INSURANCE
SHARI FERGUSON J Macpherson Insurance & Financial Services , LLC
NEW LEGISLATION Affecting HEALTH INSURANCE
On April 1 , 2021 , the American Rescue Plan Act of 2021 went into effect . This was an Executive Order signed by President Biden to help Americans pay for health insurance premiums due to COVID-19 .
This new plan gives Advanced Premium Tax Credits ( or subsidies ) to those who previously did not qualify because they had a household income that was too high ( above 400 % of the federal poverty level or an income of $ 51,040 for a single individual with no dependents ). Those who did qualify for a subsidy may now qualify for significantly more assistance . The legislation guarantees access to a silver level plan with a $ 0 premium payment for people whose incomes are between 100 % and 150 % of the federal poverty level ( FPL ). Previously , they were required to spend approximately 2 % of their income .
All ACA-qualified plans ( nicknamed Obamacare ) are divided into metal levels – bronze , silver and gold . The bronze level has the lowest premium and highest deductible . This caused many to complain that they were paying a very high monthly premium and still had no coverage until they met their deductible . Silver level plans were the plans that the government hoped applicants would choose if they had a subsidy . But ,
because of the premium cost , many applicants were choosing a bronze level plan . Gold level plans have the highest premium and lowest deductible Effect on Seniors Many of the people in the age group of 60-64 could not qualify for a subsidy . Since the ACA law had increased premium by age bands , seniors were receiving the most expensive rates . As a result , some seniors had no major medical health insurance until they qualified for Medicare .
The effect on seniors was even greater if their household income crossed the 400 % federal poverty level . A 60-year-old female whose income was $ 50,000 would have paid no more than $ 410 at the beginning of 2021 ; however , the same individual making just $ 2000 more would have paid $ 957 for the same plan – twice as much !
Effect on Unemployed Individuals
For those who recently lost a job and are receiving unemployment insurance , this new legislation also expanded eligibility for subsidies . If an applicant is receiving unemployment insurance , they are treated as though their household income is no more than 138 % of the FPL . This qualifies them for silver level plans at $ 0 premium cost .
Many individuals who lose their job choose to enroll in their former employer ’ s COBRA ( Consolidated Omnibus Reconciliation Act of 1985 ) plan . Under the new plan , the premiums these individuals pay for their COBRA is 100 % subsidized .
The opportunity to enroll using the new subsidies started April 1 and will be available through August 15 . The law is available for 2021 and 2022 only .
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