State RegulationsNY specificDifficulty 1/5
Under the Affordable Care Act, what is the 'benchmark plan' on the individual exchange?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under the Affordable Care Act, the benchmark plan is the second-lowest-cost silver plan available in the enrollee's rating area. The premium tax credit is calculated by comparing the benchmark plan's price with what the eligible enrollee is expected to contribute toward it, so the benchmark anchors the subsidy amount even though the enrollee may buy a different plan. It is a measuring stick, not a mandatory choice.
Why the other options are wrong
- B) The benchmark is not simply the cheapest plan in the state; it is the second-lowest-cost silver plan in the local rating area.
- C) No plan is compulsory; the benchmark is only the reference used to compute the subsidy.
- D) Platinum plans and premium caps are unrelated; the benchmark is a silver-level reference plan.
Memory hook
Benchmark = second-cheapest silver in town; it prices your subsidy.