Following President Biden’s first Covid-19 relief plan, the American Rescue Plan Act (ARPA), there have been many changes made to the Affordable Care Act (ACA). Here’s what you need to know:
ACA SUBSIDY ELIGIBILITY
Open Enrollment has been extended until August 15th, 2021
The gap for eligibility has widened – those who made too much annually to qualify for a subsidy might now be eligible for a premium subsidy
If you already have an ACA plan with a subsidy, you are now eligible for more significant financial assistance.
Biden’s American Rescue Plan (ARPA) eliminated the cap on eligibility for premium subsidies. Which means if you made too much $$$ to qualify for subsidies in the past, you might qualify now.
Before the ARPA was introduced, families making over 400% of the poverty level (about $51,500 for an individual or $106,000 for a family of 4) could not receive federal assistance. The new law has lifted that cap so that nobody will pay more than 8.5 percent of their income toward their health insurance.
Entrepreneurs and small business owners making under 600% of the poverty level (up to $76,560 for a single individual or $157,200 for a family of 4) who were priced out of the ACA previously will now be eligible for a premium subsidy.
The ARPA is also benefiting current enrollees with subsidies. Most households will see their subsidy increase if they apply for new coverage through the marketplace.
This will be in effect until January, 2023.
ACA plans are still the only permanent major medical plans available on today’s market. They are also the only plans that cover major pre-existing conditions. You can only get a Health Savings Account (HSA) with qualified ACA plan (the specific plan must qualify).
Health Savings Accounts allow you to input pre-tax dollars into the account to use toward medical expenses. Many families use these accounts to offset the cost of deductibles.
Another option to help offset a high deductible is a gap health plan, which can be purchased through select private health carriers. Gap insurance helps pay for medical costs that occur before reaching the deductible, which has led to people calling it “insurance on insurance”.
Despite ACA plans being more affordable, many people are turning away subsidies and are heading to the private market due to their past experience with Obamacare.
ACA premiums have lowered, however deductibles and out of pocket maximums are as high as ever. That means outside of a copay at a doctor’s visit, you will be responsible for thousands of dollars in medical bills before insurance starts paying. On top of that, many states do not have PPO Network plans available. Which means that if you are out of state, you do not have coverage OR you are only covered after meeting a higher deductible.
Many independent contractors and small business owners are wary of ACA plans, due to being burned in the past. In order to qualify for a subsidy, you must estimate your yearly earnings for the following year. If your business is growing and you end up making more than you estimated – you will owe back that subsidy in taxes.
The American Rescue Plan Act will be in effect until January 2023. If you are diagnosed with a serious pre-existing condition within that time, you will no longer be eligible for private insurance. Which means if your subsidy is taken away, you are forced to pay the actual ACA premium or left with no insurance at all if it is not in your budget.
Is an ACA Plan Right For Me?
The best thing you could do is speak to a broker educated in all forms of health insurance, who can help you decide which plan would work best for your family and finances. Here at Chavis Benefits we have the top 35 health insurance companies. We shop the best coverage for the best price, custom designing plans for each of our clients.