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Health Insurance Glossary

Definitions for common health insurance terms

cost-sharing subsidies

DEFINITION: Cost-sharing subsidies are subsidies that are paid directly from the federal government to the insurer in order to reduce maximum out-of-pocket medical expenses (deductibles, coinsurance, copays) for households with incomes up to 250 percent of the Federal Poverty Level, and to also increase the Actuarial Value of plans for households with incomes up to 250 percent of FPL.

In order to receive this benefit, the enrollee must meet the income criteria and select a Silver plan through the exchange. The subsidies are not considered a tax credit and do not need to be reconciled when the insureds file their taxes.