Federal premium tax credit expansion
Understanding expanded subsidies for on-exchange plans
What is the American Rescue Plan Act and how does that impact medical plans?
On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 to help with COVID-19 relief. As part of the new law, increased premium assistance is available through exchanges and removes the “cliff” that makes people ineligible for subsidies if their income exceeds 400% of the Federal Poverty Level (FPL) for 2021 and 2022. The American Rescue Plan Act includes:
Clients enrolled in Covered California health plans will not have to pay more than 8.5% of their household income for the second lowest cost silver plan
Clients who are below 400% of the FPL can get additional government financial assistance to nearly 0% (the 8.5% cap still applies for household income)
Any person in 2021 who received unemployment insurance for one week or more, and their total income qualifies for coverage through Covered California, will receive federal premium tax credit available for 138% of FPL for the duration of the Public Health Emergency in 2021.
Webinar: Expanded federal premium subsidy and American Rescue Plan
Learn all you need to know about the federal premium subsidy expansion from the American Rescue Plan, how it can grow your book of business, and help service your clients.
For upcoming SEP broker training webinars, register here.
When will the expanded subsidy be applied for new enrollments?
President Biden signed the American Rescue Plan on March 11, 2021 and it was effective immediately. For further timeline details, we are monitoring Covered California’s implementation plan. Stay tuned for updates.
Eligibility
On-exchange members with existing government financial assistance in 2021 who have provided income and consent to Covered California is automatically redetermined for eligibility of additional subsidies.
Off-exchange members must apply for an on-exchange plan through Covered California to take advantage of the subsidies.
Clients with incomes that qualify them for Medi-Cal or are ineligible for a subsidy do not qualify.
Resources for brokers and clients
IFP broker communications:
Sample – Messaging sent to on-exchange members with a subsidy April 13-15, 2021
Sample – Messaging sent to on-exchange members without a subsidy April 13-15,2021
Sample – Messaging for switching to an identical plan on-exchange April 13-15, 2021
Covered California to redetermine financial eligibility April 1, 2021
Gain new and retain clients with the expanded federal premium tax credits March 17, 2021
Check back for more updates. *
*The new American Rescue Plan Act is fluid and pending ongoing updates from the federal government and Covered California. Blue Shield of California is committed to helping you and your clients stay updated as information gets released. Please continue to check back for updates.