Expert advice on how the American Rescue Plan Act of 2021 affects your health insurance

  • Learn if you qualify to receive up to 100% of the cost of health insurance paid for you and your family
  • Discover important changes to COBRA
  • Get tips on how to enroll for coverage in the healthcare marketplace

Between the public health crisis created by COVID-19, the resulting economic downturn and increase in unemployment rates, health insurance has been a big concern for many families.

The American Rescue Plan Act (ARPA) has made some temporary changes to our healthcare system that will keep more people insured and able to receive the healthcare they need. 

The Act also states that COVID-9 vaccines are to be fully covered under every plan — so that all Americans can receive the vaccination without worrying about the cost.


What you need to know

The first change is to the Consolidated Omnibus Budget Reconciliation Act (COBRA,) a program that gives employees the option to purchase health insurance through a plan if they leave or lose their job. 

Generally, people who choose to get COBRA coverage must pay around 102% of the premium cost, which is often around five times as much as the premium they paid as an employee of the company (employers, on average, pay 82% of this cost for their employees).  

As a result, although many people are eligible for COBRA coverage when leaving a job, very few people are able to extend their health insurance coverage due to the costs.

The passage of the American Rescue Plan Act includes a provision that the federal government will cover the COBRA costs for those who lose their jobs and enroll in continuing plan coverage from April 1, 2021 through September 30, 2021.

This subsidy will be paid to employers, so individuals interested in enrolling in COBRA coverage will not need to worry about coming up with additional money to pay for the health insurance premium. 

“Generally, people who choose to get COBRA coverage must pay around 102% of the premium cost, which is often around five times as much as the premium they paid as an employee of the company (employers, on average, pay 82% of this cost for their employees).”  

The subsidy covers both the employee and their qualified beneficiaries — meaning that a parent who loses their job can enroll themselves and their children in COBRA coverage at no cost for the six-month period running from April 2021, through the end of September 2021.

If someone was eligible for COBRA, but previously declined coverage, they will be allowed to enroll in COBRA coverage as well. Those individuals can expect to receive a notice by mail informing them of the change and giving them 60 days to enroll in coverage. If the individual becomes eligible for health insurance from another source, like Medicaid or a new employer, the COBRA coverage will terminate before September 30, 2021. 

How to enroll in coverage in the healthcare marketplace

Another expansion of health insurance through the American Rescue Plan Act is a temporary increase in the ability to enroll in insurance through the healthcare marketplace

Anyone who is eligible to enroll in marketplace insurance during the special enrollment period, which runs through August 15, 2021. In addition, anyone who loses healthcare coverage, receives unemployment income, or has another qualifying life event is eligible to sign up for healthcare insurance through the marketplace, even after the special enrollment period ends.  

The Act also decreases the cost of the premium that individuals will need to pay (see chart below). These increases in eligibility and decreased cost are limited to 2021 only. 

Household income (as % of poverty line)Household income in dollars for a family of fourThe initial premium percentage isThe final premium percentage is
Up to 150%below $39,7500%0%
150% – up to 200%$39,750 – $52,9990%2%
200% – up to 250%$53,000 – $66,2492%4%
250% – up to 300%$66,250 – $79,4994%6%
300% – up to 400%$79,500 – $105,9996%8.5%
400% and over$106,000 and above8.5%8.5%
How to determine what percentage of the premium a family of four, for example, can expect to pay based on income.

Need additional help?

If you think you may be eligible for Medicaid coverage in Nebraska (which was expanded last fall), visit here: https://dhhs.ne.gov/Pages/Medicaid-Eligibility.aspx

If you have questions, please visit https://www.legalaidofnebraska.org/how-we-help/resources/tax/

Shailana Dunn-Wall (she/her/hers), Christine A. Brunswick Public Service Fellow and Fellowship Staff Attorney at Legal Aid of Nebraska, is the author of this article. Jennifer Gaughan, Chief of Legal/Strateg at Legal Aid of Nebraska, also contributed to this article.


 

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