New Laws Marketplace exchanges

Difference between an on and off exchange plan?

The fundamental difference between an on exchange and off exchange health plan is where the applicant performs his or her enrollment. If the enrollment for the health plan is performed within a government-run marketplace for insurance, it is known as an on-exchange health plan. If the enrollment does not take place within the government-run marketplace for insurance, it is known as an off-exchange health plan. Both on and off-exchange health plans in the individual and small group markets must satisfy Essential Health Benefits coverage requirements and utilize one of the metal plan designs for medical out-of-pocket costs.

Common questions

The main reason someone should use an exchange for enrollment is if the person qualifies for a subsidy. Premium subsidies and cost-sharing reductions for low-income people can only be obtained within an exchange even if the same insurance plan is offered off exchange as well as on exchange.
No, not every health insurance company offers its health insurance products on every exchange. United Healthcare, for example, is the largest non-government health insurer in the U.S. but their health insurance products are not available on many exchanges. Exchanges also do not carry every health insurance product. Neither short-term health insurance nor large group health insurance are currently offered on exchanges. Stop loss policies serving companies that self-insure their employees’ healthcare costs are also unavailable from an exchange.
Exchange participation by insurers varies by state so there is no rule regarding exchanges and health insurance quality. Before enrolling in a health plan, you should confirm that quality doctors, hospitals, and other healthcare providers in your area are included within the health plan’s network.
Exchanges employ individuals and groups known as navigators to help you enroll in a health insurance plan. They can help explain what health plans are on the exchange but they are prohibited from telling you what health insurance plan in which you should enroll.
Not necessarily. An exchange may have additional regulations regarding how participating plans are configured that may lead to some differences between an on-exchange and off-exchange health plan. For example, an exchange could require plans to provide pediatric dental benefits directly through the plan as opposed to a stand-alone policy working in conjunction with the health plan. However, for both on-exchange and off-exchange health plans, the health plans must provide all the mandatory Essential Health Benefits. Moreover both on-exchange and off-exchange plans in the individual and small group markets may only vary premium rates based on four factors: family size (individual or family), geographic rating area, age (up to a 3:1 ratio for adults) and tobacco use (up to a ratio of 1.5:1).

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