All plans sold to individuals and small businesses on the ACA Marketplace after January 1, 2014 must meet federal standards for the adequacy and affordability of coverage. These standards are not applicable to all plans sold off the Marketplace. For more information on these off-Marketplace plans, see here. The federal rules establish minimum standards for benefits and cost-sharing, limit the factors that insurance companies can use to set premiums, and require plan benefits to be more standardized so that it’s easier for consumers to make comparisons among plans. (See Resources, ACA Consumer Protections for Private Coverage for a chart outlining how rules apply to different insurance markets and types of coverage.)
However, states can establish stronger consumer protections.
Every insurance company selling plans that must comply with the ACA, including Marketplace plans and group health plans, must provide consumers with a Summary of Benefits and Coverage, which will use a standard format to outline the benefits, cost-sharing and coverage limits of plans. Consumers can also obtain a uniform glossary of commonly used terms. The Summary of Benefits and Coverage must be made available to consumers at open enrollment, upon enrollment of coverage, upon request, and whenever there is a significant change in the plan. The Summary of Benefits and Coverage helps consumers understand the benefits and costs of a plan and makes plan comparisons easier. It must also include notice of whether or not the plan meets minimum essential coverage.
Health plans sold to individuals and small businesses, including all plans sold through a health insurance Marketplace and some plans sold off the Marketplace, must meet the following requirements:
- o Minimum essential benefit standard. Insurers are required to cover a minimum set of benefits within at least the following 10 categories: ambulatory patient services, emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.
- o Access to key services. Health plans must cover recommended preventive care at no cost-sharing (co-payments, coinsurance and deductible); allow individuals to designate any participating pediatrician to be their child’s primary care doctor; and use emergency services without prior authorization or higher cost-sharing for out-of-network emergency room care.
- o Prohibition on discrimination based on health status. Health plans are not allowed to refuse applicants on the basis of their health status.
- o Prohibition on pre-existing condition exclusions. Health plans are not allowed to exclude pre-existing conditions from covered benefits under the plan.
- o Minimum level of coverage. Individual coverage must provide a minimum level of financial protection for health costs, at least 60 percent of total average costs for covered benefits. Further, the Affordable Care Act requires plans to be offered at specified coverage levels, so that individuals can more easily compare them. The lowest level of coverage (60 percent) is called the bronze level. A silver level plan will cover, on average, 70 percent of total costs for covered benefits, a gold plan covers 80 percent, and a platinum plan covers 90 percent. Individuals under age 30 or who cannot find “affordable” coverage are eligible to purchase catastrophic coverage.
- o Modified community rating. Health plans are not allowed to charge higher premiums based on the health status or claims experience of an individual. However, insurers may charge more based on age (up to three times more for older individuals) or if you use tobacco products. Premiums can also vary by geography.
- o Prohibition on annual and lifetime limits. Health plans are not allowed to impose annual or lifetime dollar limits on benefits.
- o Limits on out-of-pocket costs. Health plans must limit out-of-pocket costs for essential health benefits to no more than $9,450 for an individual or $18,900 for a family in 2024 (this amount will grow each year to track increases in medical costs). Depending on household income, the limits may be lower for individuals and families that qualify for cost-sharing reductions in a health insurance Marketplace.
- o Covers young adults up to age 26. Health plans must allow families to keep their adult children on the family plan, up to age 26. This applies even if the child isn’t a student, doesn’t live at home, or is not financially dependent on his or her parents.
- o Sufficient access to providers. In addition to the above rules, plans offered in a health insurance Marketplace must also meet federal standards for network adequacy, ensuring access to primary care doctors, specialists, and “essential community providers,” such as community health clinics, without unreasonable delay.
NOTE: These consumer protections generally only apply to plans that must comply with the ACA, including plans sold through the health insurance Marketplace. If you are looking to purchase a plan outside of the health insurance Marketplace, you might not receive any of these protections. You can find more information here.