How Does Health Insurance Marketplace Work?

Meta: You might have heard about Health Insurance Marketplace several times. But how does Health Insurance Marketplace work? Let’s find out!


You can reduce your monthly insurance premiums by paying advanced premium tax credits directly to your insurance company if you’re eligible. You can find out if you’re eligible for those tax credits in the marketplace and enroll in insurance plans that meet your needs and conditions.

But where can you get these information? It’s a place called Health Insurance Marketplace. If you want to know what exactly it is and how it works, our today article can help!

What Is Health Insurance Marketplace?

Also called Health Insurance Exchange, Health Insurance Marketplace is where individuals, families, and small businesses can find every health insurance information and purchase health care insurances. This marketplace covers all of the information about health insurance, such as premium rates and out-of-pocket expenses (deductibles, copayments, coinsurance, etc.).
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The most well-known marketplace is, which is a Federally Facilitated marketplace. Depending on where you live, the marketplace will inquire your ZIP code to see whether your area requires access to the state-based or the Federal Facilitated marketplace. You’ll use the in 37 states where the Federal government runs the marketplace. Otherwise, you’ll be required to use the state-based marketplace in case you’re in one of the 13 states that run their own marketplace.

How Does Health Insurance Marketplace Work?

It was difficult to compare various types of insurance policies on each market before health care laws were updated. Insurance plans used to be complex when they have high co-payments but low deductibles.

Now that the marketplaces exist, many confusions will be cleared, and they make seeking and comparing insurance plans more pleasant than ever. The marketplace makes it easy for people to compare and purchase health coverage that offers benefits known as the essential health benefits. These benefits include rejuvenating patient services, emergency medical services, hospital stays, access to equipment, maternity care, mental health services, chronic diseases treatment, etc.

Four Levels of Health Insurance Plan

Thanks to the health care laws, consumers can simply decide on an insurance plan based on these four levels: Bronze, Silver, Gold, and Platinum. These ‘metal levels’ indicate how much you’ll have to pay and how much you’ll be covered.

1. The Bronze level covers 60% of your medical bills. It has the lowest price to offer you.
2. Having the highest price is obviously the Platinum level; however, it provides you 90% of coverage for your medical bills.
In general, the price ascends from Bronze to Platinum. If you have a serious illness that needs much medical attention, you might want to consider the Platinum level in the marketplace. Otherwise, if you’re not very concerned about getting sick as you still feel very healthy, you might want to look for Bronze level.

Depending on your budget and conditions, you can choose the most suitable level that is conveniently available in the life insurance marketplace.

Form 1095-A

Once you’ve made up your mind and picked out a plan, your enrollment file will be sent to the health plan which will send you an ID and give you coverage after it has received the monthly premium.

You will acquire a Health Insurance Marketplace Statement at the start of the tax filing season after having purchased health insurance from the marketplace.
The statement, called the Form 1095-A, assists you in completing your federal income tax. Tick on the whole year coverage box on your tax return when the Form 1095-A indicates a full-year amount for you and your family. The monthly health insurance premiums you paid for the chosen insurance company is reported totally by the Form 1095-A. In the form of payment to cover the advance premium tax credit paid to your insurance company, the amount of premium support you received is registered in the statement.

You’re obligated to file a federal income tax return whether you choose to personally pay your insurance company the advanced premium tax credit. The Form 1095-A is essential in helping you complete your tax return, and you can get it online on your marketplace’s website. If you want to receive advance payment or the cost-sharing reductions from your marketplace the following year, you should file the tax return in time it’s due. Otherwise, you’ll have to pay for all of the costs including monthly premiums and any other coverage services.

Reporting Changes to the Marketplace

If there are any changes in the circumstances of your household or family income, then you’re responsible for reporting them to the marketplace when you have signed up for insurance coverage. Once you have done that, you will be qualified for special enrollment periods which give you the ability to buy health insurance outside of the normal enrollment opening periods in the marketplace.

You can check out the Premium Tax Credit Change Estimator from various sites for more details on how changes in your situation affect the amount of premium tax credit. The marketplace opens enrollment periods annually for qualified taxpayers. For more information for each period, visit your marketplaces.

Federal Government Financial Assistance

Based on your salary and the number of your family members, you can get financial assistance for your healthcare insurance thanks to the health care reform. Remember to check for eligibility to see whether you can get financial aid in your marketplace plan from the federal government.

Small Business Health Options Program Marketplace

SHOP, short for Small Business Health Options Program, is a marketplace that offers small businesses a helping hand in providing health insurances to their employees. Since 2016, a few states have allowed the SHOP marketplace to give up to 100 employees access, about more than half the employees compared to the previous years. Contact your state’s Insurance Department or the SHOP’s Call Center to see if you are eligible to provide health care insurance for more than 50 employees.
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The SHOP marketplace is flexible with a variety of options to choose from and is also very convenient with its online application and management. SHOP enrollment period has no restrictions and allows you to offer your employees both health and dental coverage if necessary.


To sum up, Health Insurance Marketplace is a complete resource of information. Individuals, families, and small businesses should take advantage of it to do a lot of things: comparing health insurance quotes for coverage and affordability, signing up in a health insurance plan, getting answers to FAQs about health care insurance, finding out whether they’re eligible for tax credits for private insurance or health programs, etc.

It’s simply the biggest resource of health insurance that you could find!

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