a monthly affordability limit of $511.

What happens if an employer's health coverage isn't affordable?

An ALE may owe one of two employer shared responsibility payments under Section 4980H if its coverage is unaffordable or fails to meet minimum essential coverage (MEC) or minimum value standards and at least one full-time employee receives a premium tax credit for a Marketplace plan.

Can employers use safe harbors to determine ACA affordability?

Yes. ALEs can use the federal poverty level, rate of pay, or Form W-2 safe harbor to verify affordability for purposes of the employer mandate. These methods help employers determine ACA compliance without knowing employees' actual household income.

How does the 2027 affordability threshold affect a CHOICE Arrangement?

The 10.22% threshold helps determine whether a CHOICE Arrangement, formerly known as an ICHRA, is affordable coverage under the ACA so ALEs can avoid tax penalties. Employers will use their employees’ household income (or a safe harbor) and the lowest-cost silver plan on the local exchange to run the calculation. They must also subtract employees’ ICHRA contributions from the premium.

How do you calculate FTEs for ACA purposes?

For each month, count your full-time employees (those who average at least 30 work hours a week) and add the full-time equivalent represented by your non-full-time employees. To calculate non-full-time FTEs, add their monthly work hours, limit each employee to 120 hours, and divide the total by 120. Then average the monthly totals over 12 months and round the result down to the nearest whole number.

How many FTEs make an organization an ALE?

An employer is generally an ALE if it averaged at least 50 full-time employees, including FTEs, during the previous calendar year.

Do part-time employees count toward the 50-employee ACA threshold?

Yes. Although they don’t work on a full-time basis, you must combine the hours your part-time employees work with those of your full-time employees to determine whether the total reaches the 50-employee ALE threshold.

Do seasonal employees count when calculating ALE status?

Yes, you must include seasonal employees in the calculation, unless you qualify for the seasonal worker exception. To qualify, your workforce must exceed 50 full-time employees (including FTEs) for no more than 120 days during the calendar year, and the employees above the 50-employee threshold during that period are seasonal workers.

What happens if my company becomes an ALE?

If your organization becomes an ALE, it becomes subject to the ACA's employer shared responsibility provisions. This means the employer must offer affordable, minimum-value coverage to at least 95% of its full-time employees and their dependents, or it may owe one of the two employer shared responsibility payments, which can be very costly.

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