Question: Most of the resources and write-ups regarding the workings of the exchanges and subsidies seem to indicate that the premium subsidies will be based on the “silver” level plan. More specifically, if someone chooses the silver level plan, and if the income is below the 400% FPL cut off, they are eligible for a subsidy which is based on a fixed percentage of income outlay towards premiums and also some cost sharing. What happens if the same person chooses a HSA eligible HDHP plan instead, which is (presumably) less expensive than the silver level plan. Would this just cause the subsidy to be correspondingly reduced resulting in no additional net savings to the consumer? How do the silver level plans relate to the HSA eligible HDHP plans.

Answer: Yes. The subsidy amount is based on the premium for a Silver level plan, but the consumer may use their subsidy to select a plan from any other level. For example, the let’s say the consumer cost is $200 and the federal subsidy is $400 for a Silver plan. An individual or family who wants a more expensive or higher tier plan, gold or platinum, must pay the difference above the $400 subsidy for the plan they choose. Likewise, an individual of family that wants to save money can use their $400 subsidy to purchase a Bronze level plan and cut their cost. HSA plans will be available at both the silver and Bronze level.