If you’ve compared plans on the individual Health Insurance Marketplace before, you may have been surprised to find that a silver-tier plan sometimes costs as much or more than a gold one. While this might seem like an error at first, it’s actually due to a pricing strategy known as silver loading.
Whether you’re a broker consultant helping clients, an employer choosing a health benefit, or an individual shopping for coverage, understanding silver loading is vital to making cost-effective health plan decisions. And with recent legislative changes impacting the market, it’s more important than ever to know how the silver loading process currently works so you can prepare for future changes.
This article explains silver loading, including how it affects plan costs across the Affordable Care Act (ACA) marketplaces. We’ll also discuss how employers can help employees keep their premium costs down with an individual coverage health reimbursement arrangement (ICHRA).
In this blog post, you’ll learn:
- What silver loading is and why it creates pricing oddities across metal tiers.
- How premium tax credits and cost-sharing reductions work together, and how recent policy changes implemented by the Trump administration may impact coverage costs.
- How an ICHRA can help employers offer flexible, tax-free health benefits that ensure employees can access affordable coverage.
Wondering how to give employees affordable and quality health coverage? Read our blog to find out.
What is silver loading in health insurance?
First, let’s discuss silver-level plans. The four metal tiers on ACA marketplaces, from lowest to highest premiums, are bronze, silver, gold, and platinum. The silver plan has an average actuarial value of 70%, meaning enrolled participants will pay 30% of their covered healthcare costs. Silver plans are popular on the individual market because they have moderate monthly premiums and out-of-pocket expenses in exchange for comprehensive coverage.
Another reason consumers seek out silver plans is because they’re the only metal tier that offers cost-sharing reductions (CSRs). These reductions lower out-of-pocket costs like annual deductibles, coinsurance, and copays for qualifying individuals with an annual income scale between 100% and 250% of the federal poverty level (FPL).
While this all seems like good news for consumers, it comes with a catch. Previously, the federal government reimbursed insurers for CSRs. But since 2017, insurers have offset the cost of CSRs by increasing silver plan premiums through a process called silver loading1.
Essentially, insurers “load” the cost of CSR losses into silver premiums sold on public exchange markets. Silver plan rates are often disproportionately higher than other metal tiers on the public exchanges due to the inclusion of CSR costs.
The federal government further solidified the practice of silver loading in January 2025 with the 2026 Notice of Benefit and Payment Parameters2. Insurers can use silver loading as long as state regulators allow it and the insurer receives no reimbursements for CSRs.
How do premium tax credits help lower rates for silver-loaded health plans?
In addition to CSRs, lower-income individuals can get subsidized health insurance coverage if they qualify for premium tax credits. Consumers can receive tax credits on their income tax return or advanced credits to help them pay their monthly premiums throughout the year.
Previously, consumers with annual incomes between 100% and 400% of the FPL could qualify for tax credits to buy coverage on the individual market. But, the government expanded these tax credits under the American Rescue Plan Act of 2021 and the Inflation Reduction Act of 2022.
Anyone shopping for a health plan on a public exchange won’t pay more than 8.5% of their annual household income for the benchmark silver plan through the end of 2025. However, Congress has signaled that these expanded subsidies will likely expire at the end of 2025. This would reinstate the former rule on eligibility based on the FPL.
Premium tax credits are only available for plans sold on a public exchange, such as the federal Health Insurance Marketplace or a state-based exchange. Individuals can buy an ACA-compliant plan off-exchange, like directly from an insurance carrier or broker, but they won’t be eligible for the subsidy.
The elimination of these enhanced tax credits would increase the net cost of premiums for consumers who qualify for tax credits on a public exchange. Additionally, if people leave the individual market due to APTC disappearing, premiums may increase for everyone as the risk pool grows unhealthier.
For those who qualify, premium tax credits help make silver plans more affordable to consumers despite silver loading.
How does silver loading affect health insurance costs?
Silver loading doesn’t impact the prices of the other metal tiers. But those shopping on public exchanges will pay higher premiums for silver plans to account for CSRs.
Additionally, premium tax credit calculations use the cost of the benchmark silver plan. This means silver loading can increase the value of those credits. In some cases, inflated subsidies can help qualifying individuals pay for the premium of a lower-cost bronze plan entirely. Or, they may be able to pay for a higher-tier gold plan for significantly less than they would typically pay.
Unfortunately, silver loading also raises silver plan costs for people who don’t qualify for CSRs or tax credits. These individuals can shop for a bronze plan or a gold on-exchange policy to avoid paying an inflated silver plan premium.
Or, they can buy a plan similar to the silver tier policy off-exchange. Off-exchange plans can use pricing structures that are different from Marketplace plans, depending on health insurer, location, and other factors.
In 2018, CMS encouraged states to allow off-exchange plans that don’t include silver loading3. This makes many silver-level off-exchange plans more affordable than on-exchange plans for those ineligible for premium tax credits.
How does new legislation on premium tax credits and cost-sharing reductions impact health insurance costs?
The recent One Big Beautiful Bill Act (OBBBA), also known as H.R. 1, contained many health-related provisions4.
One of the most significant provisions that the Senate removed from the bill would’ve restored the federal government’s ability to reimburse insurers for CSRs directly. This would have eliminated the need for silver loading and lowered silver premiums sold on the exchange. Bronze, gold, and platinum premiums would’ve remained the same.
Had this provision passed, consumers who qualify for premium tax credits may have received a lower subsidy due to reduced silver premiums, as the tax credit eligibility and calculations use silver benchmark plan pricing. This likely would have led to some enrollees dropping coverage.
For now, there is no impact on CSRs and silver loading from any federal legislation.
Here are some recent changes that may impact individual insurance and rates:
- Starting in November 2026, the annual Open Enrollment Period dates to enroll in coverage will be shortened to November 1 through December 15 in all states.
- Effective January 1, 2026, individuals not enrolled in Medicaid because they didn’t meet community engagement requirements will no longer qualify for advance premium tax credits (APTCs) or CSRs.
- Effective January 1, 2026, individuals with incomes 100% under the FPL who are subject to the 5-year bar under Medicaid won’t be eligible for premium tax credits.
- Effective January 1, 2027, only a specific category of lawfully present immigrants will be eligible to receive premium subsidies.
- Effective January 2028, the Marketplaces must pre-verify applicants’ eligibility for APTCs and CSRs. They must review submitted documentation and verify income, immigration status, health coverage status, place of residence, and family size.
While these updates reduce federal spending, subsidy changes may increase health insurance costs for many individuals and families. For example, consumers may pay higher monthly premiums and choose cheaper plans with less coverage. They might also incur more out-of-pocket costs for annual deductibles, copayments, and coinsurance.
How can the ICHRA keep on- and off-exchange health insurance premiums low?
Regardless of silver loading or recent legislative changes, an ICHRA offers employers and employees an effective way to manage rising premiums and out-of-pocket costs.
With an ICHRA, employers can give employees tax-free dollars for their qualifying individual health plan premiums. Enrolled employees with an ICHRA can shop for policies on- or off-exchange, where they may find better metal level plan prices that meet their personal needs.
Here’s how it works:
- The employer decides how much tax-free monthly allowance to give employees to spend on individual health coverage. Offering a defined contribution amount helps financially protect business owners from shifts in the individual market and federal policy changes.
- The ICHRA has no annual contribution limits, so employers can choose the best amount for their budget and adjust their allowances at the end of the plan year based on employee usage and premium rates.
- Employees then select their preferred individual health plan. Shopping for off-exchange coverage can help employees avoid plans with silver loading factored in. They can also choose other metal levels to find a plan that best fits their needs and their ICHRA allowance.
- Remodel Health offers tools to help employees compare off-exchange plans and sign up for the best coverage.
- Once enrolled, employees pay their monthly premiums using the tax-free funds their employer provided. ICHRA payments are exempt from payroll taxes for employers and are income-tax-free for employees.
- Applicable large employers (ALEs) can use the ICHRA to satisfy the ACA employer mandate if their allowance meets the affordability requirements.
Many individuals may no longer qualify for financial help on public marketplaces if enhanced premium tax credits expire at the end of 2025. However, those who participate in an ICHRA aren’t eligible for subsidies. Instead, the employer’s ICHRA contribution can help employees afford health coverage.
If the ICHRA’s allowance is affordable, employees who qualify for tax credits should waive their subsidy and opt into the benefit. However, if the contribution amount is unaffordable, they can opt out of the benefit and continue receiving their credits. But if they opt out of the ICHRA and their allowance is affordable, they can’t collect their tax credits.
When employers offer an ICHRA, healthy individuals enter the ACA market. This helps stabilize the risk pool and keeps premiums lower. While premiums are expected to rise in 2026, the long-term trend is toward ICHRAs and cheaper individual rates than group coverage.
If you or your client is seeing double-digit rate increases with group coverage, switching to an ICHRA can still make financial sense for 2026.
Conclusion
With recent changes in federal policies and the likely expiration of enhanced premium tax credits, many consumers and employers anticipate significant changes in coverage costs and value. While these factors and many others impacting premium rates are beyond your control, ICHRAs are a flexible solution that can help you weather the storm.
If you want to plan for what’s next or simply adjust your benefits strategy, Remodel Health’s ICHRA+® solution is ready to help you stay compliant, control costs, and support your team. Book a call with us today, and we’ll guide you through designing a personalized health benefit that meets your needs and budget!
- KFF Policy Watch: CSRs and silver loading
- Federal Register: HHS Notice of Benefit and Payment Parameters for 2026
- CMS Insurance Standards Bulletin
- H.R.1 – One Big Beautiful Bill Act
Still have more questions about the ICHRA? Get our guide to learn everything you need to know.