Benchmark Plan

The benchmark plan, formally the Second-Lowest-Cost Silver Plan (SLCSP), is the specific Marketplace plan the federal government uses as the reference point to calculate your Advance Premium Tax Credit (APTC). It is not necessarily the plan you should buy. It is the plan whose premium anchors the math.

How the calculation works

The APTC formula has three pieces:

1. The annual premium of the benchmark plan in your county for your household.
2. Your expected contribution, a percentage of your MAGI set by federal law and sliding with income.
3. The difference between the two, which becomes your APTC.

If the benchmark plan costs $7,200 a year and your expected contribution is $1,200, your APTC is $6,000 a year, or $500 a month.

Same dollar amount, any metal tier

This is the part people miss. Your APTC is a fixed dollar figure tied to the benchmark. You can apply that same $500 a month to a Bronze plan, a Silver plan, a Gold plan, or a Platinum plan. The math does not change based on what you buy. It changes only based on the benchmark.

If a Bronze plan in your county costs $400 a month and your APTC is $500, your net premium is $0 and the extra $100 is forfeited. If a Gold plan costs $650, your net premium is $150 a month. Same subsidy, different plan, different out-of-pocket.

Benchmark varies by county and age

Two facts most people do not realize:

• County matters: the benchmark plan in Miami-Dade is a different premium than the benchmark in Orlando, because the insurers and the rates filed are different.
• Age matters: the benchmark price scales with age under the federal age curve. A 60-year-old’s benchmark is roughly three times a 25-year-old’s, so the APTC is much larger for older enrollees.

This is why two households with the exact same income can get very different subsidies depending on where they live and how old they are.

Why insurers care: silver loading

Since insurers know the benchmark Silver plan drives federal subsidy spending, they tend to price Silver plans higher to absorb the cost of Cost-Sharing Reductions the federal government no longer reimburses directly. This practice, called silver loading, pushes the benchmark up, which pushes APTC up, which often makes Bronze plans effectively free for low-income enrollees.

Example

A 45-year-old in Dallas with MAGI of $35,000 has an expected contribution of about 4% of income, or $1,400 a year. The benchmark plan in Dallas County costs $7,800 a year. APTC is $6,400, or about $533 a month. That same $533 monthly subsidy applies whether the household picks the cheapest Bronze plan, a Silver plan with CSR, or a Gold plan.

Related terms

• Advance Premium Tax Credit
• Metal Tiers
• Cost-Sharing Reductions
• MAGI

Run the calculator to see your county’s benchmark and your projected APTC.