The American Recovery Plan (ARP) that President Biden signed into law on March 11 makes major improvements in access to and affordability of health insurance by increasing financial assistance to help pay for Marketplace coverage.
Within the legislation there are many components that are important to understand about health care choices including:
- Open enrollment has been extended through August 15, 2021. For individuals/families who did not take advantage of the open enrollment period at the end of 2020, this is another opportunity to purchase health insurance. Additionally, if you are currently insured you may use this period to change to a different plan.
- If you are currently receiving a premium tax credit, you will likely be eligible for a higher subsidy to help cover the cost of the plan premiums. This provision of the law is effective January 1, 2021 and continues through 2022.
- If you are not currently receiving a subsidy, you may be eligible to receive one now. The American Rescue Plan will cap the cost of the premiums (for the second-lowest silver plan) at 8.5% of household income. For those of you who purchased your plan directly from the insurance company, you will need to change plans and purchase a plan through healthcare.gov if you want to take advantage of premium assistance. The law increases the premium tax credit for coverage years 2021 and 2022.
- If you received or are eligible for at least one week of unemployment payments, in 2021 you are eligible for a silver plan with close to a $0 premium and significant cost-sharing reductions. This will be implemented in July 2021. In the meantime, you can take advantage of the expanded tax credits available based on your income.
- The American Rescue Plan will subsidize up to 100 percent of the cost of COBRA premiums for individuals who are involuntarily terminated or had their hours reduced. The availability of the COBRA subsidy does not extend the length of the COBRA continuation itself. The 100% subsidy begins April 1, 2021 and continues through September 30, 2021. It is likely that there will be an opportunity to change to a marketplace plan once the COBRA premium subsidy runs out.
- Generally, Medicaid for pregnancy lasts for 60 days after giving birth. With the new bill, states can opt in to extend Medicaid to 12 months. This measure will be in effect for 7 years. Oregon has not yet adopted this provision but may do so.
- For the 2020 tax year only, taxpayers who underestimated their income – meaning they paid too little in premiums throughout the year, won’t have to pay back the excess subsidy. The IRS will reimburse people who have already repaid any excess advance Premium Tax Credit on their 2020 tax return – no further action is needed by the taxpayer.
Now more than ever, you should consider having a broker assist you. Agents and brokers are available to help you at no cost. As always, my goal is to help you stay healthy, wealthy, & wise, so please give me a call to schedule a time to review your health insurance options. I look forward to hearing from you.