The Benchmark Silver Plan, and Why Your Credit Depends on It

The benchmark is the second-lowest-cost Silver plan available to your household in your county. Your premium tax credit is that plan's premium minus the share of income you are expected to contribute — and the credit is the same dollar amount whichever plan you actually enrol in.

Every ACA subsidy calculation runs through one plan: the second-lowest-cost Silver plan available to your household. It is usually shortened to SLCSP. You do not have to buy it, and most people don’t — but the size of your credit is decided by its price.

Why a plan you might not buy

The law needed a fixed yardstick. Without one, the credit would depend on which plan you chose, which would mean the government paying more for people who picked more expensive coverage.

So the rule is: work out what this household should contribute toward a mid-range plan, and cover the difference. The credit comes out as a dollar figure, and that figure is yours to spend on any plan on the exchange.

What that means in practice

Because the credit is a fixed dollar amount:

• Buying a cheaper plan than the benchmark keeps the difference — sometimes reducing the premium to zero, though the credit cannot exceed the plan’s cost.
• Buying a more expensive plan means paying the difference yourself.
• If the benchmark premium in your area goes up, your credit goes up with it, which cushions the increase. This is why headline premium rises often affect subsidised and unsubsidised enrollees very differently.

One reason to buy Silver anyway

Cost-sharing reductions — the subsidies that lower deductibles and copays rather than premiums — are only available on Silver plans, and only below 250% of the federal poverty line. A household in that range that buys Bronze to save on premiums gives up a benefit that can be worth considerably more than the premium saving.

How to find yours

The number depends on your county and the age of everyone being covered, so it cannot be estimated from national figures.

1. Go to healthcare.gov, or your state’s own exchange if it runs one.
2. Use the “see plans and prices” preview, which does not require an account.
3. Enter your ZIP code, household size and each person’s age.
4. Filter to Silver plans, sort by premium, and take the second cheapest — the full price before any subsidy is applied.

For a past year rather than an upcoming one, the figure appears on Form 1095-A in column B, which the Marketplace sends each January.