With its ambiguous terms and alphabet soup of acronyms, you might think the health insurance industry’s goal is confusion instead of coverage. With the ACA asking some people to make important coverage decisions by checking out “markets” and “exchanges,” there’s been a whole new cause for confusion. When searching for health insurance options for you and your employees, you may be hearing the terms “individual market,” “on-exchange” and “off-exchange” and wondering what the heck they mean.
We break down a high level summary of the options:
In total, the individual market is made up of all individual plans, regardless of whether they're purchased on- or off-exchange.
Off-exchange plans can be purchased in a lot of different ways. You can go directly to a health insurance company (like Blue Cross Blue Shield, for example) or you can purchase these plans through a broker, like Gravie.
Here’s the key difference between on- and off-exchange plans:
- If you’re eligible for and want to use government tax credits to offset premium costs, you must apply through a government-run marketplace and choose an on-exchange plan.
Other differences to keep in mind:
- You’re applying for coverage directly through an insurance company when you choose an off-exchange plan, even if you’re purchasing it through a broker
- You apply for coverage through the state or federal government when you choose an on-exchange plan
- Not all health insurance companies offer on-exchange plans in the federal or state marketplaces, so you'll find more options when you shop through a company like Gravie who presents off-exchange plans in addition to on-exchange plans.
Is the coverage different?
With all this talk of differences, you may be asking how the plans are different in terms of coverage. The ACA mandates that all insurance plans cover the same set of essential health benefits.
The only variation in coverage depends on the plan category you choose. Plan categories (referred to as “metal categories” because they are divided into bronze, silver, gold, and platinum levels) are based on how you and your provider split the costs of your healthcare. They have nothing to do with quality of care.
When you and your employees use Gravie, we combine and present all of the on-exchange and off-exchange plan options so that our members get a clear picture of all their options and can choose the coverage that makes the most sense for them, regardless of where it’s purchased.