Millions of Americans are eligible for healthcare savings under the American Rescue Plan
The highly-anticipated bill passed this week, opening up cheaper health insurance for low- and middle-income families as well as laid-off workers.
President Biden signed the American Rescue Plan of 2021 (ARP) into law on Thursday. The $1.9 trillion legislative package focuses on pandemic relief, with a string of health policy provisions that are set to make healthcare more accessible and affordable for millions of Americans.
Among its many reforms, the American Rescue Act aims to cut the cost of health insurance so that more people can insure themselves during the national health emergency.
But most of the provisions are temporary, which is why it’s important to make the most of any that apply to you.
Lowers COBRA premiums for laid-off workers
Under COBRA, people who have lost their jobs can hold onto the health insurance policy they had with their former employer for 18 to 36 months. It also applies to those who have involuntarily had their hours reduced.
Normally, those individuals have to pay 100% of the premiums — but the ARA cut this down to just 15%.The program starts on April 1st and ends on September 30th.
The bill also requires employers to not only update qualifying employees about the program but expedite the process.
If you’re eligible for COBRA coverage, you can enroll through your workplace’s HR or benefits department.
Boosts tax credits to buy coverage on the Health Insurance Marketplace
Thanks to the ACA, US citizens can shop for subsidized health insurance through the Health Insurance Marketplace, and eligible applicants can use tax credits to help pay for their policies. Previously, you would qualify if your income was between 100% and 400% of the federal poverty level — or $12,880 to $51,520.
But the bill has done away with that requirement and increased the amount of premium tax credits available to people across all income levels until 2022. By getting rid of the “subsidy cliff,” it opened up health insurance to middle-income people who were earning a little more than the cutoff.
It’s based on a sliding scale. If your income is between 100% to 150% of the federal poverty level, the government will pay for your premiums on marketplace plans. And on the other end of the scale, if your income is above 400% of the federal poverty level, you won’t cough up more than 8.5% of your income on health insurance. Finally, those who are receiving unemployment benefits in 2021 are eligible for the highest amount of tax credits.
To put these numbers into context, the average cost of a marketplace plan is $5,544 a year.
When to enroll in a Marketplace plan
You can sign up for a marketplace plan through Healthcare.gov during Open Enrollment, which runs from November 1st to December 15th in most states. California, Colorado, District of Columbia, Massachusetts, Minnesota, Nevada, New Jersey, New York, Pennsylvania and Rhode Island have longer Open Enrollment periods.
And if you’ve gone through a major life change that’s considered a “qualifying event” — like switching jobs, getting married or moving — you’re eligible for a Special Enrollment Period.
Together, these changes to the Marketplace are expected to extend coverage to 800,000 uninsured Americans in 2021 and 1.3 million in 2022, according to the Congressional Budget Office.
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