Urgent: What You Need to Know About the New Health Insurance Subsidies

With the passage of the American Rescue Plan, Americans will be receiving increased health insurance subsidies across the board. This means lower premiums and bigger cost-sharing reductions for just about everybody – which translates to more money in our pockets.

But the expanded subsidies won’t last forever, and your premiums won’t go down automatically. Here’s everything you need to know about the new health insurance legislation, including how to calculate your expanded ACA subsidy and how to see your premiums go down right away.

1.) The ACA Premium Tax Credit (PTC, “Subsidy”) has been expanded

Under the new legislation, no individual or family will pay more than 8.5% of their household income towards a Marketplace plan through 2022.

The result is that people who already qualified for a health insurance subsidy will see that subsidy increase. In addition, people who did not used to qualify for the subsidy because of their income level will now be eligible.

Here’s how the new subsidy increases will affect most Americans, based on annual income and its relationship to Federal Poverty Level (FPL).

•  100-150% FPL: You will now qualify for some plans with a $0 monthly premium (if you didn’t already)
• 150-250% FPL: Your health insurance subsidy could increase by 50-70%
• 250-400% FPL: Your health insurance subsidy could increase by 30-50%.
• 400% FPL and up: The new legislation will cap your insurance costs at 8.5% of your annual income for Bronze and Silver-tier benchmark plans, which may qualify you for a subsidy depending on your income.

2.) Your Premiums May Go Down, But Not Automatically

If you’re enrolled in a Marketplace health insurance plan, then your increased subsidy will be automatically factored into your tax return next year. If you’re currently enrolled in an off-market health insurance plan, you will need to switch to a marketplace version of that plan in order to qualify.

If you want to have your expanded subsidy applied immediately so your premiums go down, you need to log into your health insurance account and update your application. In most cases, this is a simple request that can be made online; contact your Personal Benefits Manager if you’re not sure.

3.) The expanded subsidies only last for two years

The new expanded subsidies go into effect with a retroactive date of January 1st, 2021, and extend through 2022. It is unclear how much of these expansions, if any, will be made permanent.

If you know anyone who has been going without health insurance because they haven’t been able to afford it, this is a great time to sign up for a plan.

4.) Anyone who received unemployment in 2021 can get a $0 premium plan

According to the new rules, anyone who has received an unemployment benefit for ANY week of 2021 can now qualify for a $0 premium plan. Like the expanded subsidies, this additional benefit only lasts through the end of 2022.

5.) Extended health insurance Open Enrollment lasts until August 15th

If you still need to enroll in a health insurance plan for 2021, there’s still time. The COVID-19 Special Enrollment Period is set to last through August 15th. That’s the last day that you can sign up for a new plan and still have it go into effect this calendar year.

Even if you’re happy with your current health insurance plan, the Special Enrollment Period could be used to find something better or more affordable. And if you did not enroll through the government exchange and think you may now qualify for subsidies, definitely contact us so we can see if it makes sense for you to sign up for a new plan.

Fortunately there are more low-premium plans on the Marketplace than there were last year, and it never hurts to spend a few minutes with your advisor comparing rates. However, keep in mind that if you switch plans now, your deductible will start over.

Still have questions about health insurance, the American Rescue Act, or the new ACA subsidy? Talk to your Personal Benefits Manager

If you’re still unsure about how the expanded subsidies will affect you, call or email your Personal Benefits Manager, or just schedule a time on their calendar. We can help you calculate your new subsidy, switch to a more affordable plan, or even get you started in on a retirement strategy.

Remember, we’re here to help, so don’t hesitate to reach out.

Click here to schedule an appointment, or call 800-913-0172 to get started.    

To your health and wealth,

Wiley P. Long, III
President - HSA for America

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