What to anticipate in the event you count on health insurance premium subsidies

Those who take out their own health insurance – or have no health insurance at all – may have been happy to see the American Rescue Plan (ARP) increasing contribution grants for 2021 and making them available to more people.

However, receiving these bonus tax credits is not automatic: when and how you get them depends on where you live and other factors, including whether you are already enrolled on a marketplace plan and whether you will be receiving Unemployment Benefit at any point in 2021.

Use our updated grant calculator to estimate how much you can save on your health insurance premiums in 2021.

The early bird receives the premium subsidy

Although the current registration window for COVID / ARP extends until August 15 in most states, it is in your best interest to register as soon as possible in order to maximize the number of months that you will receive the additional subsidies.

If you have unemployment benefits at any point in 2021, the American Rescue Plan gives you access to substantial premium grants and full co-payment discounts. This means that you are eligible for a Silver plan, which is upgraded to better than Platinum benefits, and you do not have to pay monthly premiums. However, this benefit is not yet available in most states. (Note that in some states, you may still have to pay a dollar or two for even the cheapest Silver plans. And it's worth noting that you can find this even if you're eligible for a premium-free Silver plan would you prefer to upgrade to a Silver plan with at least a nominal retail premium for a larger network of providers.)

Regardless, you'll still want to sign up or change your plan ASAP so that you can get a credit for any funding available.

Your state's marketplace affects how and when you receive your subsidies

For starters, you should be aware that there is one process in handling the ARP additional subsidies in the states using HealthCare.gov and slightly different approaches in the other 15 states. 36 states use HealthCare.gov as their marketplace, while Washington, DC and the other 14 states operate their own state marketplaces (Covered California, New York State of Health, Your Health Idaho, etc.).

How and when do you receive your premium subsidy in a HealthCare.gov state?

If you are in a state that uses HealthCare.gov, your additional subsidies will not be automatically added to your account even if you have already submitted financial information to the marketplace. You will need to log back into your account and follow the instructions to update your funding amount. (You can do this directly through HealthCare.gov or through an advanced direct registrar if you use one – or your broker or agent can help you clarify). Once the new grant is determined, you can either apply it to your current plan or choose a different plan.

If you are not insured or have signed up for an over-the-counter plan, you can switch to the marketplace anytime until August 15. However, the earlier you register, the sooner you will receive grants.

HealthCare.gov rolled out most of the ARP's new subsidies as of April 1, but CMS has announced that it will take July for the expanded subsidies for people receiving unemployment benefits to be available in 2021.

It is important to understand that regardless of the reason for the additional contribution subsidy (including unemployment benefit), the subsidy itself is retroactive to January 1, 2021 in each federal state, provided you have been insured on the marketplace for the whole year. Even if your increased unemployment benefit allowance doesn't take effect until August, you can claim the rest with your 2021 tax return. However, the full co-payment discounts for people receiving unemployment benefits in 2021 can only be granted in real time and will not take effect until the marketplace can process them from this summer onwards.

How are premium subsidies treated in countries with their own marketplaces?

In the District of Columbia and the other 14 states, the deadlines, dates for grant availability, and even eligibility rules vary from state to state. In most of these states, the current special registration window works like an open registration period during which people can re-register or change tariffs – although there are a few exceptions which are described below. And in contrast to HealthCare.gov, almost all state exchanges will automatically update the subsidy amounts for current enrolled in the next few weeks, as long as the enrolled has deposited financial information with the exchange.

Here is a roundup of what every state does with a state marketplace:

California

  • Residents can sign up for an ACA-compliant plan until December 31st.
  • Currently, most people have grants, but the unemployment benefit-based grant won't be available until July or August.
  • For current enrolled students, the subsidies will be updated automatically in May.

Colorado

  • Residents can sign up for an ACA-compliant plan until August 15.
  • The subsidies are not updated automatically, but are currently available for both new and existing participants. The process is to be streamlined by mid-May.

Connecticut:

  • Residents can sign up for an ACA-compliant plan between May 1 and August 15.
  • Most people will start receiving grants from May 1, although entitlement to unemployment benefit-based allowance will be available until July.
  • Subsidies will be updated automatically through July for current subscribers who do not manually update their accounts by then.

District of Columbia:

  • Residents can sign up for an ACA-compliant plan at any time until the end of the pandemic emergency period.
  • Additional grants are currently available to all beneficiaries, including those who are eligible for unemployment benefit in 2021.
  • Subsidies will automatically update in May for current subscribers who do not manually update their accounts until then.
  • For people who have been enrolled through the Marketplace since January, the full amount of the additional premium grant will be spread over the remaining months of 2021 (instead of having to wait to claim the grant from their tax returns for the first few months of 2021 returns back).

Idaho:

  • Residents can sign up for an ACA-compliant plan until April 30th.
  • Updated subsidies are currently available and have been automatically updated for existing participants who have already provided financial information to the exchange.
  • Current subscribers can change rates, but only to a different rate offered by the same insurance company (unless they have a qualifying event).

Maryland:

  • Residents can sign up for an ACA-compliant plan until August 15.
  • Updated subsidies are currently available and will be automatically added to existing accounts starting May for participants who have chosen to receive the maximum subsidy available.
  • Current participants with bronze or disaster plans can expand their coverage; current participants with Silver plans can switch to a more expensive Silver plan.

Massachusetts:

  • Residents can sign up for an ACA-compliant plan until July 23.
  • Updated subsidies are currently available and will be automatically updated for existing subsidized participants starting May. Enrolled newcomers to grants can access them in May to be covered in June.
  • Enrolled people who have received unemployment benefits in 2021 will be entitled to the ConnectorCare type 2A plan, which has no monthly bonuses and low expenses, as soon as possible.

Minnesota:

  • Residents can sign up for an ACA-compliant plan until July 16.
  • Updated Subsidies are currently available, and MNsure will automatically update existing Enrollment's grant amounts if they have financial information on file (Processing: As of early June, the Minnesota ARP Additional Subsidies are for eligible Enrollments with incomes greater than 400% of the Poverty available level).
  • MNsure has not yet clarified any specific details about the increased subsidies and co-payments for people receiving unemployment benefits in 2021. For now, they have stated that enrollments will be able to claim the additional premium allowance on their 2021 tax returns (which is true) in all states; Premium subsidies can always be claimed in the tax return as long as the person was insured in the market). But they have also said that they are working on a way that enrollments can get this benefit in real time (including reducing co-payments that cannot be claimed on a tax return) and hope to see more information by this summer
  • MNsure's current registration window is only available to people who are uninsured or enrolled on an off-exchange plan (it is necessary to switch to the exchange to receive premium grants). Current MNsure members cannot use this window to switch plans unless they have a qualifying event. Minnesota and Vermont are currently the only states in the country with this restriction (Vermont plans to change plans in July).

Nevada:

  • Residents can sign up for an ACA-compliant plan until August 15.
  • Updated grants are currently available and Nevada Health Link will begin automatically updating grant amounts for existing participants in June.

New Jersey:

  • Residents can sign up for an ACA-compliant plan until December 31st.
  • Starting in May, New Jersey is expanding its state-funded subsidies to students with household incomes up to 600% of the poverty line (this was previously capped at 400% of the poverty line).
  • Updated subsidies are currently available. Existing attendees can follow these steps to update their account, and new attendees can follow these steps.
  • This summer, the exchange will automatically update the subsidy amounts for existing participants who have not yet taken any measures to update their subsidies.

New York:

  • Residents can sign up for an ACA-compliant plan until December 31st.
  • Updated subsidies are currently available. This video shows how existing enrollees can update their funding amounts. From June, new funding amounts will automatically be applied to the accounts of the eligible participants if they have not taken any action by then.

Pennsylvania:

  • Residents can sign up for an ACA-compliant plan until August 15.
  • Updated subsidies are currently available. Pennie will automatically apply them until June for existing subscribers who have not taken any action to update their accounts by then.

Rhode Island:

  • Residents can sign up for an ACA-compliant plan until August 15.
  • HealthSourceRI has already automatically updated the grant amounts for current students with incomes up to 400% of the poverty line (i.e. people who have already received grants will now receive higher grants).
  • For people with an income above 400% of the poverty line and for people who will receive unemployment benefits in 2021, the new funding amounts will be updated in June.

Vermont:

  • Residents can sign up for an ACA-compliant plan until October 1 (note this is a recent renewal; it should end in mid-May).
  • For now, the Vermont marketplace is encouraging individuals who are uninsured or registered over the counter to sign up for marketplace coverage as soon as possible.
  • Individuals in receipt of unemployment benefits are encouraged to call the Vermont marketplace to begin the process of receiving additional subsidies.
  • This summer, people will be able to log back into their accounts and update their subsidy amounts.
  • Vermont, like Minnesota, is currently limiting the COVID / ARP-related registration window to those who are uninsured and those who have over-the-counter coverage and need to move to the exchange. A plan change for current exchange participants requires a qualifying event. But Vermont Health Connect confirmed that they plan to allow existing participants to make plan changes in July.

Washington:

  • Residents can sign up for an ACA-compliant plan until August 15.
  • The additional funding will be available by the beginning of May. Washington Marketplace will automatically update existing subscriber accounts for the new award amounts to take effect in June.
  • People who register before May will not see the new grant amounts when they register, but their grants will be updated in May if they provide financial information to the marketplace when they register.
  • Participants who are not currently receiving tax credits may want to switch tariffs once they start receiving tax credits. You will be able to log back into your account after May 15 to select a different tariff if offered by your current insurance company.

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.

Comments are closed.