When people go to the Health Insurance Marketplace after the first of October to purchase their health insurance, they’re going to see plans categorized by different metal levels. And these are going to be referred to as tiers. And essentially, each metal level is anticipated to cover a certain percentage of that person or family’s major medical expenses during the course of the year.

Bronze is the lowest of the metal levels, and that’s anticipated to cover 60 percent. Silver would be 70 percent; Gold, 80; and Platinum, 90. Now not all companies are going to offer all metal levels. But all of the metal level plans in that marketplace are going to be required to cover essential health benefits. Things like outpatient services, prescription drugs, surgical care, hospital stays. All plans are going to be required to provide that coverage.

So when someone’s shopping, they’ll need to be very honest with themselves as far as what they anticipate needing during the course of the year and what they’re willing to pay. As with all things, when you ask a company to do more for you, you’re likely going to pay them more to do so. So you’ll need to also decide, “How comfortable am I with this level of payment? How comfortable am I taking on this additional risk with a lower cost plan?” But you know that you will have access to those essential benefits on any plan that you take.

Now in addition to that, there may be a opportunity for some people to take what will be called Catastrophic coverage. A Catastrophic plan will still provide those essential health benefits. But these are going to be lower cost plans because the insured individual or family is taking on quite a bit more financial risk. So people really want to be sure that they’re not just taking the cheapest plan to take the cheapest plan or it may cost them more money than it saves them.

For example, if you have two different situations. Let’s say an individual has a child who has issues with allergies, requires testing, regular medications. That’s an instance where you may be willing to pay more for a higher metal tier of coverage to make sure that your cost-sharing is lower. It’s taking less out of your pocket each time you fill that prescription, each time you bring your child into the pediatric office for that test.

Conversely, you may be a relatively young, healthy, athletic individual. If you’re a single person, you probably aren’t in line for a lot of major medical needs over the course of the year. So if I’m a young guy and the worst thing I’ve got to worry about is a sprained ankle, maybe I’m going to get a sinus infection once or twice a year. I’m probably going to look at more of a Bronze or Silver level plan to save more money on the coverage because I don’t anticipate needing a lot.

The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. The federal government continues to issue guidance on how the provisions of national health reform should be interpreted and applied. The impact of these reforms on individual situations may vary. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. As required by US Treasury Regulations, we also inform you that any tax information contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code.