Premium Tax Credit

Policy Definition: The premium tax credit reduces eligible Marketplace enrollees’ monthly payments for insurance plans purchased through the Marketplace. Eligibility for tax credits are calculated on a sliding scale based on the consumers income, family size, and other requirements. source

Cost Sharing Reduction (CSR) Subsidy

Policy Definition: Cost-sharing subsidies work by reducing a person or family’s out-of-pocket cost when they use health care services, such as deductibles, copayments, and coinsurance. source

Affordability Threshold

Policy Definition: The affordability threshold is defined by the employee-only contribution amount in Employer Sponsored Health Plans. In 2019, the contribution is considered affordable if it does not exceed 9.86% of an employer’s premium. This percentage changes annually and is based on employee’s W2 wages, their monthly wages, and the federal poverty level for a single individual. source

Excise Tax

Policy Definition: The excise tax is a provision in the Affordable Care Act (ACA) that requires plan sponsors and insurers to pay a 40% excise tax (or Cadillac tax) on the excess cost of employer-sponsored health coverage provided to employees to ensure consumer affordability. This tax is set to be effective in the 2022 tax year. source