Updates on Your Individual Health Insurance

The White House stated, “President Biden is laying out the first step of an aggressive, two-step plan for rescue, from the depths of this crisis, and recovery, by investing in America, creating millions of additional good-paying jobs, combatting the climate crisis, advancing racial equity, and building back better than before.”

On March 11, 2021 President Biden signed the American Rescue Plan. This is step one of the President’s two-step plan to build a bridge to economic and social recovery from the impact of COVID-19. The Plan addresses a broad range of topics including stimulus checks, school reopenings, small business grants, and much more. This legislation is packed with details that will affect the American people in numerous ways. Let’s take a moment to highlight a few pieces of this legislation that are centered on access to health insurance.

• The American Rescue Plan will lower or eliminate health insurance premiums for millions of lower and middle-income families enrolled in health insurance marketplaces. This will help well over a million uninsured Americans gain coverage.
• A family of four making $90,000 could see their monthly premium come down by $200 per month.
• The American Rescue Plan provides a 100% federal continuation health coverage (COBRA) subsidy through September 1, ensuring that those who lose their jobs or lose their health care due to reduced hours don’t lose their health care. (whitehouse.gov)

A major impact of this new law will be felt by the people who are purchasing their health insurance through HealthCare.gov. It is expected that tax credits (also referred to as subsidies) will increase for all recipients, in all income categories, making a significant impact on affordability across the board. The new law creates a rule that individual insurance premiums should not exceed 8.5% of a household’s income. This is a massive change from previous calculations that excluded anyone making more than 400% of the Federal Poverty Level from receiving any assistance with the cost of health insurance. In addition to increased financial assistance, there is a Special Enrollment Period being granted for all individuals in 2021 allowing applications until 8/15/2021. This design is intended to provide more Americans with access to affordable health insurance than ever before.

It is important to note these increases in financial assistance and subsequent reductions in monthly costs will not be generated automatically. HealthCare.gov will require deliberate, specific action to update accounts and it is important to understand the options and results. If no action is taken the additional tax credits will be applied when the individual files their 2021 taxes.

As the laws and rules continue to change around individual health insurance, please make sure you are working with a licensed agent. I am happy to partner with The Starr Group to provide the confidence and service you’ve come to expect from the best. Do not hesitate to reach out if you have any questions.