The American Rescue Plan

President Biden signed the American Rescue Plan Act of 2021(ARP) into law on March 11, 2021. ARP makes improvements in access to and affordability of health insurance through the Marketplace by increasing eligibility for financial assistance to pay for Marketplace coverage.
and more good news…..

ARP Overview

  • The new law will lower premiums for most people who currently have a Marketplace health plan and expand access to financial assistance for more consumers.
  • The enhanced tax credit is available beginning on April 1. Financial assistance is retroactive to January 1 via 2021 tax filing reconciliation for individuals and families that received their health insurance through the Marketplace. 
  • Premiums after these new savings will decrease on average by $50 per person per month, or by $85 per policy per month. 

Current Marketplace Enrollees

  • If a current enrollee chooses not to update their Marketplace account, the increased tax credit will be reconciled with the 2021 income tax return filing in 2022.  You need do nothing and you will receive your additional tax credit in a lump sum after filing.
  • Current enrollees may also change their 2021 plan but must do so by August 15, the 2021 Special Enrollment Period end date. IMPORTANT: current enrollees can choose a new plan, but it is not always the best course of action. When you change plans, the amount you paid towards meeting your prior plan’s deductible can be reset to zero and you would need to start paying out of pocket expenses to reach the deductible on the new plan. 
  • To take advantage of new tax credits, existing enrollees must opt to apply the new subsidy. If you prefer to do it yourself, you can log in to your “healthsherpa” account and see if you have a message indicating you qualify for additional subsidy. If you do, simply select the big green button: “Apply the new subsidy”. If you do not have a message indicating you qualify for a new subsidy, run through your application anyway; not everyone who was eligible received a message.
  • If you would like us to apply your new subsidy to your existing policy, simply reply to Include the name of the primary insured and a request to “Apply the new subsidy to my existing policy”. We will update your tax credit and you will be notified via email of the savings. You can also contact our office at 603-563-8820 and we will let you know if you are eligible for additional savings.
  • If you would like to review the option to change coverage, reply to Include the name of the primary insured and a request to “apply new subsidy and review changing plans”. Our office will contact you to schedule a time to review your options.

Enrollees Outside of the Marketplace or Otherwise Not Tax Credit Eligible

  • Prior to the American Rescue Plan, households had to contribute up to 9.83% of their income, based on a benchmark health plan, to pay for health insurance premium to be eligible for tax credits. Households with income greater than 400% of the Federal Poverty Level weren’t eligible for any assistance to reduce the cost of purchasing a health insurance plan. 
  • Under the American Rescue Plan, individuals and families with income greater than 400% of the Federal Poverty Level may be eligible for a temporary increase in premium tax credits for this year, with no one paying more than 8.5% of their household income towards the cost of the benchmark plan or a less expensive plan. 

Contact our office at 603-563-8820 prior to August 15, with your projected Modified Adjusted Gross Income for 2021 and we can help evaluate if you are now eligible for a tax credit to reduce the cost of your health plan and if it makes sense to change to a Marketplace plan.

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