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American Rescue Plan delivers $0 Silver premiums to unemployed

Legislation signed today provides substantial premium tax credits and cost-sharing reductions to Americans receiving unemployment benefits

A major provision of the American Rescue Plan (which became law today) ensures that most Americans who receive at least one week of unemployment compensation at any time in 2021 will be able to buy a Silver health plan with $0 premiums. | Image: deagreez / stock.adobe.com

Reviewed by our health policy panel.

Although the American Rescue Plan (ARP) is about far more than just healthcare, it’s the most significant improvement to healthcare access and affordability since the Affordable Care Act.

We’ve already talked about how the new law – passed by Congress this week and signed by President Biden today – will boost premium subsidies for most marketplace enrollees in 2021 and 2022 and also protect people from having to repay excess premium subsidies from last year.

But another important provision in the legislation will provide substantial premium tax credits (premium subsidies) and cost-sharing reductions to Americans who are receiving unemployment benefits at any time this year.

EDIT: The specifics of the additional financial assistance are detailed below. CMS has confirmed that the additional health insurance subsidies for people receiving unemployment compensation in 2021 will be available on HealthCare.gov as of July 2021. HealthCare.gov is used in 36 states. The other states, which run their own marketplaces, are debuting this benefit on varying schedules as their software and systems allow (ranging from as early as March 29 in DC, to as late as July or August in several states).

The premium subsidies are retroactive to the start of the year, so people who receive unemployment compensation this year will be able to claim the additional subsidies for the first several months of the year when they file their 2021 tax returns (assuming they were enrolled in marketplace coverage during that time). But eligibility for robust cost-sharing reductions will depend on the marketplace being able to disregard income over 133% of the poverty level for people who are receiving unemployment compensation, and that won’t be available until the summer in most states.

Full premium subsidies + strongest level of cost-sharing reductions

Section 9663 of the American Rescue Plan ensures that most people who receive at least one week of unemployment compensation at any time in 2021 will be able to obtain a Silver plan with $0 premiums. And Section 2305 ensures that the Silver plan will also include cost-sharing reductions that bring the actuarial value of the plan to 94% (which is superior to the actuarial value of a Platinum plan).

In both cases – for determining the premium tax credit amount and cost-sharing reduction eligibility – the exchange will disregard any income above 133% of the poverty level.

The enhanced premium subsidies in the American Rescue Plan result in $0 benchmark plan premiums for buyers with income up to 150% of the federal poverty level. So people receiving unemployment compensation will end up in that category, since their counted income will be capped at 133% of the poverty level.

(Note that there are some states that require abortion coverage on all plans, and some states where all of the insurers voluntarily include abortion coverage in their plans. In these states, after-subsidy premiums cannot be less than $1/month, and are sometimes slightly higher than that. Nothing about this has changed with the American Rescue Plan, which means that there are a few states where people receiving unemployment compensation in 2021 will still pay a nominal premium for a silver plan.)

And although there are three levels of cost-sharing reductions, the strongest – which result in added benefits that make Silver plans more robust than regular Platinum plans – are available to people who earn no more than 150% of FPL. Since counted income will be capped at 133% of the poverty level for people receiving unemployment compensation, all of the available Silver plans will have the strongest level of cost-sharing reductions built into their benefits.

In order to qualify for the enhanced premium tax credits and cost-sharing reductions, applicants only need to receive (or be approved to receive) unemployment compensation for at least one week in 2021. The legislation states that eligible enrollees will have to attest to the fact that they’re receiving or have received unemployment compensation this year, and that HHS will issue guidance clarifying what documentation will have to be submitted to the marketplace as proof.

The enhanced premium subsidies and cost-sharing reduction benefits are then potentially available for the remainder of 2021. But this will depend on whether you again become eligible for employer-sponsored health insurance that’s considered affordable and provides minimum value.

If you do, you’ll no longer be eligible for premium subsidies or cost-sharing reductions, since those are never available for months that a person is eligible for affordable employer-sponsored coverage that provides minimum value (regardless of whether the person is enrolled in the employer’s plan or not). That would also extend to family members who are eligible to enroll in the employer-sponsored plan, as the American Rescue Plan does not, unfortunately, address the family glitch.

Provides assistance to people who would otherwise be in the Medicaid coverage gap

Under the ARP, a person who receives unemployment compensation in 2021 is considered an “applicable taxpayer” for purposes of ACA Section 36B, which determines premium subsidy eligibility.

This means that a person who is receiving unemployment compensation but whose income is still low enough to be in the Medicaid coverage gap would be eligible for a $0 premium silver plan in 2021 (The Medicaid coverage gap still exists in 14 states; this will drop to 12 states once Oklahoma and Missouri expand Medicaid eligibility this summer.)

The ARP also encourages those remaining states to expand Medicaid. It provides two years of additional federal Medicaid funding to states that newly expand eligibility as called for in the Affordable Care Act.

Enrollment window is opportunity to take advantage of subsidies

From now through August 15, Americans can take advantage of an enrollment window that’s part of the Biden administration’s efforts to address the ongoing COVID pandemic (note that some states that run their own exchanges — as opposed to using HealthCare.gov — have different rules and deadlines for their COVID-related enrollment window in 2021). So if you’re uninsured and receiving unemployment benefits (or if you’ve received them at any point this year and do not have access to an employer-sponsored plan), you can sign up for health coverage through your state’s marketplace and take advantage of the financial assistance provided by the American Rescue Plan.

In nearly every state, people who are already enrolled in a health plan through the marketplace can also use this window to switch plans.

But what if you’re in a state with a state-run marketplace that is only allowing people who don’t already have marketplace coverage to enroll during the COVID-related enrollment window? You should still be able to switch to a Silver plan (if that’s your choice), as becoming newly eligible for cost-sharing reductions is a qualifying event that will allow you to replace your existing non-Silver plan with a Silver plan that includes cost-sharing reductions.

What if you’re eligible for Medicaid?

It’s important to understand that Medicaid eligibility is not affected by the change in how income is counted for people who are receiving unemployment compensation this year.

ARP Section 9663 temporarily adjusts the rules relating to ACA Section 36B (premium tax credits) and ARP Section 2305 temporarily adjusts the rules relating to ACA Section 1402 (cost-sharing reductions). In both cases, the legislative text that disregards income above 133% of FPL for 2021 is clear in noting that it’s “for purposes of this section,” meaning that the person’s income above 133% of FPL would not be disregarded for other purposes, such as determining Medicaid eligibility, Basic Health Program eligibility (in New York and Minnesota), or whether an offer of employer-sponsored coverage is considered affordable.

If a person is eligible for Medicaid based on their regular ACA-specific modified adjusted gross income, they would continue to be eligible for Medicaid in 2021 even if they’re receiving unemployment compensation. In states that have expanded Medicaid, eligibility for adults under the age of 65 extends to 138% of the poverty level (133% plus a built-in 5% income disregard). This could potentially cause some confusion in terms of the financial assistance for which people are eligible if they’re receiving unemployment compensation in 2021. But the crux of the matter is that the externally imposed temporary income cap of 133% of the poverty level does not apply for the determination of Medicaid eligibility, whereas it does apply for the determination of premium subsidies and cost-sharing reductions.

And as was the case in 2020, the additional COVID-related federal unemployment benefits (which have been extended through September 6) are not counted as income when determining eligibility for Medicaid.

So a person in a state that has expanded Medicaid will still be eligible for Medicaid in 2021 with an income of up to 138% of FPL. (That amounts to $17,774 for a single person in 2021.) As always, anyone eligible for Medicaid is not eligible for premium subsidies or cost-sharing reductions; this continues to be true for people receiving unemployment compensation at some point in 2021.

And a person in New York or Minnesota who is eligible for Basic Health Program coverage (the Essential Plan in New York; MinnesotaCare in Minnesota) will continue to be eligible for that coverage (as opposed to $0 premium silver plans in the marketplace) even if they receive unemployment compensation at some point this year. But there are premiums associated with Basic Health Program coverage.


Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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Austin
Austin
2 months ago

Thank you! You answered many questions I have had since the bill passed.

Carolyn
Carolyn
2 months ago

I feel like there’s gotta be more to the $0 premium/94% CSR. If one spouse is on unemployment and the other makes $100k, are they still going to qualify at 133% of FPL?

Louise Norris
Editor
2 months ago
Reply to  Carolyn

The text of the legislation says “there shall not be taken into account any household income of the taxpayer in excess of 133 percent of the poverty line for a family of the size involved.” So yes, it would apply to the whole family in that case.
But it’s also fairly uncommon for a person to be earning $100k and not eligible for any sort of employer-sponsored health coverage. If the spouse has access to employer-sponsored coverage, they wouldn’t be eligible for subsidies at all. And if the other spouse (the one receiving unemployment benefits) is eligible to be added to their spouse’s employer-sponsored health plan, they would also be ineligible for subsidies — even if they haven’t enrolled in the employer’s plan, and regardless of how much it would cost to do so.

Kevin
Kevin
2 months ago
Reply to  Louise Norris

So the American Rescue plan does not cover the Obama Family glitch? I am on unemployment and my wife works. She is not a high earner. She pays $75 a week for her health insurance that meets all the requirements of the Affordable Care Act. I was told by her employer last year that they do not contribute to the spouse’s premium since they are not mandated to. They told me it was the “family glitch” and if I wanted to be on her plan it was $810 a month. They also told me if I go into the marketplace I am also ineligible for subsidies since I have access to this plan that meets ACA requirements. So am I S.O.L.? This is expensive when you are on unemployment.

Louise Norris
Editor
2 months ago
Reply to  Kevin

Unfortunately, the American Rescue Plan does not fix the family glitch. And in the situation you’re describing, the family glitch would continue to apply, and would continue to prevent you from receiving premium subsidies. Here’s more from Health Affairs: https://www.healthaffairs.org/do/10.1377/hblog20210311.725837/full/
In this case, it might make more sense for your wife’s employer to not offer spousal coverage at all, especially since they know they’re forcing people into a “family glitch” situation. But it’s possible that the Biden administration or Congress could fix the family glitch with future regulations or legislation.

Kevin
Kevin
2 months ago
Reply to  Louise Norris

Thank you for your response. This is such a shame. In this bill they extending subsidies to those on unemployment. However, the way it is now with the “family glitch” I will not get affordable healthcare anywhere. I am wondering if somehow I can get subsidies for the market place and pay the difference in the premium when it is determined I had access to my wife’s ACA compliant plan at the full premium price. What I don’t want to happen is pay full market price while I am on unemployment and then down the road the gov’t makes change and say “ok, those on unemployment get a subsidy” It’s just like the $10.200 unemployment tax break given at the last minute after people already filed.

Marshawn Harris
2 months ago

Covered CA does not sell $0 premium silver plans. The lowest possible silver plan premium is $1. Here is a link to more information on Covered CA:
 new American Rescue Plan FAQ document.

Louise Norris
Editor
2 months ago

This is because California is one of the states that requires all health plans to cover non-Hyde abortion services: https://www.healthinsurance.org/faqs/do-health-insurance-plans-in-acas-exchanges-cover-abortion/
Insurers are required to charge at least $1/month for this (even though it doesn’t cost that much to provide the coverage) and premium subsidies cannot be used to cover that portion of the premium.

Kevin
Kevin
2 months ago

Reply to  Kevin
“Unfortunately, the American Rescue Plan does not fix the family glitch. And in the situation you’re describing, the family glitch would continue to apply, and would continue to prevent you from receiving premium subsidies. Here’s more from Health Affairs: https://www.healthaffairs.org/do/10.1377/hblog20210311.725837/full/
In this case, it might make more sense for your wife’s employer to not offer spousal coverage at all, especially since they know they’re forcing people into a “family glitch” situation. But it’s possible that the Biden administration or Congress could fix the family glitch with future regulations or legislation”.

I am at my wits end trying to find a way to get a subsidy. My question is if my wife’s employer stops offering spousal coverage how is the subsidy amount determined? Is it still by household income?

Louise Norris
Editor
2 months ago
Reply to  Kevin

I’m not sure whether your wife’s employer would be able to make that sort of change mid-year even if that’s something they want to do — they may have to wait until the start of their next plan year.
But if they didn’t offer spousal coverage, you’d potentially be eligible for subsidies in the marketplace. I say “potentially” because it would still be based on total household income. Assuming you’re the only household member applying for marketplace coverage, they’d be looking at the premium for just you and comparing it with your total household income. Here’s the math on how the subsidy itself is calculated: https://www.healthinsurance.org/faqs/is-the-irs-saying-ill-have-to-pay-more-for-my-health-insurance-next-year/ (note that subsidy eligibility is more generous than usual for 2021 and 2022, so there are people who qualify for subsidies during this period even though they normally do not).
But sometimes a person hit by the family glitch would end up not qualifying for subsidies *even if the family glitch didn’t exist* simply due to the fact that the whole household’s income would be used to determine subsidy eligibility. It’s similar to how subsidy eligibility works when one spouse is on Medicare and the other is in the marketplace, as outlined here: https://www.verywellhealth.com/obamacare-subsidies-change-with-family-size-4065153

Jackie
Jackie
2 months ago

When you say “switch plan” — does this mean you can switch the insurance provider or just migrate between plans (assuming you are already on the exchange in a plan). For instance, can you switch from Blue Cross Bronze to Aetna Silver? Or are you required to stay with Blue Cross?

Louise Norris
Editor
2 months ago
Reply to  Jackie

If you’re enrolled in a plan through HealthCare.gov, you can switch to any other available plan you like during the COVID-related enrollment period. Some of the state-run exchanges are currently offering more limited enrollment windows, however, and may not allow current enrollees to make plan changes without a qualifying event.

But if you’ve already spent any money in out-of-pocket costs this year, you’ll want to check with your insurer to see how they’re handling plan changes during the COVID-related enrollment window. Some insurers have said that they’ll allow people to carry over their deductible and out-of-pocket costs to a new plan, as long as it’s another plan offered by the same insurer. For example, if you have a Bright Health bronze plan, you want to switch to a Bright Health silver plan, and you’ve already spent $1,000 towards your deductible, Bright Health has said that they’ll credit that deductible spending on your new plan. Several other insurers have said the same thing, but it’s not universal and insurers are not required to do this. If your insurer is offering this, however, and if you’ve had out-of-pocket spending so far this year, it might be in your best interest to transition to another plan offered by your current insurer.

Jackie
Jackie
2 months ago
Reply to  Louise Norris

Very helpful – thank you!

Lorri
Lorri
2 months ago

My hypothetical. I am on unemployment currently with a few temp jobs so far in 2121. On ACA bronze. I hope to secure a job but no health insurance offered so on ACA. With unemployment benefits and future income in 2121 will I pay aca premiums base on total income. Say 65-70,000 at 8.5 of income or will my ACA insurance be free for the year?

Louise Norris
Editor
2 months ago
Reply to  Lorri

You’d still qualify for the $0-premium silver plan for the full year, as long as you don’t get an offer of coverage from a new employer. For the purpose of determining subsidy eligibility, Since you’re receiving unemployment compensation at some point in 2021, Section 9663 of the ARP effectively caps your countable income at a level that makes you eligible for the full subsidy, regardless of how much you actually earn.

You might want to consider switching to a Silver plan in order to get the full benefit. If you’re in a state that uses HealthCare.gov, the government has said the system will be updated to reflect the $0-premium benchmark (Silver) plan by July: https://www.cms.gov/newsroom/press-releases/2021-special-enrollment-period-access-extended-august-15-healthcaregov-marketplace-coverage (you can enroll in it before then, but the additional subsidy amount wouldn’t be incorporated yet, and you might have to recoup it on your tax return once the year is said and done). You’ll want to check with your insurer before making any changes, to see if any out-of-pocket costs you’ve already incurred this year could be transferred to a new Silver plan.

Kateryna Shahnewaz
Kateryna Shahnewaz
2 months ago

I just applied at healthcare.gov. We are 2 unemployed and they count all our income: 133% was completely disregarded. Tried to talk to manager and she do not want to talk and said to file the appeal. So, should you file appeal just to get benefits for which you eligible by Law?

Louise Norris
Editor
2 months ago

Unfortunately, this isn’t going to be available in realtime on HealthCare.gov until July: https://www.cms.gov/newsroom/press-releases/2021-special-enrollment-period-access-extended-august-15-healthcaregov-marketplace-coverage
You’ll be able to claim the additional premium tax credit on your 2021 tax return for months prior to that, if you’re able to pay the premiums yourself between now and then.

Lyne
Lyne
2 months ago

Both my husband and I lost our jobs during Covid and qualified for unemployment benefits. As we are both in our early 60’s we decided to semi retire and started collection our pensions and social security benefits. Our total income is at the 400% poverty level. Do we have to include the pension income and social security income when we are applying for 2021 marketplace health insurance? Please let us know. Thank you. Lyne

Louise Norris
Editor
2 months ago
Reply to  Lyne

We advise that you consult with a tax advisor who can provide more specific feedback based on your financial situation. But for general background, here’s how income is calculated under the ACA: https://www.healthinsurance.org/glossary/modified-adjusted-gross-income-magi/ Social Security income does get included. The pension income is also included, assuming it’s taxable.
Depending on where you live and the cost of coverage in your area, you can still qualify for premium tax credits in 2021 even if your income exceeds 400% of the poverty level, since the American Rescue Plan has temporarily eliminated the “subsidy cliff” that normally exists at 400% of the poverty level: https://www.healthinsurance.org/obamacare/beware-obamacares-subsidy-cliff/

Kevin
Kevin
2 months ago

Any news if POTUS is going to fix the family glitch?

Sage
Sage
2 months ago
Reply to  Kevin

Kevin, have you checked to see if $801/month is “affordable” for your family? I don’t know what the criteria are for that, but it sounds really high.

Louise Norris
Editor
2 months ago
Reply to  Sage

Unfortunately, affordability is not based on the whole family’s premium. They only consider the cost of the employee’s coverage (without adding a spouse or dependents) versus the household income. The cost to add family members is not taken into consideration. This is known as the “family glitch:” https://www.healthinsurance.org/obamacare/no-family-left-behind-by-obamacare/

Sage
Sage
2 months ago

I’m self-employed, and receive UI benefits during stretches of low or no income. So I’ll qualify for the <133% income subsidy. This would entitle me to a free silver plan with the cost-sharing reduction. Great! However, I’ve had a bronze HSA-eligible plan since Jan. 1, and I contributed the full HSA amount already, back in January. I assume that, if I switched to a silver plan, that would count as an over-contribution to my HSA. True? How would I reconcile that? Thank you.

Louise Norris
Editor
2 months ago
Reply to  Sage

Yes, this is a tricky situation. But as long as you withdraw the excess contributions (and any investment or interest earnings they generated) before you file your 2021 tax return, you won’t be subject to any penalties: https://www.irs.gov/publications/p969#en_US_2020_publink1000204078
You’ll be able to prorate your HSA contribution for 2021. So if you switch to a $0 premium silver plan as of July, for example, you would still be able to leave half your HSA contribution for 2021 in the account, and would need to withdraw the other half.
We recommend that you speak with a tax advisor to be sure you’re following all applicable rules with this, and accounting for any other financial implications this might have.

Sharon
Sharon
1 month ago

I’m on unemployment and am enrolled in a silver plan. My husband has a bronze plan, he’s self employed so no employer insurance option. Is he eligible for a no cost silver plan? Also will the deductibles be lowered for the silver plan – mine is $1200. Thank you.

Louise Norris
Editor
1 month ago
Reply to  Sharon

Our understanding is that with your unemployment compensation, you’ll have the option to enroll both of you together on a $0 premium silver plan with full cost-sharing reductions. If you’re currently not on the highest level of cost-sharing reductions (ie, if the income you initially projected for 2020 was more than 150% of the poverty level), you should see your out-of-pocket costs drop once the new plan is processed, since you’ll bump up to the most robust level of cost-sharing reductions.
HealthCare.gov will have details available in July, but if you’re in a state that runs its own marketplace, the $0 premium silver plans for people receiving unemployment may be available before then.

Jim
Jim
1 month ago

Thank you. What are my next steps at this point? I have a marketplace bronze plan now and am receiving unemployment until end of June. Do I switch to a silver plan now or wait until July When the silver plans on the healthcare.gov site reflect the changes made by the American Rescue Plan? Thanks for your help and expertise.

Louise Norris
Editor
1 month ago
Reply to  Jim

It’s up to you. If you switch to a silver plan now, you’ll eventually be able to recoup the full amount of the premium tax credit when you file your 2021 tax returns. But CSR is only provided in real-time, and it’s going to be July before HealthCare.gov’s system will be set up to provide that to people who are eligible due to unemployment compensation.
It won’t matter that your unemployment compensation is ending in June – you’ll still qualify for the full subsidies and CSR for the whole year, unless you become eligible for an employer-sponsored plan (if you do, the subsidies and CSR would end at that point, but it wouldn’t affect any subsidies you had received prior to that point in 2021).
We’ve heard from some folks who have changed their income in the system to be just above 138% of the poverty level in order to qualify for the enhanced subsidies and CSR right away. But that may be problematic, since the marketplace is still likely to require income documentation if the income you enter is very different from what they have on file (via tax returns, prior year enrollments, etc.).

Jim
Jim
1 month ago
Reply to  Louise Norris

Thank you Louise. Many of us out here appreciate your work and guidance greatly. Best

Jim
Jim
1 month ago
Reply to  Jim

If I switch from bronze to silver now, come July can I make an adjustment or apply again through healthcare.gov to get the full benefits of Subsidies including car due to my receiving unemployment. Thanks again for your time and expertise.

Louise Norris
Editor
1 month ago
Reply to  Jim

Thanks, Jim! Yes, CMS has said that there will be an opportunity to update existing coverage in July: https://www.cms.gov/newsroom/fact-sheets/extended-access-opportunity-enroll-more-affordable-coverage-through-healthcaregov At that point, you’ll be able to follow the instructions they provide in order to claim the full premium subsidy and cost-sharing reductions for the remainder of the year.
And when you file your 2021 tax return, you’ll also be able to recoup any extra premium subsidy that’s owed to you for January – July, assuming you’ve been on a marketplace plan all year (but if your subsidy was already large enough to cover the full cost of your bronze plan, there would be no additional subsidy for months that you had the bronze plan; the subsidy can’t ever be larger than the cost of your plan).

Andrea
Andrea
1 month ago

Hi, I’ve a question I don’t see yet addressed here. I’m in WA State. Own an S Corp thru which I am able to secure private health insurance via Premera as a “group of one.” And to get this coverage, i must (and do) work thru an Insurance broker. I am also getting Pandemic Unemployment Insurance (PUA) as a self-employed person, not PEUC benefits. Do I or might I qualify for enhanced premium tax credits and cost-sharing reductions under Section 9663 of the American Rescue Plan? If you are not sure, how might I find out? thank you!

Louise Norris
Editor
1 month ago
Reply to  Andrea

You should qualify for the $0 premium silver plan through Washington Healthplanfinder (it might actually be $1/month instead, since Washington is a state that mandates abortion coverage, and premium subsidies can’t be used to cover that). But you’d need to switch plans, as it would be in the individual market rather than the group market. Washington Healthplanfinder has said that the reduced premiums for people receiving unemployment benefits will be available on their site next month and reflected on June invoices: https://www.wahbexchange.org/washington-healthplanfinder-is-extending-special-enrollment-period-for-washingtonians-seeking-health-coverage-through-august-15-2021/

Although the out-of-pocket costs are quite low for people who select the $0 premium Silver plans due to unemployment compensation, you’ll still want to check with your broker or your insurer to see whether any out-of-pocket costs you’ve already incurred this year could be transferred to the new plan, assuming you pick another Premera plan. (Keep in mind that there are going to be two $0 premium — or $1 premium — silver plans available: The lowest-cost option and the second-lowest-cost option. If neither is offered by Premera, you would have at least some monthly premium involved if you pick a plan from Premera. But the full cost-sharing reductions would apply to any plan, meaning that you’d have the 94% actuarial value and associated low out-of-pocket costs regardless of which silver plan you pick.)

Andrea
Andrea
1 month ago
Reply to  Louise Norris

Thank you, Louise! I appreciate this detailed response.

Jerry
Jerry
1 month ago

I was on a Silver 94 plan in California through Covered California, from Jan-Apr of this year. When I updated my income projection for this year to include unemployment income, I was moved to a SIlver 87 plan starting in May, with slightly less-good CSR. I understand that eventually my premiums will be adjusted to $1 per month for all 12 months, but will the Silver 87 plan under the law also be changed back to Silver 94, or will the CSR under Silver 87 remain in place? Also – the law says income above 133% FPL is to be disregarded, but in California, it must be above 138% to be eligible for a marketplace plan and not Medi-cal — has that issue been adjusted for California? Thanks for all your help to us all on here.

Last edited 1 month ago by Jerry
Louise Norris
Editor
1 month ago
Reply to  Jerry

Jerry,
Yes, your plan should be adjusted back to the Silver 94 once Covered California’s system is updated to reflect the additional assistance for people receiving unemployment compensation. Covered CA says this will happen this summer: https://www.coveredca.com/arp/financial-help/faqs/ That’s roughly the same time frame that we’re seeing in most states; it’s a bigger programming task than the other subsidy changes, so it’s taking longer to implement.
And yes, the numbers will be adjusted to ensure that you’re subsidy-eligible and not Medi-Cal eligible. Most states, including California, have expanded Medicaid under the ACA. The expansion guidelines are technically 133% of the poverty level, but with a built-in 5% income disregard. That essentially brings the Medicaid eligibility limit to 138% of the poverty level, which is the case in the majority of the country. But 133% is still often referenced, as in the case of the American Rescue Plan. The marketplaces will account for this, and will adjust subsidy eligibility accordingly (but if a person’s income, including unemployment benefits, is Medicaid-eligible, they’ll still be Medicaid-eligible under the American Rescue Plan)

Jerry
Jerry
1 month ago
Reply to  Louise Norris

Thanks very much for that clarity.

Gale
Gale
14 days ago

Given that California isn’t updating their site to reflect the subsidies/CSR for the unemployment benefit until the summer (July or August), what if you switch to a silver Plan (87 or 70) that has higher (significantly more than 94) co-pays/deductibles etc starting June & then you use the plan before they update with UI changes?

I understand that the premiums will be retroactively adjusted, but is there any word if the co-pays, etc. might also be retroactively adjusted? In some cases, it’s significant–for instance, if you get bloodwork & and imaging (CT/PET Scan or MRI) on Silver 87, the co-pays would practically exceed the entire individual deductible for Silver 94. So, when you eventually get switched to 94, will they just consider the deductible fully met based on what you’ve paid on the 87 plan or will they retroactively adjust those co-pays to a 94 plan since they’ll be retroactively adjusting the premiums to a 94 plan?

Louise Norris
Editor
14 days ago
Reply to  Gale

Covered California announced this week that they expect to have the subsidies/CSR benefits related to unemployment compensation up and running by next month: https://www.coveredca.com/newsroom/news-releases/2021/05/26/covered-california-urges-sacramento-stockton-and-modesto-residents-to-enroll-by-may-31-to-save-money-with-lower-health-insurance-premiums-now-available-through-the-american-rescue-plan/

I’ve reached out to Covered California to see if they might have any provision to retroactively adjust out-of-pocket costs for people who enroll in Silver plans before the system is updated. They are looking into it and I’ll update this space when I get more information.

Tina
Tina
9 days ago
Reply to  Louise Norris

Hi Louise! Really great info and dialog! Thanks so much for sharing for your insight and expertise.

Similar question if you are enrolled in a Silver Program through Healthcare.gov today and are presently unemployed.

I am in Arizona, and just enrolled on 5/31/21 for coverage with Ambetter effective 6/1/21. My husband is self employed and still has income, but no insurance as he was on my former plan, and is now on the Silver plan I just bought.

So, that said, how would anything we might pay for under our Silver plan today, with no CSR, be accounted for when the new CSR’s for the unemployed kick in in July? I understand how the difference in Premium will be accounted for when we file our 2021 taxes, but am less clear for how anything paid without any CSR will be retroactively reconciled once one becomes eligible for the CSR in July?

Finally, do you have any insight as to when the new reduced premiums and enhanced CSRs relative to unemployment will be applied? Will they be reflecting on Healthcare.gov in June for coverage July forward, or will they be available in July, for coverage August forward? Thanks in advance for you time and expertise. I truly appreciate you, all you do and the helpful and accurate info you provide 🙂

Louise Norris
Editor
9 days ago
Reply to  Tina

Those are great questions, Tina, and we don’t have clear guidance on all of it at this point. But to the best of our knowledge, here’s what to keep in mind:

The extra subsidies and CSR for people receiving unemployment compensation will not be automatically applied; you’ll need to log back into your marketplace account and update your enrollment to activate them.

We expect this to become available in July, so it should affect your invoices for August premiums, as long as a person completes the subsidy redetermination in July. But the timeframe might change between now and then.

Although the additional subsidies are retroactive to January and can be claimed on your 2021 tax return, there is nothing that requires retroactive CSR benefits. It’s possible that some insurers might go back and reprocess claims for people who were on Silver non-CSR plans before the new benefits take effect (and thus generate refunds from providers who already received payment from the patients), but that’s not required and may or may not end up being likely.

For non-urgent care, it might be beneficial for enrollees in your situation (ie, on a Silver plan that doesn’t have CSR, but eligible to switch to the CSR version this summer) to wait to schedule services until after the enrollment has been updated to reflect the CSR benefits.

Last edited 9 days ago by Louise Norris
Tina
Tina
9 days ago
Reply to  Louise Norris

Wonderful, Louise! Thanks so much for your reply and for your guidance.

Also, any idea how we (meaning those who have policies today via the Marketplace as well as the General Public) will be notified when the additional subsidies and CSR for those receiving unemployment compensation are reflecting on healthcare.gov so we can update our applications in a timely manner?

Thinking there might be a big press push, but also interested in your thoughts as to what the communication plan might be. I see that the Unemployment variable is reflecting on the KFF calculator, and has been for a while, but with such limited information available on the actual Healthcare.gov site or through their team members, I am concerned and don’t want to miss the opportunity to secure the additional premium and CRS savings as it can really add up. Thanks again for your time and your expertise. Given the dearth of details surrounding this specific provision of the ARPA, you have been a shining beacon and your efforts to inform and educate are deeply appreciated 🙂

Louise Norris
Editor
8 days ago
Reply to  Tina

Thank you for your kind words! I’m glad my writing has been useful on this. My guess would be that we’ll see a press release from CMS once the additional subsidies become available, so you might want to watch this page: https://www.cms.gov/newsroom
If the subsidies become available in early July (as CMS has previously indicated will be the case), subsidy redeterminations completed anytime in July should result in the new subsidies being applied as of August, so you should have a good window of time to get this done with the earliest possible effective date.

Tina
Tina
8 days ago
Reply to  Louise Norris

Wonderful! Thanks again for you time, guidance and expertise, Louise. I truly appreciate it! Take good care and have a great rest of the week!

Louise Norris
Editor
55 seconds ago
Reply to  Louise Norris

Checking back in here with an update. Covered California has confirmed that they WILL NOT be able to provide retroactive cost-sharing reductions for people receiving unemployment compensation. This is the case in general in other states as well (an insurer could choose to offer this, but it’s doubtful that many would do that, as it would require all earlier claims from 2021 to be reprocessed).

Insurers in California will credit already accrued deductible and out-of-pocket expenses to the new plan, as long as the person stays with the same insurer: https://www.healthinsurance.org/blog/are-accumulators-making-you-think-twice-about-switching-health-plans/ But there won’t be any provision to refund people in the situation you’re describing above. However, the deductible/MOOP would be met right from the beginning in that scenario, as they will transfer over from the plan the person had earlier in the year.

Joe
Joe
7 days ago

Louise, this article and your other ACA articles are so very helpful! I am pretty well read on the ACA and how subsidies and the 400% subsidy cliff work. But I still have a couple of questions.

  1. I am retired and my wife is on unemployment, which means we are eligible for a $0 premium of the 2nd lowest Silver plan. Last year and so far this year, we have used a Bronze plan, keeping under the 400% cliff. We want to stay with the same Bronze Plan, since the 2nd lowest Silver plan does not have the healthcare providers we have used for many years (my wife has had cancer twice). Would we still be eligible for the $0 BRONZE plan, instead of the 2nd lowest Silver plan? (the bronze plan has a lower premium than the 2nd lowest Silver so common sense says ‘yes’, but I want to know for sure rather than assuming)
  2. Although I have no earned income or pension, I would be moving money from my traditional IRA to my Roth IRA in 2021, which counts as taxable income. With my wife on unemployment, would I still be able to move say around $160,000 of taxable income?
Louise Norris
Editor
7 days ago
Reply to  Joe

Thank you, Joe! I’m glad my writing has been helpful. The American Rescue Plan has eliminated the subsidy cliff for 2021 and 2022, so subsidies are available even for people who go above 400% of the poverty level (if they would otherwise have to pay more than 8.5% of household income for the second-lowest-cost silver plan). Here’s more about that: https://www.healthinsurance.org/obamacare/beware-obamacares-subsidy-cliff/

Yes, you can get a $0 bronze plan if it costs less than the second-lowest-cost silver plan. Once you’re able to claim the enhanced subsidies based on unemployment compensation, you can apply that subsidy to any plan you like, and it works just like premium subsidies normally work. So if the plan you’re selecting costs less than the amount of the subsidy, you’ll have a $0 premium. (Depending on where you live, you may already be able to claim the subsidies related to unemployment compensation, or you may have to wait until July.)

Given the tax implications of your second question, I’d advise consulting with a tax professional just to be sure you’re covering all your bases. But from a health insurance perspective, any taxable income for your household this year will be disregarded if it’s above 133% of the poverty level. So the full premium subsidy would continue to be available to you throughout 2021, as long as neither of you becomes eligible for an employer-sponsored health plan or Medicare.

Joe
Joe
6 days ago
Reply to  Louise Norris

Thanks for the quick reply. Just for a sanity check, is there any maximum above the 400% of FPL for still receiving the same subsidy?
I believe the FPL in 2021 for two people is $17,240. (400% of that would normally be $68,960 for the cliff)
So if we had taxable income of say $160,000 (from moving IRA monies to a Roth) which is 928% of FPL, would that still be eligible for a subsidy? Or is there no subsidy cliff whatsoever in 2021? I thought I had heard 600% as a revised subsidy cliff, but it wasn’t confirmed. It’s hard to get clear answers with so many moving parts. Thanks again!

Louise Norris
Editor
5 days ago
Reply to  Joe

For 2021 and 2022, the American Rescue Plan eliminated the 400% of income cap altogether. Instead, it set an upper limit on how much people have to pay for the benchmark plan (second-lowest-cost silver plan), capping it at 8.5% of household income. The percentage of income that people have to pay for the benchmark plan is lower for those with lower income. But for people who earn more than 400% of the poverty level (and would normally be ineligible for subsidies altogether), a subsidy is available in 2021 and 2022 if the benchmark plan would otherwise cost more than 8.5% of their income.

As mentioned above, if your wife is receiving unemployment compensation in 2021, additional income would not be counted. But for 2022, an income of $160k might or might not result in a subsidy — it would depend on your age and where you live. In my summary of the subsidy cliff (and how the ARP has temporarily eliminated it), I used an example of a couple in their 60s in an area where health insurance premiums are among the highest in the nation. They could still qualify for a subsidy with an income up to about $460,000: https://www.healthinsurance.org/obamacare/beware-obamacares-subsidy-cliff/

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