CACs Premium Tax Credits and Cost-Sharing Reductions 2 — Questions and Answers
Question 1: What is a Cost-Sharing Reduction (CSR)?
- A federal subsidy that reduces monthly premiums
- A subsidy that lowers out-of-pocket costs like deductibles and copays for eligible consumers (Correct answer)
- A discount on dental and vision coverage
- A tax credit applied after treatment
Correct answer: A subsidy that lowers out-of-pocket costs like deductibles and copays for eligible consumers
Cost-Sharing Reductions lower a consumer's out-of-pocket costs — such as deductibles, copays, and coinsurance — when they use health services.
Question 2: To receive Cost-Sharing Reductions, which type of Marketplace plan must a consumer enroll in?
- Any Marketplace metal-tier plan
- A Silver plan only (Correct answer)
- A Platinum plan only
- A Catastrophic plan
Correct answer: A Silver plan only
CSRs are only available on Silver-tier Marketplace plans; consumers must choose a Silver plan to access this benefit.
Question 3: What household income level generally qualifies a consumer for Cost-Sharing Reductions?
- Up to 250% of the Federal Poverty Level (Correct answer)
- Above 400% of the Federal Poverty Level
- Any income level
- Exactly at 100% of the FPL
Correct answer: Up to 250% of the Federal Poverty Level
CSRs are available to consumers with household income at or below 250% of the Federal Poverty Level who enroll in a Silver plan.
Question 4: How do CSRs affect the actuarial value of a Silver plan for eligible consumers?
- They reduce it to Bronze-level coverage
- They increase it, potentially making it equivalent to Gold or Platinum coverage (Correct answer)
- They have no effect on plan value
- They only apply to preventive services
Correct answer: They increase it, potentially making it equivalent to Gold or Platinum coverage
CSRs effectively increase the actuarial value of a Silver plan, meaning the plan pays a higher share of covered costs for eligible enrollees.
Question 5: A consumer is eligible for both APTC and CSR. What should a CAC advise regarding plan selection?
- Enroll in a Gold plan to maximize savings
- Enroll in a Silver plan to receive both premium savings and reduced cost-sharing (Correct answer)
- Enroll in a Bronze plan since it has the lowest premium
- Opt out of APTC to preserve CSR eligibility
Correct answer: Enroll in a Silver plan to receive both premium savings and reduced cost-sharing
Enrolling in a Silver plan allows the consumer to receive both the premium reduction from APTC and the out-of-pocket savings from CSRs.
Question 6: Which of the following consumers would NOT qualify for Cost-Sharing Reductions?
- A family of four with income at 200% FPL enrolled in a Silver plan
- A single adult at 150% FPL enrolled in a Silver plan
- An individual at 300% FPL enrolled in a Silver plan (Correct answer)
- A couple at 240% FPL enrolled in a Silver plan
Correct answer: An individual at 300% FPL enrolled in a Silver plan
A consumer with income at 300% FPL exceeds the 250% FPL threshold for CSR eligibility, so they would not qualify for Cost-Sharing Reductions.
CACs Premium Tax Credits and Cost-Sharing Reductions 2
What is a Cost-Sharing Reduction (CSR)?