What is the Threshold Reduction?

Gross Retiree Costs below the Federally-defined Cost Threshold are not eligible for the subsidy. This amount is referred to as the Threshold Reduction. Gross Retiree Costs will be reduced by the Threshold Reduction when calculating subsidy. The Threshold Reduction amount must be calculated per Qualifying Covered Retiree and aggregated by Benefit Option and plan month.

Note: The Threshold Reduction is required for at least the first month in the plan year where gross costs were reported. For subsequent months, the Threshold Reduction is not required; however, it must be provided as applicable. In order for subsidy to be paid, at least one Qualifying Covered Retiree must surpass the Cost Threshold for the plan year.