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Small Business Employee Benefits and HR Blog

FAQ: What are the Metallic Tiers of Coverage?

August 29, 2013
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tiers resized 600Beginning in 2014, the Affordable Care Act (ACA) requires health insurance plans in the individual and small group markets to provide insurance plans by four standard levels of coverage. These four levels are called "metallic tiers" of coverage, or "coverage tiers".

The metallic tiers are intended to help consumers compare plans "apples to apples". The levels include:

  • Bronze 
  • Silver 
  • Gold 
  • Platinum 

As the metal category increases in value, so does the percent of medical expenses that a health plan will cover. These percentages are called the actuarial value.

What is Actuarial Value?

The actuarial value of a plan is calculated as the total expected payments for essential benefits, divided by the total expected costs of the “standard population” for essential health benefits. In other words, it is the percentage of costs a health plan covers in relation to how much the enrollee is expected to pay.

For example, an enrollee in a silver plan, which has a 70% actuarial value, would be expected to pay 30% of expected medical expenses - such as deductibles, co-payments, and coinsurance. The remaining 70% would be paid by the insurance company.  

Because the measurement of an actuarial value is based on a standard population, the cost-sharing structure could vary from one plan to another. So, one plan might have a higher deductible, but a lower coinsurance to compensate for it to attain the desired actuarial value, while another may compensate for a high deductible by covering some doctor’s visit before the deductible is met.

The ultimate goal is to keep all enrollees of the same tiered plan paying the same out of pocket costs. But the way in which they pay this out of pocket amount will vary by plan, and the medical services each enrollee needs.

What are the Actuarial Values of Each Plan?

Bronze plan 60%

The bronze plan has an actuarial value of 60% meaning that individuals covered by a bronze plan will be required to pay 40% of their expected medical expenses via deductibles, co-payments, and coinsurance.

Silver plan 70%

The silver plan has an actuarial value of 70% meaning that individuals covered by a silver plan will be required to pay 30% of their expected medical expenses via deductibles, co-payments, and coinsurance.

Gold plan 80%

The gold plan has an actuarial value of 80% meaning that individuals covered by a gold plan will be required to pay 20% of their expected medical expenses via deductibles, co-payments, and coinsurance.

Platinum plan 90%

The platinum plan has an actuarial value of 90% meaning that individuals covered by a platinum plan will be required to pay 10% of their expected medical expenses via deductibles, co-payments, and coinsurance.

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