How the American Rescue Plan Improves Affordability of Private Health Insurance

Are you uninsured or worse…underinsured? Over the past month we’ve been talking about the new American Rescue Plan and how the new stimulus funding has opened up a whole path to insurance, and it’s for good reason. There are so many benefits to taking advantage of this new plan:

Expanded Marketplace Premium Subsidies

Under the new American Rescue Plan, the ACA marketplace premium subsidies are signicantly enhanced for individuals at every income level. And now, for the first time, these subsidies re being offered to those with income above 4 times the federal poverty level. Individuals up to 150% of the federal poverty level can now get silver plans for zero premium with vastly reduced deductibles. As a result, low income individuals can now qualify for premium-free silver plans with modest deductibles for covered health benefits.

Enhanced Subsidies for Unemployed Individuals

The ARP also provides enhanced marketplace subsidies for those who received or are approved to receive unemployment insurance benefits during any week in 2021. It also extends the current federal supplement ($300/week) to be eligible for benefits through September 6th, 2021.

Premium Tax Credit Repayment Holiday for 2020

When individuals apply for marketplace premium subsidies, they do so based on their estimated annual income for that year. Later, when they file federal tax returns, individuals must reconcile their actual income with the amount of premium tax credit received on estimated income and repay some or all o f any excess premium tax credit. The ARP recognizes that the pandemic caused greater-than-usual economic disruption in 2020 and waived repayment of any excess premium tax credit received by marketplace individuals during that year.

Temporary COBRA Premium Subsidies for 2021

The ARP also provides for temporary COBRA premium subsidies for up to 6 months during 2021. These subsidies will cover 100% of the monthly cost of COBRA while people are eligible. This law requires the former employer to pay the COBRA premium for subsidy-eligible individuals; the federal government will then reimburse the former employer for this cost.

For example, someone who first became eligible for COBRA due to a job layoff in March of 2020 could continue in that plan for 18 months or through August 20201. That individual could claim the COBRA premium subsidy starting in April 2021, and the subsidy would end when COBRA is exhausted at the end of August. 

So many of these ARP changes improve the affordability of private health coverage for individuals who are already enrolled in marketplace health plans and provide millions more an opportunity to sign up for new coverage with increased financial assistance this year. It’s also made changes to the Medicaid program where it will also increase coverage, expand benefits, and adjust federal financing.

What next? The enhanced ACA premium subsidies will be available through the marketplace from April 1st until August 15th of 2021. Give us a call and we can help find you the best coverage if you’re shopping and subsidies if you already have a plan! We’re proud to be the top health insurance agency in Coral Springs and Parkland, Florida!