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How the American Rescue Plan Impacts the Unemployed, Contractors, and Part-time Workers

We previously outlined some of the key provisions of the American Rescue Plan (ARP) and how they will impact ACA enrollments, as well as key information and dates you need to know as an agent in order to assist your customers during the COVID-19 Special Enrollment Period.

In this article, we’ll go into more detail on one of the customer segments impacted by ARP’s expanded subsidies, especially those who received unemployment insurance at any point in 2021, that don’t have access to job-based health benefits currently, and the unemployed.

Other customer segments are discussed in detail in separate articles and include:

Unemployed in 2021

As part of the ARP-expanded ACA subsidies, anyone who otherwise qualifies to enroll in an ACA plan and receives at least one week of unemployment compensation at any point in 2021 qualifies for “enhanced” financial assistance in the form of a $0 premium Silver plan and any income above 133% of the FPL will be disregarded.[1]

The enhanced subsidies will be available beginning in July 2021.[2]

Notably, ARP did not address the ACA’s “family glitch” so the enrollee still has to qualify based on not having an affordable employer-provided option available through their spouse or another family member.[3] For those with access to employer-sponsored health coverage, the 9.83% rate for 2021 stands for now.[4]

100% Subsidized COBRA Premiums

A few important eligibility details pertaining to ARP’s impact on COBRA premiums are included below to help agents navigate options with their customers. For more detailed information about the implementation of COBRA premium subsidies, please see the U.S. Department of Labor COBRA Premium Assistance under ARP FAQ.

COBRA subsidies provide a 100% subsidy of premium to the employer beginning April 1, 2021, through September 30, 2021. Employers recoup the missing premium through Medicare tax credits.[5]

Determining if a customer is an “Assistance Eligible Individual” for ARP’s COBRA premium assistance.

An individual may be eligible for $0 premium COBRA for up to a 6-month period from April 1, 2021, through September 30, 2021, if they:[6]

  • Lost health benefits due to involuntary termination or reduction in hours not related to gross misconduct.
  • Are not able to access other qualifying group health coverage such as through a new employer, spouse’s plan, or Medicare.
  • Elect COBRA continuation coverage.

Additionally, if the 6-month COBRA subsidy window overlaps at any point with an individual’s COBRA eligibility period, regardless of whether or not they previously elected COBRA, they may still be able to obtain the $0 premium group coverage for a period of time (up to 6 months as long as they continue to be eligible for COBRA).[7]

Determining eligibility for an additional COBRA continuation coverage election opportunity.

If a customer is an Assistance Eligible Individual and was previously offered COBRA and declined it or discontinued it, they may be eligible for a second COBRA election opportunity if the maximum period they would have been eligible for COBRA coverage has not yet expired (typically 18 months).[8]

For example, a person otherwise COBRA-eligible who was laid off in April 2020 due to their workplace closing and without access to other qualifying coverage, even if they declined COBRA continuation coverage in April 2020, has a chance to change their election to obtain $0 premium coverage beginning April 1, 2021.[9]

An Assistance Eligible Individual who is eligible for a second (or extended) COBRA election period must be provided notice of eligibility by May 31, 2021. Individuals have 60 days after the notice is provided to elect COBRA.[10]

Contractor, Working Part-Time or No Employer Health Coverage

Those currently working but without access to employer benefits (e.g., contractor or part-time worker) may have two options for subsidized ACA plans:

  • A $0 premium Silver plan if they received unemployment compensation for at least one week at any point in 2021.
  • ARP-adjusted income-based ACA subsidies due to increased subsidies for lower-income earners and expanded subsidies for those at or above 400% FPL.

It’s estimated that increased subsidies for lower-wage workers will result in 3.4 million enrollees eligible for a 100% decrease in their premium contribution (meaning a $0 premium ACA plan option).[11] Learn more about how ARP impacts those at 100% to 150% FPL and how to help these customers.

And for the first time, individuals with an annual income as high as $51,050 will be eligible for premium tax credits.[12] Learn more about expanded subsidies to those at or above 400% FPL and how to help these customers.

The Unemployed in States that Have Not Expanded Medicaid

ARP’s expanded unemployment subsidy is not limited to people at 100% FPL or higher, so may be particularly beneficial for people that live in non-Medicaid expansion states as they’ll now qualify for a $0 premium Silver plan if they collected unemployment insurance at any point in 2021 even if their income is under 100% FPL.[13]

This is significant because up until this point residents in states that have not expanded Medicaid eligibility may be unable to qualify for Medicaid based solely on income.

Medicaid expansion was a critical provision of the ACA legislation that decreased the number of uninsured. The intention was that anyone who fell under 100% FPL (the lowest FPL level to qualify for an ACA subsidy) would be caught by a state’s Medicaid program.

However, not all states opted for Medicaid expansion. These are referred to as “non-Medicaid expansion” states and currently include:[14]

  • Alabama
  • Florida
  • Georgia
  • Kansas
  • Mississippi
  • Missouri (in the process of expanding Medicaid in 2021)
  • North Carolina
  • Oklahoma (in the process of expanding Medicaid in 2021)
  • South Carolina
  • South Dakota
  • Tennessee
  • Texas
  • Wisconsin
  • Wyoming

How to Help Customers Who Experienced Unemployment

If you have groups that have lost enrollees due to layoffs, it may be a good idea to reach out to those individuals and advise them about $0 premium Silver plans as well as the option to access 100% subsidized COBRA coverage from April through September 2021.[15] Remember, during the COVID-19 Special Enrollment Period anyone that qualifies to enroll in an ACA plan can do so (or switch plans).

When counseling individuals, even if your customers didn’t experience unemployment, they may have an adult child, neighbor, family member or know someone who would qualify and benefit from enrolling in a $0 premium ACA plan.

Since the enhanced financial assistance won’t be available until July 2021,[16] you can either wait to enroll a customer in a plan at that point if they’re in an FFM state (where the COVID SEP runs through August 15, 2021), or you can enroll them prior to July if they can afford to pay a monthly premium based on their income level, then update their application and enrollment again in July to ensure they’re enrolled in a $0 premium Silver plan.

What to do:

  1. Send your customers the INSXCloud digital Applicant Intake Form and ask them to validate and update the information so you can determine subsidy eligibility and plan options.
  2. Pay special attention to eligibility questions #4 and #5, which ask if the applicant is currently eligible for COBRA or will be eligible for COBRA in 2021. Applicants may not be aware of the 18-month COBRA eligibility period when responding to this question, so it’s worth following up if there are any ambiguities or inconsistencies in their responses.
  3. If you determine that your customer does not qualify for $0 premium COBRA continuation group coverage, you can then proceed to determine subsidy eligibility and quote and enroll in ACA plans.
  4. If a customer does qualify for COBRA subsidies, determine when their COBRA eligibility period ends and plan to enroll them in a subsidized ACA plan at that time as long as they still qualify.[17]

Note that after September 30, 2021, customers will again be responsible for the 102% premium cost of their group plan if they’re still within the COBRA eligibility window. A customer can opt to discontinue COBRA at that point, and according to existing eligibility rules, to qualify for an ACA special enrollment period should be able to enroll in an ACA plan at that time.[18]

Next Steps for Agents

Be proactive. Expanded subsidies are available to your customers now – make sure they don’t miss out on advance premium tax credits or affordable coverage options that are newly available to them as part of ARP.

Remember, INSXCloud helps you quickly and easily complete the necessary steps to determine subsidy eligibility and enroll qualifying customers in ACA plans in FFM states by providing:

Not yet using INSXCloud? Don’t wait. It’s free (and quick) to sign-up when you contract with IHC Specialty Benefits.

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