Patient Protection and Affordable Care Act; Actuarial Value Calculator Methodology

In the Essential Health Benefits, Actuarial Value, and Accreditation final rule, published in the Federal Register, HHS requires use of an AV Calculator by non-grandfathered health insurance plans offered in the individual and small group markets, both inside and outside of the Affordable Insurance Exchanges (Exchanges) for the purposes of determining levels of coverage. Section 1302(d)(2)(A) of the Affordable Care Act stipulates that AV be calculated based on the provision of essential health benefits (EHB) to a standard population. The statute groups health plans into four tiers: bronze, with an AV of 60 percent; silver, with an AV of 70 percent; gold, with an AV of 80 percent; and platinum, with an AV of 90 percent. The final rule establishes that a de minimis variation of +/2 percentage points of AV is allowed for each tier.