The American Rescue Plan Act (ARPA)
The American Rescue Plan Act 2021 (ARPA) has had a MASSIVE impact to health insurance ELIGIBILITY & PREMIUMS. This means that health insurance that has been purchased via the Affordable Care Act (ACA) will now be LESS EXPENSIVE for many, including higher-income individuals who did not previously qualify.
In a nutshell, the American Rescue Plan has:
1. Increased the subsidies for premiums paid.
2. Expands who is now eligible for insurance premium tax credits.
As a bit of background, the Affordable Care Act (ACA) allowed enrollment during the Fall, for the following year. However, ARPA has changed this and it is particularly IMPORTANT for those that either DO NOT have health insurance or were laid off during the pandemic & decided to keep their former Employer’s health coverage via COBRA.
So, if you DO NOT have a Health Insurance Plan via your Employer there is a SPECIAL open enrollment period UNTIL August 15th (it was previously May 15th). This means you can sign up NOW and get immediate coverage!!!
If you lost your job and kept your health insurance plan through your former employer via COBRA – then pay attention. Normally, you are required to pay 100% of the premium cost. However, according to ARPA, your premium will reduce to USD 0 from 1st of April to 30th of September. If this is your situation, please contact your former employer (if they haven’t done so already).
However, it is VERY IMPORTANT to keep in mind that COBRA covers you (if you pay the premium in full) to have health coverage for 18 months after leaving the job. This 18-month rule still applies. However, in September, you can revisit your plan and consider shopping for an ACA plan. So, again as of September 30th YOU will be responsible for 100% of the premiums on your health care plan.
If you currently have Health Insurance, it is still worth shopping around and see if you can save money with an ACA policy. However, keep in mind the new plan’s deductible (the amount you pay before your health insurance kicks in) as it may start from zero once again.
When you apply for Marketplace coverage, you will find out if you qualify for a “premium tax credit” which is based on your estimated household income for 2021.
If you want to find out if you qualify for Marketplace savings go to https://www.healthcare.gov/lower-costs .
Other helpful links:
Government Fact Sheet on this subject matter: https://www.hhs.gov/about/news/2021/03/12/fact-sheet-american-rescue-plan-reduces-health-care-costs-expands-access-insurance-coverage.html
Healthcare Gove website: https://www.healthcare.gov/more-savings/
For a helpful Health Insurance Marketplace Calculator: https://www.kff.org/interactive/subsidy-calculator/
To note, there are certain states that run their own ACA marketplace, but don’t worry as you will be routed correctly once you fill in the information of where you live.
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