The ACA’s Second Lowest Cost Silver Plan (SLCSP) Explained

The Health Insurance Marketplace sells four different types of plans: bronze, silver, gold, and platinum. These four plans provide varying levels of coverage, and the cost varies, with platinum plans being the most expensive. The Second Lowest Cost Silver Plan (SLCSP) is the silver plan that has the second to least expensive available in the geographic location of the taxpayer’s home. To find this plan, search the marketplace for silver plans, then sort the results by price. This will determine which silver plan is available to you and your family with the second lowest cost.

The Premium Tax Credit, used to offset the cost of premiums and make health insurance more affordable for taxpayers, uses the Second Lowest Cost Silver Plan as a base. You aren’t required to select this specific plan to be eligible to claim the credit.

The Premium Tax Credit is determined by:

  • Adding all income to calculate Household Income
  • Finding where your Household Income lies on the poverty line (by percent)
  • Determine the applicable percentage
  • Multiply your household income by the applicable percentage to find the required contribution
  • Subtract the required contribution amount from the cost of the SLCSP
  • Use the difference to compare premiums of health plans you are enrolled in
  • Lowest amount is the amount you will receive in a tax credit

You do not have to purchase a specific plan, and taxpayers may opt to buy a higher plan. In these scenarios, the taxpayer will be responsible for paying the part of the premium that the credit amount doesn’t account for.

The Premium Tax Credit is not refundable, so while you may purchase a plan that is cheaper than the SLCSP, you won’t receive the leftover credit amount should you qualify.