The best way to get your health insurance grant for those who've been unemployed

Most of the American Rescue Plan (ARP) additional premium subsidies have been available since April, and an estimated 1.65 million people enrolled in health insurance through the stock exchange (marketplace) during the COVID-related special enrollment period that began in February.

But an important provision of the law will go into effect July 1, when HealthCare.gov will provide additional subsidies to people who have received unemployment benefits this year.

EZ and 14 federal states operate their own stock exchanges, some of which had already activated the additional unemployment benefits in May or June. But in the 36 states that use HealthCare.gov, as well as some of the state exchanges, the additional subsidies will be available this Thursday, July 1st.

What you need to know about this additional unemployment benefit:

The grants apply to both premiums and expenses

Unemployment benefits are twofold:

  • They offer full premium subsidies, which means that they fully cover the cost of the Benchmark Plan (second cheapest Silver plan) in your area.
  • They offer the most solid level of cost sharing reduction, meaning that they add to the benefits of any Silver Level plan so that it is better than a Platinum plan.

Who is entitled to unemployment benefit?

The unemployment benefit supplement is available to all persons who have received or approved unemployment benefit this year. (If you are entitled to unemployment benefit but have not submitted an application or have not approved it, you are not entitled to the additional health insurance subsidies.)

Unemployment benefits are available to people whose income is below the state poverty line while they are not eligible for Medicaid. (If an individual is eligible for Medicaid or CHIP, they are not eligible for subsidies in exchange; that has not changed.) Individuals on incomes below the poverty line are usually ineligible; That is, there is a shortfall in coverage in states that have refused to accept federal funding to expand Medicaid. But a person who would otherwise be in the coverage gap can receive a full contribution grant and full co-payment in 2021 if they receive unemployment benefits at any point in the year.

CMS has confirmed that the full contribution subsidy is only granted if a taxpayer receives unemployment benefit. If he receives a dependent person, the household is entitled to the cost participation reductions (provided that the household is otherwise also entitled to a contribution deduction), but not the full contribution subsidy.

Even if you only received unemployment benefits for one week in 2021, you can potentially be entitled to the increased subsidies all year round. However, eligibility for subsidies would end when you became eligible for employer-sponsored health insurance (which is considered affordable and has a minimum value) or premium-free Medicare Part A.

The ARP did not fix the family bug, so family members would also lose access to subsidies in exchange if they were eligible for employer-sponsored coverage that is deemed affordable to the employee.

How to apply for the additional subsidies

HealthCare.gov cannot automatically update these subsidies (although this may become available later). So you'll need to log back into your account and update your application to activate the subsidies. You can do this through HealthCare.gov or through an advanced direct registration entity if you are using one.

Some of the state exchanges will automatically apply the additional grants to accounts where applicants have stated that they will receive unemployment benefits this year. However, if you are in a state that has its own exchange, it is in your best interests to log back into your account to confirm that you are receiving all of the perks you are eligible for.

If you register or update your account between July 1st and July 31st, your new subsidies will take effect on August 1st. The special COVID-related registration period runs until August 15 for most states, but registrations or updates completed in August will not take effect until September.

If you are already insured with the exchange insurance but do not update your application in order to receive the additional unemployment benefit allowance, you can claim the premium allowance in your 2021 tax return. However, there is no possibility of claiming a cost sharing retrospectively. It is therefore important that you sign up for a Silver plan as soon as possible if you want to take advantage of this benefit.

You may need to switch plans to get the full benefit

You can apply the additional premium subsidies for any plan at the metal level, although your subsidy can never be higher than the cost of your plan. So if you are enrolled in a plan that is less expensive than the benchmark plan, you may be able to upgrade to a better plan without paying an additional premium.

However, you can only receive the extended co-payment discounts if you have signed up for a Silver plan. So if you currently have a Bronze or Gold plan, you can switch to a Silver plan to take full advantage of the ARP.

Although switching to a new plan in the middle of the year usually means starting with a new deductible and a new maximum amount, many states and insurers allow participants to keep their accumulated expenses as long as they switch to a new plan from the same insurer .

What you pay every month

Unemployment benefit will cover the full cost of the benchmark plan. So you have access to two Silver plans that have no premium, and you likely have access to a variety of Bronze plans – and possibly some Gold plans – that have no premium.

If you go for a plan that is more expensive than the Benchmark plan, including the more expensive Silver plans, you will pay at least one premium every month.

If you are in a state that has additional state-required benefits that are not covered by premium subsidies, you may have to pay at least a dollar or two in premiums every month, regardless of which plan you choose.

What you pay for when you need medical help

When you sign up for a Silver plan, you'll get full Unemployment Benefits, which means you'll have relatively low out-of-pocket expenses if you need medical care later this year. Any Silver plan you choose has a maximum outlay of no more than $ 2,850 in 2021, and it's common for these plans to range between $ 0 and $ 500 with deductibles. Copays for visits to the doctor and many prescriptions are also usually relatively low.

If you choose a non-Silver plan, the normal co-payment will apply. Whichever plan you choose, your maximum network care grant this year won't be more than $ 8,550, but the details of coverage vary significantly from one plan to another.

How much will your grant be?

With our funding calculator you can display the funding amount that is available to you. For those receiving unemployment benefits, the exchange will not take into account any income above 139% of the poverty line for 2021.

The 2020 poverty line is used to determine eligibility for 2021. So you can determine the poverty line for your household size, multiply by 1.39 and enter this number into the funding calculator. And if you need help finding a plan, our direct registration office can help.

Louise Norris is an individual health insurance broker who has been writing about health insurance and healthcare reform since 2006. She has authored dozens of opinions and educational papers on the Affordable Care Act for healthinsurance.org. Your state health exchange is regularly quoted by the media reporting on health reforms and by other health insurance experts.

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