More Help with Health Insurance

I have some good news for those of you who don’t have health insurance or were laid off and opted to keep your old employer’s coverage through COBRA.

The American Rescue Plan (ARP) is the big stimulus bill that Congress recently enacted, and for those of you who are paying your own health insurance, it’s likely that you’ll have lower monthly premiums soon. In some cases, you may not have to pay any premium costs for a few months.

Health insurance bought through the Affordable Care Act (ACA) marketplace is going to get less expensive for many households. The ARP increases the premium subsidies the government will provide and expands who is eligible for insurance premium tax credits, which translates into more assistance for more people.

Here’s the latest health insurance news.

Open enrollment in ACA health plans through August 15th. Normally, you can only sign up for an ACA plan in the Fall for the coming year. Because of the coronavirus, the Biden administration has swung the door wide open through late Summer. You can sign up for immediate coverage. Go to healthcare.gov and you will be routed to the website to shop for ACA plans in your state.

Bigger premium subsidies. The American Rescue Plan changes the formula for who qualifies for help paying their premiums. Many more people will now qualify for subsidies. Even if you shopped in the past and thought it was too expensive, please consider insurance now. And starting July 1, anyone who received unemployment benefits this year may be eligible for additional savings.

The official estimate from the government is that after tax credits, the average monthly premium will decrease by $50 and four out of five enrollees will be able to get coverage for $10 or less a month. It’s also expected that more than half of shoppers will be able to find a Silver level plan on the ACA marketplace with a premium cost of $10 or less after tax credits.

COBRA help. If you lost your job and elected to keep your health insurance plan through COBRA by agreeing to pay 100% of the premium cost, you may be eligible for a big break. A provision of the ARP will reduce your premium cost to $0 from April 1 through September 30th of this year. Yes, zero. Your former employer should be in touch. If not, contact HR.

There are some caveats to be aware of. The way COBRA works is that once you leave a job you can keep your health insurance for 18 months if you pay the full premium. That 18-month rule still applies; the $0 premium deal is only applicable until you hit your 18-month limit, or Sept. 30th, whichever comes first.

For those of you who have opted to keep your existing health insurance through COBRA, the 6-month premium reprieve is obviously a great deal. And I hope during that time, as the economy continues to gather strength, you can get back to work at a job with health insurance benefits.

But be prepared to revisit all of this in September. Once the COBRA subsidy expires on Sept. 30th, you will be back on the hook for 100% of the premium cost. At that point, you may want to consider moving to an ACA plan in the Fall. And that will depend on whether the government extends 2021 open enrollment beyond the current August 15th deadline.