More Good News:  ACA Marketplace Plans More Affordable

In my March 21 blog, I outlined how the American Rescue Plan Act builds on the Affordable Care Act (ACA) state marketplaces and the premium tax credits. Now some more good news!  

The special open enrollment period for signing up for an ACA state marketplace plan has been extended to August 15!  

This gives everyone more time to go to HealthCare.gov and see how their premiums go down and look at options to change plans.

To highlight key American Rescue Plan changes to the ACA premium tax credits that lower the cost of a health insurance plan  - because they are so amazing:

• Larger premium tax credits are now available that lower your share of the premium for an ACA marketplace health insurance plan
• This additional help is available to people who are currently eligible and to anyone who newly signs up by August 15
• There is no income cap on who is eligible for a premium tax credit to lower the cost of a health insurance plan. No one has an income too high for financial help.  
• The American Rescue Plan lowers the share of premiums that a person must pay so that everyone will see cheaper premiums no matter your annual family income.  
• For folks with family incomes under 150 percent of the Federal Poverty Level (FPL), your share of premiums will be ZERO.  (150 percent of FPL depends on your family size; for an individual it is $19,140 a year and for a family of three it is $32,580).  
• People above 400 percent FPL will no longer face a premium tax credit “eligibility cliff.” All middle- and upper-income individuals who purchase their own coverage could be eligible for a premium tax credit such that their premiums do not exceed 8.5 percent of their overall household income. 
• The changes will be in place on April 1 for 2020 and 2021. For those who already purchased a plan on the ACA marketplace, to reduce your share of premiums for the rest of this year you need to go to HealthCare.gov and reset your information.  If you don’t take action, you still will have the additional premium tax credit applied when you file your taxes (now due May 17 for 2020) and it could reduce what you owe or the size of your tax refund. 
• The American Rescue Plan forgives any premium tax credit overpayment for tax year 2020! It doesn’t matter why or how much you received in premium tax credits over the normal allowed amount – you won’t owe it back when you file your taxes.

If you received Unemployment Insurance for one week or more in 2020 – Read this!

The American Rescue Plan creates a special rule for ACA premium tax credit eligibility and unemployment compensation. A taxpayer who has received, or has been approved to receive, unemployment compensation for any week during 2021 will be eligible for the maximum premium tax credit – including no-premium ACA marketplace health insurance.  This change won’t be immediately available on HealthCare.gov but it is coming!  Stay tuned for more details.  We are not yet clear what you may have to show or what documents you may need to get this benefit.

And West Virginia takes steps to increase the ACA state marketplace premium tax subsidy!

West Virginia will be joining most other states in a practice that health policy wonks call “silver loading.”  It is an approach to pricing health insurance plans on the ACA state marketplace that both insurers and consumers support.  Basically, a person’s premium tax credit protects that person from spending more than a certain percentage of their family income on the premium for a “benchmark” health insurance plan.  That is how the premium tax credit dollar amount is calculated.  Once that dollar amount is set, then a person can use those dollars toward the cost of the premiums of any plan offered on the ACA state marketplace.  

So if the benchmark plan’s premiums go up, so does the dollar amount of the premium tax credit.  Insurance companies offer many different plans on the marketplace.  To adjust premiums for medical inflation and other factors, an insurance company can raise prices across the board for all their products on the marketplace, or just raise the price on the benchmark plan.  Either way the insurance company covers their increase in costs from medical inflation, etc.  The Office of the Insurance Commissioner has just decided that it is ok for an insurance company to load their premium increases more heavily onto just the benchmark plan – which is the second lowest silver plan offered. Thus the term “silver loading.”  

Whew.  It is confusing - but the bottom line is that West Virginia has taken a positive step to increase the dollar amount of premium tax credits for West Virginians who buy plans on the ACA state marketplace!