When you purchase a health plan outside the government marketplace, that's off-exchange coverage. It comes with differences that affect tax credits and may make it a better fit for certain households.
Hi, I'm Sam Jaber, a licensed health insurance broker. I get questions about "off-exchange" coverage all the time. Usually, someone has heard the term from an agent or seen it on a website, but nobody has explained what it means. Here's a plain-English explanation to help you decide whether it's worth including in your comparison.
Off-exchange coverage simply means a health plan purchased outside the government marketplace, also known as the exchange. It isn't a different insurance card or an entirely separate type of coverage. What changes is where you purchase the plan and which rules and tax credits apply. Some plans sold outside the marketplace appear on websites that look like marketplaces, while others don't. So you can't tell what you're getting from the label alone.
That's why I start by checking the rules that apply to a plan, rather than relying on its name.
You can only receive the premium tax credit for qualified health plans enrolled in through an exchange established by a state. That's the main difference to understand. Buying a plan off-exchange means you won't receive the marketplace credit, regardless of your income. The credit is also available only when household income is between 100% and 400% of the federal poverty line, which matters when you're comparing marketplace plans.
When your household income is within the credit range, I usually start with the marketplace because that's where you can receive the credit. This makes a real difference when comparing prices, since coverage purchased outside the marketplace cannot include that credit.
Next step: Talk to me before signing up. We'll work out a realistic income estimate and compare marketplace coverage against the price of a plan purchased outside the marketplace. That way, you'll have actual numbers to guide your decision.
Once your income is above 400% of the poverty line, choosing off-exchange coverage doesn't mean giving up a credit. It's worth comparing, particularly if you travel or prefer a broad national network. Plans can vary in medical underwriting, network type and benefits, so I'll explain those differences with you instead of assuming every plan is suitable.
Next step: Give me a call, and I'll put the marketplace price alongside the off-exchange option. I'll also walk you through what each plan covers so you can make an informed choice.
If your state's marketplace doesn't have a PPO, you still have another option. I can help you apply for a nationwide PPO in every state where I'm licensed. Looking at off-exchange coverage is one way I help you find that option. We'll compare it together rather than assume it's automatically the right choice.
These are the questions I cover during every call. I use the actual plan documents to give you answers, rather than relying on what I remember.
Straight answers, no sales pitch.
Not exactly. Because you purchase it outside the marketplace, it doesn't include marketplace tax credits, and different rules may apply. You can't determine which rules cover a plan just by looking at its name or insurance card.
It can be, but that isn't true for every household. Your income, state and health history all affect the answer. The dependable way to decide is to compare both options, which is why I go through the numbers with you over the phone.
Yes, but you can't take the credit with you when you purchase a plan outside the marketplace. For most people who qualify for financial help, I start with marketplace coverage. If that's the better choice, I'll tell you.
I can review coverage options with you in any of the 36 states where I hold a license. Since availability and requirements vary by state and plan, I'll verify both before making a recommendation.
Tell me where you live, how many people are in your household and your realistic income estimate. I'll walk you through the differences between marketplace coverage and plans purchased outside it, then give you a straight answer about which makes more sense.
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