On Thursday, March 11, 2021, President Biden signed the $1.9 trillion American Rescue Plan Act of 2021 into law. The law provides relief to address the continued impact of COVID-19 on the economy, public health, state and local governments, individuals, and businesses.
As your trusted healthcare partner Blue Cross and Blue Shield of KC (Blue KC) is here to provide useful information about the new law, and what it means to those in our community. The updates below provide information on what this new law means and will continue to provide updates as we learn more from the Biden administration.
The American Rescue Plan includes Affordable Care Act (ACA) enhanced tax credit eligibility that will improve marketplace access and affordability. The new law will lower premiums for most people who currently have a Marketplace health plan and provide financial assistance to consumers who previously did not qualify for premium tax credits.
Starting April 1, 2021, members participating in Marketplace coverage will be able to experience these increased savings and lower costs. Premiums after these new savings will decrease, on average, by $50 per person per month or by $85 per policy per month, according to Centers for Medicare & Medicaid Services (CMS).
- Existing Enrollees with ACA Marketplace Coverage - Starting April 1, individuals who are currently enrolled in a Blue KC ACA Individual and Family Plan -- including those who recently enrolled through the COVID-19 Special Enrollment Period which is available through August 15 –need to update their Marketplace applications to receive enhanced advance tax credits and reduce their premiums for the remainder of the year.
- Unemployed Individuals Eligible for ACA Marketplace Coverage - Individuals who receive unemployment compensation during any week in 2021 may be eligible to receive premium tax credits to pay for 2021 Marketplace coverage. These individuals should apply and select a plan by March 31 to enroll in coverage starting April 1. After April 1, they should return to the ACA Marketplace to update the application and confirm the current plan with the updated tax credits. These individuals qualify for 100% premium tax credit for the silver benchmark plan and the most generous cost sharing reduction plan regardless of their anticipated income in 2021.
- Filing 2021 Taxes – Individuals enrolled in ACA Marketplace Coverage have the option of waiting until they file their taxes next year to receive the additional premium tax credit. However, if they take action before August 15, they may be able to choose a plan with lower out-of-pocket costs. Any retroactive premium tax credits will still be available to them when they reconcile their taxes.
- For more information and details, you may access the Fact Sheets from CMS and HHS.
COBRA and Group Plans
Under the American Rescue Plan, notable changes were made to the COBRA program.
- COBRA beneficiaries now qualify for a temporary 100% subsidy of the COBRA medical premium if their qualifying event was either an involuntary termination of employment or reduction in hours. This subsidy covers the premium and administrative fee for the plan. The subsidy is also available for dental and vision coverage if offered by the employer. The 100% subsidy is available beginning April 1, 2021 through September 30, 2021.
- The new law also offers new enrollment options for those who may have qualified for COBRA on or after October 31, 2019 due to involuntary termination or reduction in hours but declined coverage or dropped COBRA coverage. These individuals now have a new 60-day window to elect COBRA coverage.
To elect COBRA coverage, communication to eligible individuals depends on the size (and potentially the type) of employer:
- Under 20 Employees and Church Groups
Blue KC will send the required notice and election form to eligible individuals who are subject to state continuation (i.e., insured employer groups with less than 20 employees and Church plans if the member and dependents, if applicable, are eligible.) Individuals should complete the “Request for Treatment as an Assistance Eligible Individual” form and the “State Continuation of Coverage Election Form” and return it to Blue KC. Letters will mail in late April to eligible individuals and continue as necessary for any newly eligible members throughout the subsidy period.
- Over 20 Employees
Employers subject to COBRA will provide information to eligible employees based on the new model notices provided by the U.S. Department of Labor (DOL). Members will need to act on this information to take advantage of the COBRA subsidies. Individuals should contact their employer if they have questions or have not received a notice.
Additional information can be found in the Department of Labor FAQs on COBRA Continuation Health Coverage for Workers.
Blue KC will continue to review the content of this new legislation and will provide additional information as it becomes available.