FACT SHEET
Why the Affordable Care Act Matters for
Women: Premium and Cost-Sharing
Assistance
OCTOBER 2015
Health insurance helps make health care services accessible to women and families, yet for
years the cost of coverage put it out of reach for many, especially those who did not receive
insurance through their employers. The Affordable Care Act (ACA) includes several
provisions that ease the financial burden of health insurance premiums and cost-sharing
obligations for moderate- and lower-income individuals, making coverage more affordable.
Premium Assistance
What are premium tax credits?
Premium tax credits are one type of financial assistance available under the ACA. These
tax credits help reduce the cost of premiums for eligible individuals and families who buy
their health plans in the health insurance marketplace.1 These credits act as a subsidy:
They pay a portion of an individual’s or a family’s monthly premium and thereby decrease
the monthly cost of the plan. Premium tax credits are financed by the federal government
and can either be paid directly to an insurer when an eligible individual enrolls in a plan, or
received by the individual at tax time when she/he files a yearly tax return.
Who is eligible for premium tax credits?
Individuals with incomes between 100 and 400 percent of the federal poverty level (FPL)
(up to $47,080 for an individual and $97,000 for a family of four2) may be eligible for
premium tax credits. In most cases, in order to receive these credits, individuals cannot be
eligible for public health care programs deemed to be minimum essential coverage, such as
Medicare, Medicaid or the Children’s Health Insurance Program (CHIP), nor can they have
access to adequate, affordable coverage through an employer. (“Adequate coverage” means
that the plan meets the minimum value standard of paying at least 60 percent of the cost of
services. “Affordable coverage” means that the amount of the premium paid for self-only
coverage is not more than 9.5 percent of household income.)
How much premium assistance is provided?
The amount of tax credit an individual can receive is based on the second-lowest-cost silver
plan offered in that person’s marketplace.3 If the cost of the premium for the second-lowestcost silver plan exceeds what the individual is expected to pay (which is a sliding scale
based on income), the government will subsidize the difference between the cost of the plan
and the individual’s expected contribution.4
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Premium tax credits are awarded based on income: Individuals with incomes close to 400
percent FPL will receive less premium assistance than individuals with incomes closer to
100 percent FPL. It is important to note that a change in financial or other circumstances
over the course of a year may result in changes in eligibility for premium assistance.
Enrollees should immediately report any changes in income level or other circumstances to
their marketplace. For more information see the IRS website.
Cost-Sharing Assistance
What is cost-sharing assistance?
A cost-sharing reduction is another type of financial assistance available under the ACA. It
lowers the amount that beneficiaries pay out-of-pocket – through copays, deductibles and
coinsurance – for covered, in-network care. People who are eligible for cost-sharing
assistance may also benefit from a maximum out-of-pocket limit. This means that the
amount they must pay in cost-sharing charges each year is capped. (Such cost-sharing
limits apply to in-network services only and are set on a yearly basis.)
Cost-sharing reductions are automatically applied to eligible beneficiaries’ plans and the
federal government submits payment directly to insurers. Thus, cost-sharing assistance is
seamless for eligible consumers: Individuals do not have to file for reimbursement.
Who is eligible for cost-sharing assistance?
Individuals or families with incomes between 100 and 250 percent FPL (up to $29,425 for
an individual and $60,625 for a family of four5) may be eligible for cost-sharing subsidies.
Eligible individuals or families must enroll in a silver-level plan to receive cost-sharing
subsidies.
How is cost-sharing assistance provided?
Similar to the premium tax credit, cost-sharing subsidies operate on a sliding scale – based
on an individual’s income – and are paid directly to the individual’s insurance provider each
month. Cost-sharing subsidies reduce the amount an individual must pay out-of-pocket for
covered health care services.
While Silver-level plans cover roughly 70 percent of cost of the plan’s covered benefits, costsharing assistance raises the plan’s actuarial value by covering a greater share of any outof-pocket costs associated with covered benefits. There are three levels of cost-sharing
reductions available to eligible individuals and families, depending on their income:
► 100–150 percent FPL – Actuarial value 94 percent
► 150–200 percent FPL – Actuarial value 87 percent
► 200–250 percent FPL – Actuarial value 73 percent6
It is important to note that a change in financial circumstances over the course of a year
may result in changes in eligibility for cost-sharing assistance. Depending on the
circumstances, an individual or family may become eligible for more or less generous costsharing assistance within a single year, or may become newly eligible or ineligible.
Individuals or families who have a change in eligibility during the year are not required to
repay or reconcile subsidies, and newly eligible consumers will not receive a refund on
NATIONAL PARTNERSHIP FOR WOMEN & FAMILIES | FACT SHEET | PREMIUM AND COST-SHARING ASSISTANCE
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previously paid cost-sharing amounts. Consumers should report any changes in income
level or other applicable circumstances to their local insurance marketplace.
How Can I Get More Information?
The website HealthCare.gov is a great, user-friendly resource for more information on the
health insurance marketplace, as well as important information on enrollment. Consumers can
also call a hotline, toll-free, at 1-800-318-2596. The hotline is operational 24 hours a day,
seven days a week.
1 See the National Partnership’s fact sheet about Understanding the Health Insurance Marketplace for more information.
2 Georgetown University Health Policy Institute. (2015). 2015 Federal Poverty Level Guidelines. Retrieved 15 August 2015, from: http://ccf.georgetown.edu/wpcontent/uploads/2015/01/2015-Federal-Poverty-Guidelines.pdf
3 Plans offered in health insurance marketplaces will be categorized as bronze, silver, gold or platinum and tiered based on their actuarial value (how much a plan will pay versus
how much a consumer will pay through various cost-sharing obligations). Silver-level plans have an actuarial value of roughly 70 percent, the third highest actuarial value of the
metal level plans.
4 The Henry J. Kaiser Family Foundation. (2014 October). Explaining Health Care Reform: Questions About Health Insurance Subsidies. Retrieved 15 August 2015, from:
http://kff.org/health-reform/issue-brief/explaining-health-care-reform-questions-about-health/
5 See note 2.
6 See note 4.
The National Partnership for Women & Families is a nonprofit, nonpartisan advocacy group dedicated to promoting fairness in the workplace, access to quality health care and
policies that help women and men meet the dual demands of work and family. More information is available at www.NationalPartnership.org.
© 2015 National Partnership for Women & Families. All rights reserved.
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