Many questions may arise when selling health care plans for your clients under 65. We want you to have the knowledge you need to succeed in the individual health insurance market.
Listen to this article:Finding affordable health care coverage doesn’t have to be complicated for your clients who are not yet eligible for Medicare. Here, we’ve answered some of the most asked questions about Affordable Care Act (ACA) plans and exchanges.
What Does On- vs. Off-Exchange Mean?
ACA marketplace insurance plans can be purchased through an exchange or directly from a carrier. Plans bought through an exchange are known as on-exchange plans. Off-exchange plans are ACA plans that are available outside of the exchange and can be purchased directly from the carrier. Some states do not participate in the federal exchange, but have their own state exchange your clients can utilize for marketplace plans.
Exchanges help to organize “the health insurance marketplace to help consumers and small businesses shop for coverage in a way that permits easy comparison of available plan options based on price, benefits and services, and quality,” according to the Centers for Medicare & Medicaid Services.
Exchanges help to organize ’the health insurance marketplace to help consumers and small businesses shop for coverage in a way that permits easy comparison of available plan options based on price, benefits and services, and quality,’ according to CMS.
What Are the Differences Between On- and Off-Exchange Health Plans?
There are a few reasons why someone may want to purchase an under-65 health plan on-exchange vs. off-exchange. Some plans may cover more services, so it’s important to evaluate your clients’ needs to ensure that you find the right plan for them. Another benefit of choosing a health plan on the exchange is that it can be easy to compare and fully evaluate each plan. Plans are broken down into four metal categories: bronze, silver, gold, and platinum.
One of the reasons why an individual may choose to shop off the exchange is the wide variety of coverage and plan options. These plans tend to be more flexible. Individuals who do not qualify for tax subsidies may be attracted to these plans because they can be more affordable. Also, individuals may have a favorite doctor who does not accept any insurance plans that are on-exchange. Some may choose to pay out of pocket to continue to see their chosen providers.
One of the reasons why an individual may choose to shop off the exchange is the wide variety of coverage and plan options.
Are Both Types of Plans Regulated by the Government?
Yes, off-exchange individual major medical coverage is subject to the same Affordable Care Act regulation as on-exchange plans. Both on-exchange and off-exchange plans are required to cover 10 categories of health services:
- Ambulatory patient services (outpatient care, same-day surgeries, care received without being admitted to a hospital)
- Emergency services
- Pregnancy, maternity, and newborn care
- Mental health and substance use disorder services
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventative, wellness services, and chronic disease management
- Pediatric services (must include vision and dental care)
Policies sold off-exchange do not have to be certified as a Qualified Health Plan (QHP), but many companies offer certified QHP plans both on- and off-exchange. A QHP is licensed in the state where coverage is provided. The plan must cover pre-existing conditions, follow cost-sharing initiatives, prohibit annual and lifetime benefit limits, and cover the 10 essential health benefits.
The same Open Enrollment and Special Enrollment Periods and qualifications apply to both on- and off-exchange plans.
Can I Sell Both On- and Off-Exchange Plans?
Yes! Agents can sell both types of plans to their clients. Ritter offers plans through carriers who sell on- and off-exchange. For agents looking to sell off-exchange plans, FFM or state exchange certification is not always required. Ritter recommends that agents complete the certification so they can sell both on- and off-exchange plans! Contact your sales specialist to learn more about the under-65 plans we provide.
Do I Earn the Same Commissions for Helping Clients Find a Plan On- and Off-Exchange?
Regardless of which under-65 plan you and your client choose, you will earn commissions. On- exchange and off-exchange plans may pay at different rates. Review the commission schedules by each carrier to confirm the rates.
Are Clients Eligible for ACA Subsidies If They Purchase Off the Exchange?
No, subsidies or tax credits are only available for plans purchased on the exchange. If subsidies enable your client to purchase affordable health care, recommend they purchase a plan on the exchange.
A few years ago, the Department of Health and Human Services (HHS) estimated that there were 2.5 million Americans enrolled in off-exchange coverage who would have been eligible for subsidies if they switched to the exchange instead. Often, clients elect off-exchange coverage for reasons other than cost, but it’s also likely that they don’t realize how much less they’d be paying for health care coverage through the exchange. With the introduction of the American Rescue Plan (ARP), more individuals are eligible for a premium tax credit. Ensure that your client qualifies for these subsidies before enrolling them; they could qualify for more savings than you anticipate!
Often, clients elect off-exchange coverage for reasons other than cost, but it’s also likely that they don’t realize how much less they’d be paying for health care coverage through the exchange.
How Can I Find Out if My Clients Qualify for a Subsidy?
To find out if a client is eligible for a premium tax credit, read more about the income eligibility requirements from the IRS. By understanding the savings that are possible with the ACA, you can guide your client along the plan choices that may be best for them, their budget, and their needs.
What Is Enhanced Direct Enrollment?
Enhanced Direct Enrollment (EDE) is a service that allows individuals to enroll in on-exchange coverage without visiting the federal exchange site, HealthCare.gov. Approved entities (like HealthSherpa) build and host a version of the HealthCare.gov eligibility application directly on their platform. This application is securely integrated on the backend to support the enrollment and post-enrollment follow-up items. Even though the consumer does not visit the federal marketplace website, they are still able to utilize all benefits and savings that come along with purchasing health care through the exchange.
HealthSherpa is a certified enrollment partner of Healthcare.gov. According to HealthSherpa, using EDE with HealthSherpa can reduce clients’ application time by 24 minutes and boost client conversions by 52 percent! Register with Ritter to receive a FREE HealthSherpa account!
What Are the Metal Tiers?
The four metal tiers are the categories of plans that are offered in the marketplace. These categories describe the different coverages that are included in each plan.
- Bronze: These plans cover 60 percent of medical costs. These plans have the lowest monthly premium but have the highest costs when you need medical care. Bronze plans are best for those who don’t get sick often but like to have protection in case of an emergency.
- Silver: Covers 70 percent of medical costs and has a moderate monthly premium. The deductible for these plans is typically lower than those of Bronze plans.
- Gold: These plans cover 80 percent of expenses and are a good choice if you are willing to have more costs covered with a higher premium. If you frequently use medical services, a Gold plan could be an excellent choice.
- Platinum: The highest level of coverage available with an ACA plan. Platinum plans typically cover about 90 percent of medical costs, leaving you responsible for the remaining 10 percent. These plans will have higher premiums than the other metal tiers.
Note: If you qualify for cost-sharing reductions, you must select a Silver plan to get extra savings.
What Are ‘Excepted Benefits’ Under the ACA?
There are many excepted benefit plans that are sold outside of the exchange. These plans are exempt from ACA regulations because they cover services in one or more categories below. Additionally, they do not have to cover the same essential health benefits that ACA-compliant plans must cover. There are four categories of excepted benefits.
- Non-health coverage
- Limited health benefits
- Specific disease or illness coverage
- Supplemental health benefits
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The ACA market may be overwhelming at first, but we hope that with these answers, you can begin selling ACA coverage to your clients! If you still have more questions, please contact an under-65 sales specialist, and we’d be happy to assist you. We’re excited to see where your under-65 health insurance journey leads you!