PAGE 8
A health insurance exchange is a web portal where individuals and businesses can shop for
and buy health insurance. There will be two types of exchanges throughout the U.S. that will
impact employee benefts:
1 | Public exchanges facilitated by the state and/or federal government
2 | Private exchanges facilitated by private industry stakeholders (insurance providers,
brokers or benefts consultants).
Exchanges facilitated by the state and/or federal government are expected to provide an
online marketplace for individuals and small employers.
6
These exchanges will be open for:
• Individuals without access to
affordable
* employer-provided health insurance coverage
• Small businesses with fewer than 100 full-time employees
In 2017, state-based exchanges may make provision for businesses with more than 100 full-
time employees to purchase employee benefts plans through public health care exchanges.
* Employer-provided coverage in which the employee’s required contribution does not exceed 9.5% of their annual
income.
4
Unlike the public exchange, private exchanges have more fexibility, because they are not
associated with federal guidelines from the ACA and the Department of Health and Human
Services (HHS). Private exchanges will offer health coverage options to multiple workforce
segments and sizes. Additionally, private exchanges
can sell all products and services, including voluntary
insurance, unlike public exchanges, which can only offer
medical and dental insurance. Many of these exchanges
help employers to move toward a defned contribution
model that can help better control health care costs,
while still offering employees robust benefts options
through defned contribution.
7
Only public exchanges assess and determine an individual or small business’s eligibility for a
premium tax credit to help off-set the cost of coverage and defray some costs associated with
using health care services.
5
Therefore, subsides and credits may not be available to individuals
and employers purchasing coverage through a private exchange.
Tax Credits and Penalties
Individual credits:
Individuals with household incomes between 100% and 400%
of the federal poverty level are eligible for tax subsidies if they are not eligible for
affordable employer-provided coverage.
8
Important Fact 1:
An exchange is a
web portal to buy
and sell benefts.
Important Fact 2:
Public exchanges
will be open for
small businesses
and individuals
to enroll on
October 1, 2013
for coverage to
go into efect
January 1, 2014.
Important Fact 3:
Private exchanges
generally provide
cost-controlling
options for
businesses of all
sizes.
88
%
of employers say they
will continue to ofer
health benefts to active
employees in 2014.
4
Important Fact 4:
Tax subsidies are
only available
through public
exchange.