What is the benchmark Silver plan?

What is the benchmark Silver plan?

The benchmark Silver plan is the “second-lowest-cost silver plan” available in your area. Most of the time, it’s a single plan. However, in some cases, such as when your dependent child has moved away to another rating area for school, the Marketplace will combine multiple plans to create a benchmark.

The IRS uses your household’s benchmark Silver plan to calculate your premium tax credit.

The premium tax credit is a tax credit that offsets your annual health insurance premiums. It’s a way for the government to pay for some or all of your private health insurance costs. 

The premium tax credit caps your household’s annual out-of-pocket health insurance costs as a percentage of your income. Since you have many health insurance plan options available in your state’s Marketplace, the IRS must pick one of them to “benchmark” against your income. The law requires the IRS to use your household’s benchmark Silver plan.

Your 1095-A lists your household’s benchmark Silver plan(s).

Each year, the Marketplace generates a “Health Insurance Marketplace Statement” called a 1095-A for you to use when you file your tax return. The Marketplace also sends a copy to the IRS. Think of the 1095-A as a special kind of W-2 or 1099. It’s a way for the Marketplace to report information about your health insurance plan and any premium tax credits you receive to the IRS for tax purposes.

Your 1095-A will include personal identification information for you and everyone covered on your health insurance plan. It also lists the information the IRS needs to reconcile your premium tax credit, including the:

  • Monthly premiums for the health insurance plan you enrolled in
  • Monthly premiums for the second-lowest-cost silver plan (i.e., the “benchmark plan”).
  • Monthly premium tax credits you received in advance

Continue reading

Find, use, and manage your own health insurance with LegUp Health