American Rescue Plan and Health Insurance
May 21, 2021
On March 11, President Biden signed into law the American Rescue Plan (ARP). It is quite a comprehensive bill with wide ranging support for Americans and many facets of life. Here are the aspects that affect health insurance both individually and employer sponsored.
Under 65 insured in the Marketplace:
The ARP offers lower premiums and additional tax credits to individuals and families who are currently enrolled in a Marketplace health plan. This includes those who recently enrolled during the 2021 Special Enrollment Period (SEP) November 1 – December 15, 2020.
To receive additional tax credits and lower premiums, current Marketplace enrollees must update their applications and enrollments in order to get new eligibility results starting April 1. They will need to reselect their current plan in order for the changes to take effect to reduce their premiums for the remainder of the year.
Starting April 1, individuals enrolling in Marketplace coverage will be able to take advantage of these increased savings and lowered costs. Please note individuals who are paying full premium may now qualify for a tax subsidy as the income limits have been expanded. As we know it today these income limits are expanded for tax year 2021 and 2022.
One of the provisions in ARPA includes a 100% fully subsidized COBRA premium for certain individuals beginning on April 1, 2021 and ending on September 30, 2021 (subsidy period). This law applies not only to employers subject to federal COBRA but also to employers who have less than 20 employees and are subject to state continuation laws comparable to federal COBRA:
Eligibility: COBRA qualified beneficiaries who lose coverage before or during the subsidy period due to a qualifying event of involuntary termination of employment or reduction of hours are eligible for the subsidy.
Extended Election Period: ARPA also extends another opportunity to elect COBRA for certain individuals who would be eligible for a subsidy if they had elected COBRA.
Subsidy Amount: Qualified beneficiaries will be able to elect COBRA, for the subsidy period, at no cost.
Funding: Initially, the premium amount is advanced by one of these three entities: (1) the insurer of a fully insured group health plan, (2) the plan sponsor of a self-funded group health plan, or (3) a multiemployer plan.
Notices: Employers must timely notify individuals who become entitled to elect COBRA during the subsidy period of the subsidy’s availability and the option to enroll in different coverage (if permitted by the plan) by May 30, 2021
These are definitely heavy topics. If you have additional questions or concerns, please give us a call to discuss.