With respect to the Affordable Care Act health insurance exchanges, a benchmark plan is the second lowest-cost silver plan premium in the consumer’s region. The Premium Tax Credit (PTC) related to Affordable Care Act plans is based on the cost of the benchmark plan as it relates to the household income of the insurance enrollee. The higher the benchmark plan premium, the larger the PTC.
There is a second type of benchmark plan that relates to Essential Health Benefits (EHB). Essential Health Benefits are the 10 categories of health benefits, such as lab tests and hospitalization, that are required coverage within Affordable Care Act health plans. The specific medical services covered within each category, such as the mandatory number and classes of covered prescription medications, are established by each state through the selection of a benchmark plan whose benefits define the scope of each EHB category within the state.
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