A Qualified Health Plan (QHP) is a type of private health insurance that meets the standards set forth by the federal Affordable Care Act (ACA), also known as Obamacare. These plans are designed to provide standardized, quality health coverage to individuals and families who purchase insurance on their own. A QHP is certified by a Health Insurance Marketplace to ensure it adheres to specific government regulations regarding benefits, cost-sharing, and consumer protections.
Mandatory Requirements for QHP Certification
Certification as a Qualified Health Plan requires an issuer to comply with federal standards that distinguish these policies from non-ACA-compliant insurance. A core requirement is the coverage of the ten Essential Health Benefits (EHBs), including services like hospitalization, maternity and newborn care, prescription drugs, mental health services, and preventive care. These plans must provide comprehensive coverage without imposing annual or lifetime dollar limits on benefits.
QHPs must follow established limits on the amount an enrollee pays out-of-pocket for covered services annually. This Maximum Out-of-Pocket (MOOP) limit is set by the Centers for Medicare & Medicaid Services (CMS) and prevents consumers from facing catastrophic medical expenses. Furthermore, all QHPs must cover certain preventive services, such as immunizations and specific screenings, without any cost-sharing, meaning the patient pays no deductible, copayment, or coinsurance.
A central consumer protection feature is the prohibition against denying coverage or charging higher premiums based on an applicant’s health status, including pre-existing conditions. Insurers offering QHPs must accept every applicant who applies during the open enrollment period. The certification process involves rigorous annual review by CMS or a state-based regulator to ensure compliance with benefit design standards, rate justification, and network adequacy.
Insurers offering QHPs must also satisfy operational and quality standards, including obtaining accreditation from recognized entities like the National Committee for Quality Assurance (NCQA) or URAC. This accreditation process evaluates areas such as clinical quality measures, patient experience ratings, and network access.
Accessing QHPs Through the Health Insurance Marketplace
Qualified Health Plans are exclusively offered for purchase through the Health Insurance Marketplace, operating either as the federal platform (HealthCare.gov) or as a state-run exchange. This centralized location allows individuals and families to compare various certified plans based on price, benefits, and network structure. The Marketplace is the only place where QHPs are offered with certain financial assistance options.
The plans available are categorized into four “metal tiers”—Bronze, Silver, Gold, and Platinum—based on the plan’s Actuarial Value (AV). AV represents the average percentage of covered health care costs the plan will pay. For instance, a Silver plan covers approximately 70% of costs, while a Platinum plan covers around 90%. Higher metal tiers result in higher monthly premiums but lower out-of-pocket expenses when care is received.
Most enrollment in a QHP takes place during the Annual Open Enrollment Period (OEP), which typically runs from November 1 through January 15. Enrollment outside of this window is generally only permitted under a Special Enrollment Period (SEP), triggered by a Qualifying Life Event (QLE). Examples of QLEs include losing other health coverage, getting married, having a baby, or moving to a new service area.
A QHP issuer must offer at least one Silver-level and one Gold-level plan in every service area where they participate. There is also a minimum coverage option, known as a Catastrophic plan, available only to people under age 30 or those who qualify for a hardship exemption. These Catastrophic plans have very high deductibles and are designed to protect against worst-case scenarios.
Financial Assistance Exclusively for Qualified Health Plans
A primary advantage of purchasing a QHP through the Marketplace is the exclusive access to federal financial assistance, which is unavailable for plans bought outside the exchange. The Premium Tax Credit (PTC) is the primary aid, functioning as a refundable tax credit to help eligible individuals reduce their monthly premiums. The credit can be taken in advance, paid directly to the insurer to lower the monthly bill, or claimed later when filing taxes.
Eligibility for the Premium Tax Credit is determined by household income relative to the Federal Poverty Level (FPL). Assistance is traditionally available to those earning between 100% and 400% of the FPL, though temporary legislation has expanded eligibility. The credit is calculated using a sliding scale, ensuring individuals with lower incomes receive a larger subsidy to offset the premium cost.
Another form of financial help is the Cost-Sharing Reduction (CSR), which reduces the amount an enrollee pays out-of-pocket when using health care services. CSRs lower deductibles, copayments, and the annual maximum out-of-pocket limit, making the plan’s benefits more generous. To receive CSRs, an individual must enroll in a Silver-tier QHP and have a household income below 250% of the FPL.
Those who qualify for CSRs receive a Silver plan that has a higher Actuarial Value than the standard tier, often comparable to a Gold or Platinum plan regarding out-of-pocket costs. The income thresholds for both the PTC and CSRs are tied to the FPL, and the government makes payments directly to the insurance issuer to cover the cost of these reductions.