The federal Department of Health and Human Services (HHS) has announced that the higher premium tax credits enacted through the American Rescue Plan Act (ARPA) for purchasing coverage in the exchange marketplace will be available starting April 1, 2021. HHS also announced an extension of the current special open enrollment period to sign up for or change coverage through the exchange marketplace. The extension moves the end of the special open enrollment period from May 15 to Aug. 15, 2021.
ARPA makes several changes to the premium tax credits available for purchasing coverage through the health insurance exchange. In particular, the tax credits currently available to individuals and families with income between 100% of the federal poverty level (FPL) and 400% FPL for calendar years 2021 and 2022 are increased. The increases mean that those at the lowest income levels up to 150% FPL (about $19,300 for a single person and $39,750 for a family of four) will be able to access coverage with no premium cost, and those at higher income levels will see reductions in premiums. Tax credits are also now applicable to individuals with income above 400% FPL. A report by the Center for Budget and Policy Priorities estimates that a family of four in Wisconsin with income of $120,000 per year (458% FPL) could see a reduction in their monthly premium of more than $600 as a result of these changes.
HHS indicates that current enrollees should submit an application update on or after April 1. The tax credit changes will take effect with the premium bill after a new application or updated application is made. For example, applications or updates made on or before April 30 will result in premium tax credit increases effective May 1; those made on or before May 31 will result in premium tax credit increases effective June 1; etc.
In addition to the above changes, ARPA expands tax credits and cost sharing subsidies to individuals who received unemployment benefits during any week in calendar year 2021 so premium tax credits and cost sharing reductions for calendar year 2021 would be applied as if the individual had household income of 133% FPL, regardless of the person’s actual income. According to HHS, these changes are expected to be made in early July.