Advanced Premium Tax Credit (APTC) – A tax credit you can take in advance to lower your monthly health insurance payment (or “premium”). When you apply for coverage in the Marketplace, you estimate your expected income for the year. If you qualify for a premium tax credit based on your estimate, you can use any amount of the credit in advance to lower your premium.
- If at the end of the year you have taken more premium tax credit in advance than you are due based on your final income, you will have to pay back the excess when you file your federal tax return.
- If you have taken less than you qualify for, you will get the difference back.
Broker – An agent or broker is a person or business who can help you apply for help paying for coverage and enroll in a Qualified Health Plan (QHP) through the Marketplace. They can make specific recommendations about which plan you should enroll in. They’re also licensed and regulated by states and typically get payments, or commissions, from health insurers for enrolling a consumer into an issuer's plans. Some brokers may only be able to sell plans from specific health insurers.
Catastrophic Plan – Health plans that meet all of the requirements applicable to other Qualified Health Plans (QHPs) but that do not cover any benefits other than 3 primary care visits per year before the plan's deductible is met. The premium amount you pay each month for health care is generally lower than for other QHPs, but the out-of-pocket costs for deductibles, copayments, and coinsurance are generally higher. To qualify for a Catastrophic plan, you must be under 30 years old OR get a "hardship exemption" because the Marketplace determined that you are unable to afford health coverage.
Coinsurance – The percentage of costs of a covered health care service you pay (20%, for example) after you have paid your deductible.
If your health insurance plan's allowed amount for an office visit is $100 and your coinsurance is 20%.
- If you have paid your deductible: You pay 20% of $100, or $20. The insurance company pays the rest.
- If you have not met your deductible: You pay the full allowed amount, $100.
Example of coinsurance with high medical costs
Let's say the following amounts apply to your plan and you need a lot of treatment for a serious condition. Allowable costs are $12,000.
- Deductible: $3,000
- Coinsurance: 20%
- Out-of-pocket maximum: $6,850
You would pay all of the first $3,000 (your deductible).
You will pay 20% of the remaining $9,000, or $1,800 (your coinsurance).
So your total out-of-pocket costs would be $4,800 — your $3,000 deductible plus your $1,800 coinsurance.
If your total out-of-pocket costs reach $6,850, you would pay only that amount, including your deductible and coinsurance. The insurance company would pay for all covered services for the rest of your plan year.
Generally speaking, plans with low monthly premiums have higher coinsurance, and plans with higher monthly premiums have lower coinsurance.
Copayment – A fixed amount ($20, for example) you pay for a covered health care service after you have paid your deductible.
Let's say your health insurance plan's allowable cost for a doctor's office visit is $100. Your copayment for a doctor visit is $20.
- If you have paid your deductible: You pay $20, usually at the time of the visit.
- If you have not met your deductible: You pay $100, the full allowable amount for the visit.
Copayments (sometimes called "copays") can vary for different services within the same plan, like drugs, lab tests, and visits to specialists.
Generally plans with lower monthly premiums have higher copayments. Plans with higher monthly premiums usually have lower copayments.
Cost Sharing Reduction (CSR) – A discount that lowers the amount you have to pay for deductibles, copayments, and coinsurance. In the Marketplace, cost-sharing reductions are often called “extra savings.” If you qualify, you must enroll in a plan in the Silver category to get the extra savings.
- When you fill out a Marketplace application, you will find out if you qualify for premium tax credits and extra savings. You can use a premium tax credit for a plan in any metal category. But if you qualify for extra savings too, you will get those savings only if you pick a Silver plan.
- If you qualify for cost-sharing reductions, you also have a lower out-of-pocket maximum — the total amount you would have to pay for covered medical services per year. When you reach your out-of-pocket maximum, your insurance plan covers 100% of all covered services.
- If you are a member of a federally recognized tribe or an Alaska Native Claims Settlement Act (ANCSA) Corporation shareholder, you may qualify for additional cost-sharing reductions.
Deductible – The amount you pay for covered health care services before your insurance plan starts to pay. With a $2,000 deductible, for example, you pay the first $2,000 of covered services yourself.
After you pay your deductible, you usually pay only a copayment or coinsurance or covered services. Your insurance company pays the rest.
- Many plans pay for certain services, like a checkup or disease management programs, before you've met your deductible. Check your plan details.
- All Marketplace health plans pay the full cost of certain preventive benefits even before you meet your deductible.
- Some plans have separate deductibles for certain services, like prescription drugs.
- Family plans often have both an individual deductible, which applies to each person, and a family deductible, which applies to all family members.
Generally, plans with lower monthly premiums have higher deductibles. Plans with higher monthly premiums usually have lower deductibles.
Essential Health Benefits – A set of 10 categories of services health insurance plans must cover under the Affordable Care Act. These include doctors’ services, inpatient and outpatient hospital care, prescription drug coverage, pregnancy and childbirth, mental health services, and more. Some plans cover more services.
Plans must offer dental coverage for children. Dental benefits for adults are optional.
Specific services may vary based on your state’s requirements. You will see exactly what each plan offers when you compare plans.
Exemption – Granted based on certain hardships and life events, health coverage or financial status, membership in some groups, and other circumstances. New Jersey residents must have qualifying health insurance or pay a fee (sometimes called the “Shared Responsibility Payment,” “mandate,” or “penalty”) unless they qualify for a health coverage exemption.
In-network Coinsurance – The percent (for example, 20%) you pay of the allowed amount for covered health care services to providers who contract with your health insurance or plan. In-network coinsurance usually costs you less than out-of-network coinsurance.
In-network Copayment – A fixed amount (for example, $15) you pay for covered health care services to providers who contract with your health insurance or plan. In-network copayments usually are less than out-of-network copayments.
Life-changing events – Certain life events such as a birth, marriage, loss of coverage or relocation, you can enroll or change your current coverage through the Marketplace, or off the Marketplace, without waiting for the Annual Open Enrollment Period.
If you qualify for an SEP, you usually have up to 60 days following the event to enroll in a plan. If you miss that window, you have to wait until the next Open Enrollment Period to apply.
Marketplace – Shorthand for the “Health Insurance Marketplace,” a shopping and enrollment service for medical insurance created by the Affordable Care Act in 2010. New Jersey now operates its own Marketplace called Get Covered New Jersey.
Minimum Essential Coverage (MEC) – Any insurance plan that meets the Affordable Care Act requirement for having health coverage. To avoid the penalty from the State of New Jersey you must be enrolled in a plan that qualifies as minimum essential coverage (sometimes called “qualifying health coverage”). Examples of plans that qualify include: Marketplace plans; job-based plans; Medicare; and Medicaid & CHIP.
Modified Adjusted Gross Income (MAGI) – The figure used to determine eligibility for premium tax credits and other savings for Marketplace health insurance plans and for Medicaid and the Children's Health Insurance Program (CHIP). MAGI is adjusted gross income (AGI) plus these, if any: untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest.
- For many people, MAGI is identical or very close to adjusted gross income.
- MAGI does not include Supplemental Security Income (SSI).
- MAGI does not appear as a line on your tax return.
Navigator – An individual or organization that is trained and able to help consumers as they look for health coverage options through the Marketplace, including completing eligibility and enrollment forms. These individuals and organizations are required to be unbiased. Their services are free to consumers.
New Jersey Health Plan Savings – A new state subsidy that will lower the cost of health insurance. These new savings are only possible because New Jersey is now operating the Health Insurance Marketplace through GetCovered.NJ.Gov.
The NJ Health Plan Savings (NJHPS) will decrease the costs of premiums for current Marketplace enrollees and for new enrollees. NJHPS will start lowering premiums for coverage that starts January 1, 2021 or after.
Similar to the Advance Premium Tax Credit (APTC), New Jersey residents will qualify for these new savings based on income.
Out-of-Network Copayment – A fixed amount (for example, $30) you pay for covered health care services from providers who do not contract with your health insurance or plan. Out-of-network copayments usually are more than in-network copayments.
Out-of-Pocket Cost – Your expenses for medical care that are not reimbursed by insurance. Out-of-pocket costs include deductibles, coinsurance, and copayments for covered services plus all costs for services that are not covered.
Out-of-Pocket Maximum – The most you have to spend for covered services in a year. After you spend this amount on deductibles, copayments, and coinsurance for in-network care and services, your health plan pays 100% of the costs of covered benefits.
Out-of-Network Coinsurance – The percentage (for example, 40%) you pay of the allowed amount for covered health care services to providers who do not contract with your health insurance or plan. Out-of-network coinsurance usually costs you more than in-network coinsurance.
Premium – The amount you pay for your health insurance every month. In addition to your premium, you usually have to pay other costs for your health care, including a deductible, copayments, and coinsurance.
Premium Tax Credit or PTC – A tax credit you can use to lower your monthly insurance payment (called your “premium”) when you enroll in a plan through Get Covered New Jersey. Your tax credit is based on the income estimate and household information you put on your Get Covered New Jersey application.
You can use all, some, or none of your premium tax credit in advance to lower your monthly premium.
- If you use more advance payments of the tax credit than you qualify for based on your final yearly income, you must repay the difference when you file your federal income tax return.
- If you use less premium tax credit than you qualify for, you’ll get the difference as a refundable credit when you file your taxes.
Qualifying Life Event (QLE) – A change in your situation — like getting married, having a baby, or losing health coverage — that can make you eligible for a Special Enrollment Period, allowing you to enroll in health insurance outside the yearly Open Enrollment Period.
Reconcile Your Taxes - When receiving Premium Tax Credits, consumers must compare the amount of premium tax credits they received in a year against the amount of tax credits they were eligible for during that year based on year-end income. If you received tax credits, you will use the IRS form 8962 to report the amount of Advance Premium Tax Credit received throughout the year when you file your taxes. If you received more premium tax credits than you qualified for, you may owe some of the premium tax credits back in your taxes. If you received too little, you could receive an additional tax credit.
Shared Responsibility Payment – New Jersey requires state residents to maintain health insurance. The law requires you and your family to have minimum essential health coverage, unless you qualify for an exemption. Failure to have health coverage or qualify for an exemption will result in a Shared Responsibility Payment when you file your New Jersey Income Tax return. For more information visit the Department of Treasury website.
State Subsidy – Financial help available to lower the cost of health insurance. The state subsidy – called The NJ Health Plan Savings (NJHPS) – will decrease the costs of premiums for current Marketplace enrollees and for new enrollees. NJHPS will start lowering premiums for coverage that starts January 1, 2021 or after.
Similar to the Advance Premium Tax Credit (APTC), New Jersey residents will qualify for these new savings based on income.
Total Cost Estimate (for health coverage) – The total amount you may have to pay for health plan coverage, which is estimated before you actually have the coverage and have health expenses under the coverage.
Generally, your total cost is your premium + deductible + out-of-pocket costs + any copayments/coinsurance. When you preview plans at Get Covered New Jersey, you will see an estimate of your total costs, but your actual expenses will likely vary.