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How to get your health insurance subsidy if you’ve been unemployed

The subsidies that deliver $0 Silver premiums are available now. Here's what you need to do to get yours.

If you enroll in a marketplace plan or update your account between August 1 and August 15, your new subsidies will take effect September 1. Image: Aledeca Productions / stock.adobe.com

Reviewed by our health policy panel.

EDIT, November 22, 2021: The Build Back Better Act calls for a temporary extension of the extra financial assistance for people receiving unemployment compensation. The bill has been through several updates, but the version that passed the House in November (see Section 30605) calls for the extra subsidies to be available in 2022, for people who receive unemployment compensation for at least one week in 2022. Note that it would bump the income disregard threshold to 150% of the poverty level, but that would still result in full premium subsidies and full cost-sharing reductions.

EDIT, September 17, 2021: Although the COVID/American Rescue Plan special enrollment window on HealthCare.gov ended in mid-August, consumers who are receiving or have received unemployment compensation in 2021 can still enroll in coverage and take advantage of the premium subsidies and cost-sharing reductions described below.

The availability of this option will not show up on HealthCare.gov, but the marketplace will be reviewing applications to identify applicants who have received unemployment compensation, and will reach out to them to notify them that their special enrollment period has been approved.

So if you’re in a state that uses the HealthCare.gov marketplace, you’ve received unemployment compensation this year, and you’re not eligible for Medicaid, Medicare, or another employer’s health plan, it’s in your best interest to begin the process of enrolling in a 2021 plan, as access to the American Rescue Plan benefits is still available to you.


Most of the American Rescue Plan’s (ARP) additional premium subsidies have been available since April, and more than 2 million people have enrolled in health plans through the exchange (marketplace) during the COVID-related special enrollment period that’s been ongoing since February.

But a major provision of the law took effect on July 1, when HealthCare.gov made additional subsidies available to people who have received unemployment compensation this year.

DC and 14 states run their own exchanges, and some of them had already activated the additional unemployment-based subsidies in May or June. But in the 36 states that use HealthCare.gov, as well as some of the state-based exchanges, the additional subsidies became available on July 1.

Here’s what you need to know about these additional unemployment-based subsidies:

The subsidies apply to both premiums and out-of-pocket costs

The unemployment-based subsidies are two-fold:

  • They provide full premium subsidies, which means they fully cover the cost of the benchmark plan (second-lowest-cost Silver plan) in your area.
  • They provide the most robust level of cost-sharing reductions, which means they’ll boost the benefits of any Silver-level plan so that it’s better than a Platinum plan.

Who is eligible for unemployment-based health insurance subsidies?

The unemployment-based subsidies are available to anyone who has received or been approved to receive unemployment compensation at any time this year. (If you’re eligible to receive unemployment compensation but haven’t applied or haven’t been approved to receive it, you’re not eligible for the additional health insurance subsidies.)

Eligibility for the unemployment-based subsidies includes people whose income is under the federal poverty level, as long as they’re not eligible for Medicaid. (If a person is eligible for Medicaid or CHIP, they aren’t eligible for subsidies in the exchange; nothing has changed about that.) People with income under the poverty level are normally not eligible for subsidies, which means there’s a coverage gap in the states that have refused to accept federal funding to expand Medicaid. But a person who would otherwise be in the coverage gap can receive a full premium subsidy and full cost-sharing reductions in 2021, if they receive unemployment compensation at any time during the year.

CMS has confirmed that the full premium subsidies are only available if it’s a taxpayer who is receiving the unemployment compensation. If it’s a dependent who is receiving it, the household is eligible for the cost-sharing reductions (assuming the household is otherwise also eligible for premium tax credits), but not the full premium subsidies.

Even if you only received unemployment compensation for one week of 2021, you’re potentially eligible for the enhanced subsidies for the entire year. But subsidy eligibility would end if and when you become eligible for employer-sponsored health coverage (that’s considered affordable and provides minimum value), or premium-free Medicare Part A.

The ARP has not fixed the family glitch, so family members would also lose access to any subsidies in the exchange if they become eligible for employer-sponsored coverage that’s considered affordable for the employee.

How to claim the extra subsidies

HealthCare.gov has not yet implemented automatic subsidy updates, although that’s coming in September (with updates based on information that people already provided to the marketplace). But for now, you’ll need to log back into your account and update your application to activate the subsidies. You can do this through HealthCare.gov, or through an enhanced direct enrollment entity if you use one.

Some of the state-run exchanges already implemented systems to automatically apply the additional subsidies to accounts where applicants indicated that they’re receiving unemployment compensation this year. But if you’re in a state that runs its own exchange, it’s in your best interest to log back into your account to confirm that you’re receiving all of the benefits for which you’re eligible.

If you enroll or update your account between August 1 and August 15, your new subsidies will take effect on September 1. The COVID-related special enrollment period ends on August 15 in most states, so this is an important deadline to keep in mind.

If you’ve already got coverage through the exchange but you don’t update your application to start receiving the additional unemployment-based subsidies, you’ll be able to claim the premium subsidy on your 2021 tax return. However, there is no way to claim cost-sharing reductions after the fact. So it’s important to make sure you’re enrolled in a Silver plan as soon as possible, if you want to take advantage of that benefit.

You might need to switch plans to get the full benefit

You can get the additional premium subsidies applied to any metal-level plan, although your subsidy can never be more than the cost of your plan. So if you’re enrolled in a plan that’s less expensive than the benchmark plan, you might find that you’re able to upgrade to a better plan without paying any additional premium.

But you can only get the enhanced cost-sharing reductions if you’re enrolled in a Silver plan. So if you currently have a Bronze or Gold plan, you might choose to switch to a Silver plan to get the full benefits available under the ARP.

Although switching to a new plan mid-year usually means starting over with a new deductible and out-of-pocket maximum, many states and insurers are allowing enrollees to keep their accumulated out-of-pocket costs, as long as they switch to a new plan from the same insurer.

What you’ll pay each month

The unemployment-based subsidies will cover the full cost of the benchmark plan. So you’ll have access to two Silver plans that have no premium, and you’ll likely have access to a variety of Bronze plans — and possibly some Gold plans — that have no premium.

If you pick a plan that’s more expensive than the benchmark plan, including the higher-cost Silver plans, you’ll pay at least some premium each month.

If you’re in a state that has additional state-mandated benefits that aren’t covered by premium subsidies, you may find that you have to pay at least a dollar or two each month in premiums, regardless of which plan you select.

What you’ll pay when you need medical care

If you enroll in a Silver plan, you’ll get the full benefits of the unemployment-based subsidies, meaning that you’ll have fairly low out-of-pocket costs if you need medical care later this year. Any Silver plan you choose will have a maximum out-of-pocket of no more than $2,850 in 2021, and it’s common to see these plans with deductibles that range from $0 to $500. Copays for office visits and many prescriptions also tend to be fairly low.

If you choose a non-Silver plan, the normal cost-sharing will apply. No matter what plan you select, your out-of-pocket maximum for in-network care won’t exceed $8,550 this year, but the specifics of the coverage will vary considerably from one plan to another.

How big will your subsidy be?

You can use our subsidy calculator to see the subsidy amount that will be available to you. For people receiving unemployment compensation, the exchange will disregard any income above 139% of the poverty level for 2021.

The 2020 poverty level numbers are used to determine subsidy eligibility for 2021, so you can find the poverty level for your household size, multiply it by 1.39, and enter that number into the subsidy calculator. And if you need help finding a plan, our direct enrollment entity can provide assistance.


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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Unemployed and In Debt
Unemployed and In Debt
1 year ago

Great, my “OOP max” is now just $1200! Too bad I’ve already incurred over $6000 in medical bills on the same silver plan prior to July 1st that still have to be paid because the cost-sharing reductions are not retroactive. I have to say this rollout was handled incredibly poorly. Of course I really appreciate the $0 premiums, but for someone on unemployment, they pale in comparison to the massive bills faced by those of us with chronic conditions, on expensive medications, or receiving any kind of hospital procedure prior to this magic deadline.

Louise Norris
Editor
1 year ago

I’m really sorry you’re going through this. Have you double-checked with the insurer to make sure there’s no way they can/will reprocess the claims from earlier in the year? There’s nothing that requires them to do this, but we’ve heard anecdotal references to some insurers being willing to do this in some areas.

Jerry
Jerry
1 year ago

Can you explain what a “benchmark” plan is and how it is defined? I received unemployment for part of 2021, am on a Silver 94 plan with Covered California, and had thought that all Silver plans available to me would now cost $1 per month, and considered retroactive to Jan 1, resulting in significant tax credits when I do my PTC reconciliation in my taxes at end of year. But only a couple of plans were $1,; others, including my Blue Shield, were more, though still less than before. What makes those plans cost more than $1? Also, what is the PTC amount that will be considered retroactive to 1/1/21 at tax time next year? I want to know so I can figure what my estimated taxes should be through the year, since some amount I have paid in premiums will be refunded.

Louise Norris
Editor
1 year ago
Reply to  Jerry

There are two different definitions for “benchmark plan” under the ACA: https://www.healthinsurance.org/glossary/benchmark-plan/ In this case, we’re talking about the first definition.

Premium subsidy amounts are calculated based on the cost of the second-lowest-cost silver plan in each area. For people who qualify for full subsidies (including those with unemployment compensation in 2021), the lowest-cost silver plan will be free (or nearly free, as is the case in California), and so will the second-lowest-cost silver plan.

But if you pick a more expensive silver plan, you’ll have to pay the difference between what that plan costs and what the second-lowest-cost silver plan costs. It sounds like you have a silver plan that’s priced above the benchmark plan, which is why you still have some additional premium to pay each month.

Last edited 1 year ago by Louise Norris
Jerry
Jerry
1 year ago
Reply to  Louise Norris

Thanks! But what about the retroactivity? I have read in so many places that the nearly free premiums will be retroactive to 1/1/21 for those who were unemployed in 2021. If one signs up for a more expensive plan, will THAT plan’s premium be retroactive? Will the retroactive aspect be reconciled at tax time in 2022?

Louise Norris
Editor
1 year ago
Reply to  Jerry

The retroactive premium subsidies will be based on the plan you actually had for each month of the year, and yes, it will be sorted out when you file your 2021 tax return.

So for example, let’s say a person was enrolled in a Bronze plan that had an after-subsidy premium of $50/month for the first six months of the year. Now let’s say that person received unemployment income in 2021, and switched to the benchmark Silver plan on July 1, qualifying for a much larger total subsidy that completely covers the cost of the benchmark plan (or in California, covering nearly all of it).

When tax time rolls around, the person will be able to get back the $50/month that they paid in after-subsidy premiums for the first six months of the year (or nearly all of it in California). But the subsidy can’t ever be used to make your costs less than $0/month. So even though the person’s subsidy might have increased by much more than they were previously paying, they can’t claim the full amount of the new subsidy for a month when they were enrolled in a less expensive plan — the subsidy can never be more than the cost of the plan in which you’re actually enrolled in a given month.

Form 8962 helps to make this clear: https://www.irs.gov/pub/irs-pdf/f8962.pdf You can see how they calculate the subsidy for each month, based on the plan the person was enrolled in and the cost of the benchmark plan. So it can vary from one month to another if you switch plans.

Let me know if that makes sense!

Anthony S Billeaud
Anthony S Billeaud
1 year ago

Louise,

Regarding this text from your article:

“Eligibility for the unemployment-based subsidies includes people whose income is under the federal poverty level, as long as they’re not eligible for Medicaid.”

I thought that there was no cap on the amount of income a person could have and still be eligable for the unemployment based subsidies? That text looks as though my income must be under the poverty level to be eligible?

Thanks.

Louise Norris
Editor
1 year ago

You’re correct that there’s no cap. But that other sentence is referring to the fact that the unemployment-based subsidies are also available to people whose actual income would normally be too LOW for subsidy eligibility. In states that haven’t expanded Medicaid, people with income below the poverty level cannot normally qualify for Medicaid or subsidies in the marketplace (they’re in what’s called a “coverage gap” created by their states’ refusal to expand Medicaid). So the unemployment-based subsidies will make those folks eligible for subsidies, even though they normally would not qualify for them.

Anthony S Billeaud
Anthony S Billeaud
1 year ago
Reply to  Louise Norris

Oh..OK…thanks.

Thinking Ahead
Thinking Ahead
1 year ago

Plan for 2022 if you received unemployment in 2021? Will the extra subsidies for those who received unemployment in 2021 continue into 2022? Would that take a new bill from congress?

Louise Norris
Editor
1 year ago
Reply to  Thinking Ahead

Editing this comment to note that the House Ways and Means Committee has approved a version of the Build Back Better Act that calls for the extra subsidies for people receiving unemployment compensation to be extended through 2025: https://www.healthaffairs.org/do/10.1377/hblog20210912.160204/full/ We’ll keep an eye on this and update the article if this provision is extended past the end of 2021.

If it is extended, however, it would apply to people who receive unemployment compensation in the coverage year in question. So it wouldn’t affect people who received unemployment compensation in 2021, unless they’re still receiving it in 2022.

If you’ve received unemployment at any point in 2021, you can continue to receive the unemployment-based subsidies through the end of 2021. For 2022, you’ll need to project the total income you expect to receive in 2022, and your 2021 income will no longer be relevant.

But the rest of the ARP’s subsidy enhancements will still be in effect in 2022. So there will not be an income cap for subsidy eligibility, and the percentage of income that people have to pay for the benchmark (second-lowest-cost silver) plan will continue to be lower than it was pre-ARP. Here’s more about the rest of the ARP’s subsidy improvements: https://www.healthinsurance.org/blog/how-the-american-rescue-plan-act-would-boost-marketplace-premium-subsidies/

Last edited 1 year ago by Louise Norris
Deborah
Deborah
10 months ago
Reply to  Louise Norris

Hi! I was on unemployment in 2021 and have not found a job yet. From what I am reading above, my coverage will end the end of 2021? I am not in a State that has extended Medicaid. I will lose my insurance in this case correct?

Louise Norris
Editor
10 months ago
Reply to  Deborah

The version of the Build Back Better Act that was released last week includes an extension of the unemployment-based subsidies through 2025: https://rules.house.gov/sites/democrats.rules.house.gov/files/BILLS-117HR5376RH-RCP117-17.pdf (see section 30603).

The outcome of that legislation is still up in the air, but assuming it’s enacted, a person would have to get unemployment compensation in 2022 in order to be eligible for the unemployment-based subsidies. In that case, income above 150% of the poverty level would be disregarded, meaning that the person would also be eligible for year-round enrollment in 2022: https://www.healthinsurance.org/special-enrollment-guide/an-sep-if-your-income-doesnt-exceed-150-of-the-federal-poverty-level/

Even if the Build Back Better Act isn’t enacted, you won’t lose your insurance at the end of 2021. But your subsidy for 2022 will be based on your actual projected income for 2022. If that’s still in the subsidy-eligible range, you’ll continue to get a subsidy, but it might be a different amount than you get now (if your income for 2022 doesn’t exceed 150% of the poverty level, you’d still get a full subsidy that covers the entire cost of the benchmark silver plan).

James
James
10 months ago

Hi and thanks for you help. I am considering cashing in a mature savings bond before the end of 2021 and perhaps converting some Traditional IRA to Roth but am concerned that doing so would mean that I would go over the income limit for 2021 and would have to pay back the insurance subsidies I received this year even though I qualified and received unemployment for the first half of 2021. Will my income still be held at no more than 139% of poverty level if I exceed the $51,040 income limit?
Thank you

Louise Norris
Editor
10 months ago
Reply to  James

I recommend that you consult with a certified tax professional to sort out the details, as we cannot provide tax advice. But yes, the fact that you received unemployment compensation in 2021 means that your income above 133% of the poverty level will be disregarded when you’re completing Form 8962 for 2021 (premium tax credit reconciliation), regardless of how much additional income you earned during the year.

As long as you haven’t become eligible for an employer-sponsored plan or Medicare, your full subsidy can continue through the end of the year and will not have to be repaid.

Maria Ellis
Maria Ellis
10 months ago

Are these benefits available for 2022 as well?

Louise Norris
Editor
10 months ago
Reply to  Maria Ellis

We don’t know yet, as it depends on the Build Back Better Act that’s currently the subject of fierce debate in Congress. The latest version of the legislation calls for extending this benefit for one more year, through the end of 2022. See Section 30605: https://rules.house.gov/sites/democrats.rules.house.gov/files/CP-117HR5376RH-COMPARED-RCP117-18.pdf
But that has already been through a few changes in the last several weeks, and we don’t know how it will turn out in the end.

It’s also worth noting that if this benefit does get extended into 2022, it would only apply to someone who is receiving unemployment compensation for at least one week in 2022. A person who received unemployment compensation in 2021 but is no longer receiving it as of 2022 would have subsidy eligibility based on normal income rules (which have also been enhanced under the American Rescue Plan, and that’s still in place throughout 2022).

Adriena Daunt
Adriena Daunt
10 months ago
Reply to  Louise Norris

Hi Louise and thanks for all your stellar analysis! Did the version of the Build Back Better plan that passed the House yesterday still include subsidy for the unemployed in 2022? I know it still has to pass the Senate …

Louise Norris
Editor
10 months ago
Reply to  Adriena Daunt

Yes, but just for 2022. This is the version of the bill that got sent to the Senate: https://rules.house.gov/sites/democrats.rules.house.gov/files/BILLS-117HR5376RH-RCP117-18.pdf (see section 30605)

Linda Morgan
Linda Morgan
9 months ago

I became disabled March 2020. So I had insurance that year. I applied for disabled. I was working part-time for a CPA doing filing etc. I also live with him (separate room) due to already having a bad back (scoliosis, it’s not operable) that made me unemployable when my pain medication was taken away. Then I fell and broke my back. He applied for PPP loan kept me on the payroll. But in truth I was bed ridden. 2 years now. Had one operation it did not go well. Finally 6 months after breaking my back I got a pain management doctor and that has helped. I’ve seen many surgeons and have not been able to get additional surgery for a variety of reasons.

The disability was recently denied of course and I had a lawyer and will appeal. The CPA can no longer afford to continue caring for me. He has spent thousands a month not just to replace the little work I did but hiring others to help take care of me and house etc.

I’ve applied for unemployment, need to find somewhere to live ( I’m 57, have some savings and Roth) but with no health care will not be able to afford all this and my pain medication is about 1,000. A month alone. I’m at a loss what to do anymore.

Linda Morgan

Louise Norris
Editor
9 months ago
Reply to  Linda Morgan

Linda, I’m so sorry you’re going through this. I assume you’re in a state that has not expanded Medicaid and are therefore in the coverage gap? (that’s Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina, South Dakota, Tennessee, Texas, and Wyoming). Here’s more about the coverage gap: https://www.healthinsurance.org/faqs/what-is-the-medicaid-coverage-gap-and-who-does-it-affect/
And here’s an article about how to avoid the coverage gap, which could potentially be useful: https://www.healthinsurance.org/blog/six-strategies-for-avoiding-the-affordable-care-acts-coverage-gap/

But the Build Back Better Act, which already passed the House and is now under consideration in the Senate, would provide full premium subsidies for people in the coverage gap. So if you’re in one of those states and haven’t been eligible for subsidies because you didn’t have an income, the Build Back Better Act might fix that as of early 2022. That would at least mean that you could get health coverage. So keep an eye on that legislation. We’ll write more about it on this site over the next few weeks. I wish you all the best.

Susan charles
Susan charles
7 months ago

I received the subsidy because I got unemployment but we made more than estimated. When I went to do my taxes it says I have to pay the subsidy back. I was under the impression if you got unemployment in 2021 you don’t have to pay subsidy back?

Louise Norris
Editor
7 months ago
Reply to  Susan charles

I recommend that you consult with a CPA about the specifics of your tax return. But for general information, you’ll need to check Box A on Form 8962: https://www.irs.gov/pub/irs-pdf/f8962.pdf That indicates that you received unemployment compensation in 2021. As explained in the instructions for Form 8962, any income above 133% of the poverty level will then be disregarded in terms of reconciling your premium tax credit: https://www.irs.gov/instructions/i8962#en_US_2021_publink100077020

Susan charles
Susan charles
7 months ago
Reply to  Louise Norris

On my federal return it says I owe nothing to the state but when I do state on turbo tax it says I owe

Susan charles
Susan charles
7 months ago
Reply to  Louise Norris

I figured it out missed a column. No I don’t have to pay back subsidy if I got unemployment

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