Which statement correctly defines a qualified health plan (QHP)?

Why A is correct

A qualified health plan (QHP) is a health plan that is certified by an exchange (in California, Covered California) as meeting the ACA's standards for coverage. A QHP must cover the essential health benefits, comply with cost-sharing and actuarial-value limits, and be offered through the marketplace. Certification is what makes the plan 'qualified' and eligible to receive premium tax credits on behalf of enrollees. QHPs may be offered at the Bronze, Silver, Gold, or Platinum metal levels. A QHP must also comply with the exchange's network adequacy, marketing, and transparency requirements, and only enrollees in a QHP may receive premium tax credits and cost-sharing reductions.

Why the other options are wrong

• B) Merely being employer-sponsored does not make a plan a QHP; the plan must meet the exchange certification standards.
• C) A plan covering only catastrophic expenses is a separate, limited category of coverage; it does not define a QHP.
• D) QHPs are private insurance products offered through the exchange, not government-administered Medicare plans.

Memory hook

QHP = the exchange's stamp of approval. Certified, comprehensive, and marketplace-offered.

Why A is correct

Under the ACA, a Qualified Health Plan is a health insurance plan that is certified by an exchange (in California, Covered California) and provides the essential health benefits. A QHP must also meet standards for marketing, network adequacy, and quality reporting. Plans certified as QHPs are the products eligible to be sold on the exchange and the plans for which premium tax credits are available. This is the definitional core of the exchange marketplace. Only QHPs may be sold through Covered California, and only enrollees in QHPs are eligible for premium tax credits and cost-sharing reductions. The certification process reviews benefits, cost-sharing, network adequacy, and rate reasonableness before a plan reaches consumers.

Why the other options are wrong

• B) QHPs are exchange-certified products for individuals and small groups, not employer-only plans for large employers.
• C) QHP enrollees pay premiums, though eligible individuals may receive premium tax credits to reduce the cost.
• D) QHPs cover comprehensive essential health benefits, not just catastrophic events; catastrophic coverage is a separate limited category.

Memory hook

QHP = the exchange's certified seal of approval; no certification, no marketplace shelf.