American Rescue Plan: Health Insurance

Overview

ThAmerican Rescue Plan provides assistance for individuals to pay for COBRA continuation health coverage or to purchase health insurance on the ACA marketplaces. 

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COBRA
The American Rescue Plan includes premium assistance that covers 100 percent of the premiums for COBRA continuation coverage for eligible individuals and families from April 1 through September 31, 2021. This will allow individuals who lost their job-based health insurance to keep their coverage and receive federal funding to pay for the full COBRA premium.

  • COBRA coverage lets people who have job-based health coverage keep it for a period after they involuntarily lose their jobs or experience a reduction in hours that leads to them losing their insurance. Usually, people have to pay the full cost of the premium on their own. 

The bill also provides for an extended election period to allow individuals who previously experienced a qualifying event to enroll in subsidized COBRA coverage. Please speak with your employer and health plan if you think you may be eligible for COBRA premium assistance. 

ACA Marketplace Plans
ThAmerican Rescue Plan alssignificantly reduces premiums and for some individuals reduces deductibles for ACA marketplace plans for 2021 

  • It increases premium tax credits, which will eliminate or reduce premiums for most current marketplace enrollees. 

  • It also eliminates the “subsidy cliff” to ensure that working families earning more than 400 percent of Federal poverty will be eligible for marketplace premium subsidies, and will spend no more than 8.5 percent of their income in premiums. 

  • In addition, the American Rescue Plan exempts low- and moderate-income families from having to repay the premium tax credit they received in 2020. This will protect people who experienced unexpected changes in income in 2020 from having high repayments when filing their taxes. 

  • The American Rescue Plan also includes protections for people who have recently lost their jobs. It guarantees that people who receive unemployment benefits in 2021 receive the most generous premium tax credits if they enroll in an ACA marketplace plan for 2021.