The year 2021 has brought many challenges and opportunities in the insurance industry. It is impossible to include everything in this post but I want to give a brief overview of the past 6 months. The Affordable Care Act, also known as “Obamacare”, was enacted a decade ago and established an open enrollment period every year from November 1st – December 15th. There are also Special Enrollment Periods for those that have a qualifying event such as getting married, losing other qualifying health coverage, having a child etc… but that is a different post.
The reason I mention the Special Enrollment Period (SEP) is the Senate and House passed the American Rescue Plan Act (ARPA) of 2021 and signed it into law on March 11th. This is the same legislation (H.R. 1319) that gave $1,400 of stimulus money to people in March. The SEP is between February 15th and August 15th of this year.
For those that are not familiar with the subsidy program established by the ACA it provides assistance to consumers who have to purchase their own health insurance. There are income guidelines that determine what the amount is that you will get in subsidy dollars toward your premium.
The income guidelines are based on the established Federal Poverty Level. Before ARPA took effect you would fall off what was known as the subsidy cliff once you made 400% of the FPL. You would no longer get any subsidy benefit and be on the hook for 100% of your premium. Many people would end up paying it back during tax time. That subsidy cliff went away and there are now subsidies, at least for 2021 and 2022, regardless of income.
You can review the subsidy graph and more in-depth information at the following non-profit website. https://www.kff.org/health-reform/issue-brief/impact-of-key-provisions-of-the-american-rescue-plan-act-of-2021-covid-19-relief-on-marketplace-premiums/
For those that received a subsidy in 2020 and made more money than they anticipated there is good news. If you fell off that subsidy cliff last year and were at risk of paying it back you can relax. There is forgiveness of subsidy reconciliation for 2020 Premium Tax Credit Over-Payments. An example of this would be someone who was given $1,500 a month toward their insurance premium each month for 12 months in 2020. This means you would not have to pay back the $18,000 when you file your 2020 taxes which is huge! I hope this information is helpful and look forward to posting more information about health insurance.