SWFL Insurance

American Rescue Plan Act Expands Subsidies

Summary The American Rescue Plan Act passed both the house and senate and was signed into law by President Biden on March 11, 2021. Many people will focus on the additional stimulus money that will start to be sent in March. However, there are several key changes to share with your customers and members that dramatically improve Marketplace access and affordability. Update: We’ve provided additional facts about this legislation’s impact on subsidies, including a link to the new CMS fact sheet and agent talking points. Details Increased Subsidy Amounts And Expanded Access To Subsidies The American Rescue Plan Act increases the subsidy amounts for all currently subsidy-eligible consumers, and subsidies may now be available for those earning over 400% of the federal poverty level (FPL). You can review the updated FPL job aid here. Update: We’re still working through all the details of this legislation, but here are a few important notes. Starting on April 1 for plans with a May 1 effective date two things will be available at SWFL Insurance: Increased premium tax credits based on the lower income contribution percentage Expanded tax credit access to consumers with household incomes above 400% This means that new consumers and current enrollees who submit an application and select a plan on or after April 1 will receive the increased premium tax credits for 2021 Marketplace coverage. Current enrollees, including those who recently enrolled through the 2021 Special Enrollment Period, must update their applications and enrollments in order to get new eligibility results starting April 1. They’ll need to reselect their current plan in order for the changes to take effect to reduce their premiums for the remainder of the year. Consumers who need coverage starting April 1 should still apply and select a plan by the end of March through the Special Enrollment Period (SEP) so coverage can start April 1. Then to get the added benefits, they should come back after April 1, your application again, and reselect their current plan to have increased tax credits applied to their coverage for May 1 forward. Note: Consumers with ACA plans effective April 1, 2021, or earlier, have the choice of waiting until they file their taxes next year in 2022 to receive the additional premium tax credit amount when they file and reconcile their 2021 taxes. However, we recommend all enrollees, after April 1, update their application and review their plan options during the 2021 Special Enrollment Period through May 15 because they may be able to choose a plan with lower out of pocket costs for the same price or less than what they are currently paying. The updates to the subsidy schedule extend through December 31, 2022. Below are some important changes to note. We will keep you updated as more details of the American Rescue Plan Act are available. Common Scenarios Consumer Scenarios Previous Guidance   American Rescue Plan Changes Subsidy eligible between 100-150% of FPL Individuals who make under 133% of the federal poverty level were expected to pay 2% of their income for the benchmark plan. From 133% to 150% it scales up from 3% to 4% of income. Are now eligible for a $0 monthly payment the first and second lowest Silver plan in their county. Subsidy eligible FPL between 151% and 399% They received premium subsidy based on the cost of the benchmark plan, from 4% to 9.5% Subsidies depend on county, age, and FPL. Everyone will receive a larger subsidy. The size of the increase will also depend on county, age, and FPL. Many Bronze options may now be free to consumers. Over 400% of FPL Individuals in tax households who were over 400% FPL were not eligible for subsidies. Consumers may now have access to subsidies. There is no upper income limit on premium tax credit eligibility, meaning that all middle- and upper-income individuals who purchase their own coverage qualify for a subsidy if their premiums exceed 8.5 percent of their household income. Individual collected or collects at least one unemployment check in 2021 Modified Adjusted Gross Income (MAGI) used to determine subsidy and CSR eligibility was calculated the same way for all tax households. Consumer is treated as the applicable taxpayer and their tax household is capped at 133% of FPL for the purpose of CSR and subsidy calculation for 2021. Unemployed individuals on COBRA Consumers qualify for a SEP for an ACA plan within 60 of losing their group coverage. Consumers qualify for an SEP within 60 days of COBRA expiring. A proposed rule that is pending finalization would create a SEP when an employer ends its contribution to COBRA. It is possible that CMS will amend this to include Federal contributions Consumers receive a 100% subsidy of COBRA health insurance premiums so unemployed workers can remain on their employer healthcare plans through the end of September 2021. What This Means For Members And Consumers  Members Scenarios Situation  Next Steps  Current members who fall into 100-150% FPL and currently have a monthly premium above $0 These members’ subsidy will equal the premium of the second-lowest cost silver plan. Bronze enrollees should buy-up to silver CSR plans. Staying in their current product (HOI vs BCBSFL) will ensure they keep their progress towards their accumulator. Subsidy amounts will update after a person enrolls in a new plan or updates their subsidy application after April 1. The updated subsidy amount will apply to the next month’s bill. CMS should have the subsidies adjusted to reflect the new law by April 1, which means May is the first month where it will be possible to receive an updated subsidy. These members may also be a candidate for an ancillary product, using the reduced monthly premium toward an ancillary premium. Current subsidized members who pay $0. These members will not be affected by the changes, but they may be able to buy up to higher value coverage. If they are 150-200% FPL, they will likely want to buy up to CSR silver. Depending on