Under the Affordable Care Act (ACA), small employers—those with 1 to 50 full-time equivalent employees—can offer small group health insurance.
These plans are categorized into four insurance tiers known as metal levels. The metal tiers are Bronze, Silver, Gold, and Platinum, and they’re the same tiers used in individual health insurance plans.
This article will explain the difference between the four insurance tiers so you can make a more informed choice when offering your team health benefits.
What do the health insurance metal levels mean?
Metal tiers represent the cost-sharing split between plan participants and the insurance company. Or in other words, it says how much employees will pay and how much the insurance company will pay, making it easier to compare health plans.
A Silver plan has a lower monthly premium than a Gold one, but a Bronze plan has the lowest monthly premium with the highest cost-sharing requirements of all the plans, while a Platinum insurance plan has the highest monthly premiums and lowest out-of-pocket costs.
These insurance cost-sharing requirements typically include:
- Deductibles, or the amount you need to pay for covered services before the insurance plan starts to pay.
- Coinsurance, which is the percentage of costs the insurance plan pays for covered services once participants have met the deductible.
- Copayments, which are payments participants make for covered services in addition to payments made by their insurance plan.
The table below outlines the average cost-sharing breakdown for each metal level.
|Metal tier||Portion participants pay||Portion the health insurance plan pays|
The amount employees actually pay out-of-pocket for medical costs will depend on how much medical care they need in a given year.
For example, if an employee has a Silver health care plan and only needs an annual checkup and a few doctors visits, they’ll spend less than 30% out-of-pocket. Yet if they have an extended hospital stay due to illness, they may end up paying more than 30% out-of-pocket to meet their deductible and cover their expenses.
Each metal tier also has an out-of-pocket limit for marketplace plans. This is the maximum amount employees would have to pay in a covered year before the insurance plan covers 100% of in-network care.
In 2023, the out-of-pocket maximum limit for any type of plan, regardless of the metal tier it’s in, is:
- $9,100 for individual coverage
- $18,200 for family coverage
For 2024, the maximum limit increases:
- $9,450 for individual coverage
- $18,900 for family coverage
Bronze insurance plans generally have the highest maximum limits, while Platinum insurance plans generally have the lowest. Said differently, when it comes to actually using your medical insurance, Bronze plans generally cost the most for participants, while Platinum plans cost the least.
Keep in mind that the metal level only refers to a plan’s cost-sharing requirements for in-network coverage. All individual and small group plans sold through the health insurance marketplace must cover at least 10 essential health benefits (EHBs), regardless of the metal level:
- Ambulatory patient services (outpatient care you get without being admitted to a hospital)
- Emergency services
- Hospitalization (like surgery and overnight stays)
- Pregnancy, maternity, and newborn healthcare needs (both before and after birth)
- Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)
- Prescription drugs
- Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
- Laboratory services
- Preventive health services like screenings, and chronic disease management
- Pediatric services, including oral and vision care (but adult dental and vision coverage aren’t essential health benefits)
How do I choose a metal level as an employer?
While price is an important factor if you’re trying to reduce your health care costs, you also need to consider whether the health plan will cover the range of needs your employees may have.
The chart below is for illustrative purposes only but helps demonstrate which metal tier is best for a variety of scenarios.
Please note: Due to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), you can’t ask employees about any health conditions they have.
However, you can send your employees an anonymous survey to gain insight into what they want from a plan. You could ask general questions like whether they prefer to pay more in premiums or more out-of-pocket or whether they intend to add dependents to their plans.
|Metal tier||Plan is most appropriate for someone who:|
Bronze vs. silver plans: What’s the difference?
Although Bronze and Silver insurance plans offer similar coverage, there are a couple of key distinctions aside from the variation in premiums and out-of-pocket costs.
Bronze insurance plans
However, not all Bronze plans are HSA-eligible. In order to qualify, a Bronze plan must have:
- A higher deductible than a typical individual health plan
- A maximum limit on the annual deductible and out-of-pocket costs
- No coverage until the deductible is met, except for the following expenses:
- Health insurance premiums
- Wellness and preventive care
- Care after an accident
- Dental and vision expenses
Silver insurance plans
Some Silver plans are used as benchmark plans under the ACA. A benchmark plan refers to:
- The second lowest-cost ACA Silver plan in a coverage area, which is used to calculate premium subsidies for individual plans. No matter which plan someone chooses, they will need to know the low cost of the benchmark plan premium to calculate their final premium tax credit.
- The plan a state uses (sometimes often Silver, though not always) to define the essential health benefits (EHBs) for individual and small group health plans. While there are general federal guidelines for EHBs, states can set their own as long as they meet or exceed the federal requirements. For example, the ACA may require a plan to include at least one on-formulary medication in each therapeutic category, but a state can choose a benchmark plan that has three in each category.
The Centers for Medicare & Medicaid Services (CMS) has a list of benchmark plans in each state. All the health plans sold in a given state must include the same EHBs as the benchmark plan, but can also include additional benefits.
You may want to review the benchmark plan in your state to see how EHBs are defined, along with any other state required benefits.
The benchmark plan may or may not be a metal level plan. However, once you know the requirements for your state’s EHBs, you’ll be better able to compare health plans that may include additional coverage or benefits, alongside the lower cost for them. This will help you decide if a plan’s coverage is worth any additional expenses.
Can I choose more than one type of metal plan?
Depending on where you buy health coverage, you may be able to choose more than one plan to offer your employees.
The Small Business Health Options Program (SHOP) lets you give employees a choice from multiple affordable health care plans.
However, you need to meet the following requirements if you want to buy health coverage through SHOP:
- Have 1-50 full-time or full-time equivalent employees
- Have a primary business address in the state where you want to buy coverage
- Have at least one employee enrolled in the plan who isn’t the owner, business partner, or spouse of the employer
- Offer SHOP coverage to all full-time employees
If you use a SHOP-registered agent or broker, you’ll also be able to choose multiple plans. Additionally, some small group private exchanges like CaliforniaChoice allow you to select more than one metal tier.
A health insurance agent or broker can help you understand your options even outside of the public or private exchanges. Many insurance carriers allow you to offer multiple tiers to your employees if you meet certain requirements.
How do I communicate my choice to employees?
Once you choose a plan, you need to provide employees with a copy of the summary of benefits and coverage (SBC) from your insurance company. This document summarizes the plan’s details including what it covers and how much it costs.
If you offer employees more than one option, you need to provide them with copies for each plan.