You may have seen headlines recently about how the American Rescue Plan (HR1319) makes health insurance cheaper for people who buy their own coverage. As always, you can contact me if you have questions about your specific circumstances. But I wanted to summarize some general information:
- Section 9662 of the US Rescue Plan: If you were to have to repay the excess premium tax deduction from 2020, you would no longer have to do so . If you have already filed your tax return from 2020 and refunded all or all of your premium tax deduction from 2020, the IRS recommends that you hang on and wait for more information (ie they say people should not file a change in return at this point for to get your money back). Please note that you can still get additional premium tax credits when you register your taxes, if the amount paid on your behalf last year was too small. But if it was too big, you do not have to pay back any of it. This is a one-time reimbursement holiday, for 2020 only.
- Section 9661
- Section 9663 of the US Rescue Plan enables people receiving unemployment benefits in 2021 to sign up for a $ 0 premium silver plan with robust cost sharing reductions. You must otherwise be eligible for premium subsidies, which means that you may not be eligible for Medicaid or an employer-sponsored plan that is considered affordable. But otherwise, no matter how long your unemployment benefits last in 2021, and no matter how much you actually earn, you qualify for premium subsidies as if your income is just above the lower eligibility threshold. In 2021, this means that you do not pay anything for the Silver plan and that you get full cost-sharing reductions, which makes the plan's benefits more robust than a standard Platinum plan.
- Connect for Health Colorado is currently running a COVID-related special enrollment period for uninsured residents, which has been extended through August 15, 2021. Please note that "uninsured" includes individuals who have non-insurance coverage options, such as health sharing plans and health care or direct primary care plans. If you are enrolled in this type of plan because an ACA compliant plan used to be too expensive, you may find that it is now much cheaper than in previous years.
- Connect for Health Colorado works closely with the Colorado Division of Insurance to find out the details for people who already have coverage and need to update their information to take advantage of the new premium subsidies – stay tuned for more about it
- About If you are already registered in a plan through Connect for Health Colorado and do not want to make a plan change or update your financial information, you can claim additional premium tax deductions (if applicable) for your situation) when you file your 2021 tax return. However, if you are enrolled in an out-of-market plan, you will need to switch to a plan through Connect for Health Colorado to take advantage of the new premium tax deductions, either in advance in real time or on your tax return. Connect for Health Colorado works with the details when people who already have coverage can make changes.
Examples of savings
An example helps to illustrate the premium rescue plan of the American rescue plan. Let's consider a 50-year-old resident of Denver (zip code 80206) and see how their premiums would change at different income levels. Please note that Connect for Health Colorado & # 39 ;s subsidy calculator does not yet have the new ARP subsidies built in (they have planned to have that functionality on their website on May 15, with changes taking effect 6/1), so we have calculated these numbers manually; this is how math works. Kaiser Family Foundation also has a calculator available:
Income = $ 18,000
- Current Subsidy Amount = $ 412 / month
- Current Reference Premium = $ 54 / month (plan includes cost sharing reductions; has a deductible of $ 200 $ and $ 2000 maximum out-of-pocket)
- Current minimum cost plan premium = $ 0 / month (many plans, all with $ 8550 maximum out-of-pocket limit)
- Subsidy amount under American Rescue Plan = $ 466 / month
- Comparative premium under the American Rescue Plan = $ 0 / month
Income = $ 40,000
- Current subsidy amount = $ 139 / month
- Current reference premium = $ 327 / month (the plan has a deductible of $ 3,700 and a maximum of $ 8,150 out of pocket)
- Current minimum cost plan premium = $ 223 / month (plan has a deduction of $ 8550 and maximum out-of-pocket)
- Subsidy amount according to US rescue plan = $ 255 / month
- Comparative pr emie under American Rescue Plan = $ 211 / month
Income = $ 55,000
- Power s ubsidy = $ 0 (income above 400% of poverty level, so no subsidies without ARP)
- Current reference premium = $ 466 / month (plan has a deductible of $ 3,700 and a maximum of $ 8,150 out-of-pocket)
- Current minimum premium premium = $ 362 / month (plan has a deductible of $ 8550 and maximum out of pocket)
- Subsidy amount according to US Rescue Plan = $ 76 / month
- Comparison Premium Under US Rescue Plan = $ 390 / month (8.5% of income)
These amounts are specific to a 50 year old living in Denver. If you are older or live in one of the areas in the state where coverage is more expensive, your extra subsidies may be greater – significantly in some cases. But if you are younger and in an area of the state where the premiums are cheaper, the extra subsidies may be less. However, most applicants will see cheaper coverage as a result of this new legislation.