ACA 101: Selling Under-65 Health Insurance

If you want to expand into the under-65 health insurance market, where do you start? We’re covering the ins and outs of the Affordable Care Act and selling under-65 health plans!

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The American Rescue Plan Act of 2021 recently expanded the Affordable Care Act, improving health insurance affordability to those younger than 65 across the board. There’s no better time to enter the under-65 individual health market than now, so we’re giving all the info you need to know to get started!

What Is the Affordable Care Act (ACA)?

The Affordable Care Act (ACA) is a federal law, signed in 2010, that reformed America’s health care and insurance landscape. Formally known as the “Patient Protection and Affordable Care Act” and colloquially called “Obamacare,” the ACA includes several key provisions that gave 20 million Americans access to affordable health insurance coverage.

Key provisions:

  • The creation of health insurance marketplaces, or exchanges
  • The individual mandate — which required every American to have health insurance or pay a tax penalty
  • People with pre-existing conditions cannot be denied coverage or charged more for it
  • Children can stay on a parent’s plan until they turn 26 years old
  • Preventative care at no additional cost
  • Subsidies, or tax credits, for qualifying individuals/families purchasing through the marketplace
  • The expansion of Medicaid for low-income adults up to 138 percent of the Federal Poverty Level

The individual mandate penalty was repealed at the federal level in 2019. A select number of states have since implemented their own health insurance individual mandates and penalties. These include California, the District of Columbia, Massachusetts, New Jersey, and Rhode Island. Vermont has their own individual mandate, but they do not have a penalty associated with it.

Why Is Selling Under-65 Health Plans Suddenly a Great Opportunity?

A few years ago, things were looking a little bleak in the ACA market. Several carriers left the marketplace or state exchanges, and the ones who stayed cut commissions for agents and brokers selling these plans. But, a lot has changed since then. Now, the future of this market is looking exceptionally bright for everyone: carriers, agents, brokers, and consumers!

ACA Commissions Are Back, and They’re High!

Carriers are once again offering commissions, and they’re pretty great. Just like with Medicare Advantage, Medicare Supplement, and prescription drug plan sales, agents can earn new/initial commissions (first year) and renewal commissions (second year and beyond). Unlike in Medicare sales, these commissions are per member, per month!

Unlike in Medicare sales, these commissions are per member, per month!

For example, one carrier offers $19 initial and $16 renewal commissions in several states. Let’s say you help enroll four family members in this plan. You’d earn an initial commission of $76 per month for the first year, which is a total of $912! In year two and beyond, you’d receive $64 in renewal commission each month, which brings your yearly total to $768. And, these amounts are just what you could earn for writing one household!

More People Are Eligible for ACA Subsidies

The American Rescue Plan Act of 2021 just expanded federal health insurance subsidy access for millions of Americans. Before, households just above 400 percent of the Federal Poverty line (the limit for subsidy eligibility) made too much to qualify for an ACA health subsidy. Thanks to the 2021 Act, the income cap is now at 8.5 percent, instead of 9.5 percent, allowing more households to qualify for financial assistance!

May Only Require One Certification (at No Cost!)

If you sell Medicare Advantage and Part D prescription drug plans, you’ll be familiar with AHIP (a federal requirement) and carrier certifications. In order to sell under-65 health plans, insurance agents must also complete a federal certification — the Federally Facilitated Marketplace (FFM) certification. Carrier certifications aren’t required. FFM certification is also completely free, unlike AHIP!

Agents and brokers new to the ACA marketplace must complete the full individual marketplace training. Those who are returning to the marketplace are eligible to take a shorter training with optional review modules. Anyone wishing to proceed with FFM training requirements can find and complete them on the Centers for Medicare & Medicaid Services’ Marketplace Learning Management System (MLMS) or through a vendor approved by the Centers for Medicare & Medicaid Services (CMS).

Steps for Completing the FFM Certification:

  1. Create an account on the CMS Enterprise Portal. (Returning agents/brokers can log in to their current account and proceed to step 4.)
  2. Navigate to the FFM Training for Agents/Brokers/Assisters.
  3. Confirm your identity.
  4. Click on the “Complete Agent Broker Training” link on the Agent Broker Registration Status page in the portal.
  5. Complete the training and exams (vendor or CMS training through MLMS).
  6. Sign the CMS Privacy and Security Agreements.

You can learn more about these steps here. Once you have completed this training, you should be good to start selling ACA health plans!

Note: Select states may require additional certification training. For more info, please contact Quick Insured Brokerage, one of the Ritter Insurance Marketing Family of Companies, at 330-722-7070.

ACA Plans Will Work Nicely with Your Current Insurance Portfolio

If you’re already selling other insurance products, like Medicare plans, why not add under-65 health plans to your portfolio? You likely work with clients who are under 65 or who have spouses or kids who are under 65 who need health insurance help. When you add ACA health plans to offerings, you can better serve your current clients and any referrals that come your way while growing your commissions! Plus, your under-65 clients will eventually become leads for your Medicare business or the other products you sell!

CMS Is Adopting Rules to Lower Costs for ACA Plans

Recently, CMS announced they’re adopting rules to lower out-of-pocket costs, increase competition, and improve shoppers’ experiences with buying ACA health plans. For the 2022 plan year, you and your clients can expect to see maximum out-of-pocket costs $400 lower than what CMS proposed in November 2020.

You can read more about this exciting change in CMS’ Notice of Benefit and Payment Parameters for 2022 Final Rule Part Two Fact Sheet.

Understanding the ACA Marketplace & Exchanges

If you’re going to start selling under-65 health plans, you need to know about the ACA marketplace and exchanges. Keep reading for the details!

What Is the ACA Marketplace?

The ACA marketplace, also known as the federal health insurance marketplace or exchange, is a website where Americans can go to buy under-65 health insurance plans. This website is HealthCare.gov.

Some states have their own marketplace websites, or exchanges.

On-Exchange vs. Off-Exchange Plans

ACA health plans are available on the exchange (on-exchange) or off the exchange (off-exchange). Plans available on the exchange include those bought through HealthCare.gov (the federal marketplace), those bought on a state’s exchange website, or those bought through an approved exchange enrollment platform, like HealthSherpa. Off-exchange plans are those bought directly from the carrier.

On-exchange plans must provide essential health benefits and follow specific guidelines set by the ACA. Only on-exchange plans can accept ACA subsidies! Off-exchange plans usually offer most, if not all, the essential health benefits as their on-exchange counterparts. However, individuals cannot use an ACA subsidy to buy an off-exchange plan. Only on-exchange plans can accept ACA subsidies!

The Open Enrollment Period & New SEPs

Every year, people can shop for and enroll in new under-65 health plans on the marketplace during the Open Enrollment Period (OEP), which runs from November 1 to December 15, or during a Special Enrollment Period (SEP).

Your client may have an SEP if they’ve recently experienced any of the following:

  • Job loss
  • Moving to a new zip code
  • New child or death in the family
  • Coverage loss
  • Marriage/divorce
  • Citizenship status change
  • Government error
  • Change in subsidy eligibility
  • Qualifying federal reason

For 2022, a couple new Special Enrollment Period opportunities will be available to your clients. There will be one for individuals who did not receive timely notice about a qualifying event and another for those who lose employer contributions or government subsidies for continued employer health coverage under COBRA.

To take advantage of an SEP, you and your clients must act within 60 days of the qualifying life event. Currently, there’s a federal SEP in place for everyone in the U.S. to buy or switch marketplace plans. This SEP started February 15, 2021, and runs through August 15, 2021.

ACA Subsidies & Their Eligibility Requirements

Today, more Americans are eligible for ACA subsidies than ever before, thanks to the American Rescue Plan Act of 2021. What are ACA subsidies and how do people qualify for them?

ACA subsidies are an Advanced Premium Tax Credit designed to help lower-income and middle-income individuals and families afford health insurance. To qualify, someone must meet the following criteria:

  • Income is between 100 percent to 400 percent of the Federal Poverty Level
  • Buying health plan through the marketplace or exchange
  • Does not have “affordable” employer-sponsored coverage available to select*

*To be considered “affordable,” the health plan must provide at least 60 percent of covered benefits or have premiums that would cost the member no more than 8.5 percent of their annual household income after tax credits.

2021 Income Levels for Federal Poverty Levels
Family Size 100% FPL 150% FPL 200% FPL 250% FPL 400% FPL
1 $12,760 $19,140 $25,520 $31,900 $51,040
2 $17,240 $25,860 $34,480 $43,100 $68,960
3 $21,720 $32,580 $43,440 $54,300 $86,880
4 $26,200 $39,300 $52,400 $65,500 $104,800
Each additional $4,480 $6,720 $8,960 $11,200 $17,920

Before the American Rescue Plan Act of 2021, households barely above 400 percent of the FPL made just enough money to be ineligible for the Advanced Premium Tax Credit. Now that maximum net premium is capped at 8.5 percent for the next two years, these clients have access to subsidies.

Estimated Premium Subsidy Changes for Single Adults at 401% FPL ($51,649)
Age Full Price Premium % Income Gap Max Net Premium Premium Savings Per Month
26 $362 8.5% $362 $0
40 $452 8.5% $362 $90
50 $632 8.5% $362 $270
64 $1,061 8.5% $362 $699

When helping your client apply for a plan, you’ll work together to estimate how much income they think they’ll have for the year. Then, they’ll receive a subsidy based on that income estimate, as well as additional factors. When your client files their taxes at the end of the year, they may have to pay back some or all of the subsidy if they earned over their estimated income for the year. Alternatively, if they made less than their original estimate, they should get a refund of any additional portion of the subsidy they may qualify for.

Note: Individuals who fall below 138 percent of the FPL (or their state’s designated limit) should qualify for free-or-low-cost health insurance through Medicaid.

Bronze, Silver, Gold, Platinum ACA Metal Levels Explained

Under-65 marketplace plans are categorized into four metal tiers: Bronze, Silver, Gold, and Platinum. Basically, these tiers can tell you and your clients how covered medical costs are shared between the policy and the policyholder (but not the level of care or the plan’s covered services).

These tiers can tell you and your clients how covered medical costs are shared between the policy and the policyholder.

The Metal Tiers for ACA Health Plans
  Bronze Silver Gold Platinum
% of Covered Medical Costs Paid by the Policy 60% 70% 80% 90%
% of Covered Medical Costs Paid by the Policyholder 40% 30% 20% 10%
Monthly Premium Comparative Cost Lowest Moderate High Highest
Unsubsidized Annual Deductible Comparative Cost Highest Moderate Low Lowest
Eligible to Apply a Cost-Sharing Reduction? No Yes No No
Eligible to Apply a Premium Tax Credit? Yes Yes Yes Yes

As you can see from the table, as the metal tiers go up, the member’s coinsurance responsibility goes down while the plan’s coinsurance responsibility goes up. The most prevalent tier in the marketplace is the Silver one because that’s where the cost-share reduction comes into play based on the income level. It’s the most aggressive plan for your client if they qualify for a subsidy.

The Agent Advantage

You may know that navigators are also available to help individuals find and enroll in on-exchange plans. However, there’s a big difference between navigators and agents or brokers like you: Navigators cannot recommend one plan over another.

Health insurance marketplace navigators cannot recommend one plan over another — but you can!

You can help your clients understand the best plans for them based on their needs. By getting involved in this market, you’re looking out for the best interest of your clients, and yours as well! Under-65 sales can increase your bottom line and keep your book of business booming for years to come!

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The ACA health market has seen a lot of changes within the past few years, especially this past one. Here at Ritter, we’re embracing the amazing sales opportunities that the ACA and American Rescue Plan Act present. We’ve jumped back into the marketplace, and we hope you’ll join us in selling under-65 plans!

Interested in learning more about Ritter’s under-65 health contracting opportunities? Send us a message.

Editor’s Note: A special thanks to our friends at Quick Insured Brokerage, one of the Ritter Insurance Marketing Family of Companies, for their assistance with this informational post!

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