AMERICAN RESCUE PLAN ACT OF 2021 (ARP)
The New Law: President Biden signed the American Rescue Plan Act of 2021 (ARP) into law on March 11, 2021.
- ARP makes major improvements in access to and affordability of health coverage through the Marketplace by increasing eligibility for financial assistance to help pay for Marketplace coverage.
- The new law will lower premiums for most people who currently have a Marketplace health plan and expand access to financial assistance for more consumers.
- Under the new law, many people who buy their own health insurance directly through the Marketplace will become eligible to receive increased tax credits to reduce their premiums. Starting April 1, 2021
- Premiums after these new savings will decrease, on average, by $50 per person per month or by $85 per policy per month.
- Four out of five enrollees will be able find a plan for $10 or less/month after premium tax credits, and over 50% will be able to find a Silver plan for $10 or less.
- Most people across all household income levels will see lower premiums as a result of receiving more tax credits to reduce plan prices. Many consumers with household incomes from 100% to 150% FPL would have $0 premium plans (after tax credits) available to choose from when considering their options and selecting a plan.
EXPANDING ACCESS
- The new law will make premium tax credits available to families making more than 400% FPL who didn’t previously qualify.
- Caps how much of a family’s household income the family needs to pay towards their premiums at 8.5%, based on the cost of the benchmark plan.
- The law increases premium tax credits for all income brackets for coverage years beginning in 2021 and 2022.
- Taxpayers who receive unemployment compensation during any week beginning in 2021 may be eligible to receive premium tax credits to help pay for 2021 Marketplace coverage.
WHEN
- Increased premium tax credits based on the lower income contribution percentage along with expanding tax credit access to consumers with household incomes above 400%, will be available through HealthCare.gov starting on April 1st. This means that new consumers and current enrollees who submit an application and select a plan on or after April 1 will receive the increased premium tax credits for 2021 Marketplace coverage.
- Extra tax credits for consumers receiving unemployment compensation will be available starting July 2021.
WHAT TO DO IF YOU ARE CURRENTLY ENROLLED?
- While the 2021 SEP opportunity is available through August 15th, current enrollees can decide during the SEP opportunity if they may want to change to a new plan for the rest of the year.
- Consider Your Deductible (if applicable): You should consider how much you’ve already paid toward your deductible when deciding whether or not a change in plan makes sense for you.
- When you change plans, the amount you’ve paid already towards meeting your prior plan’s deductible may be reset to zero, and you would need to start over paying out of pocket expenses to reach the deductible on your new plan.
TAXES
- Consumers who enrolled in Marketplace plans prior to April 1 have the choice of waiting until they file their taxes next year in 2022 to receive the additional premium tax credit amount when they file and reconcile their 2021 taxes.
If you want to choose another plan and/or decrease your premium, email us or give us a call at 754-300-4544.