Updated March 12, 2021 – In the largest change to the Affordable Care Act since it became law in 2010, the American Rescue Plan Act of 2021 expands subsidies for those who get their health insurance through the Connect for Health Colorado marketplace, both in the size of tax credits and by making subsidies available to more people who get their health insurance through Connect for Health Colorado and some who get their health insurance through COBRA.
Yesterday, President Biden signed the American Rescue Plan Act of 2021 into law.
The new law is expected to boost tax credits for lower income Americans, increase Connect for Health Colorado’s income thresholds for federal tax credits and cap the amount that many people pay for health insurance to 8.5% of their income, subject to limitations.
Most people who get tax credits on their Connect for Health Colorado health insurance plans will see their premiums decrease. Some lower income Coloradan’s will even see their premiums drop to zero.
Those who get their health insurance through Connect for Health Colorado, but whose incomes were previously too high for tax credits, could see their insurance premium costs reduced to 8.5% of their income. However, there is a catch. Many higher income Coloradans still will not qualify for tax credits, as the tax credits gradually zero out when area’s benchmark silver premiums no longer cross the 8.5% of income threshold.
The Coronavirus Relief Bill reportedly will also cover the cost of COBRA medical insurance premiums for those who involuntarily lost their jobs. The coverage for their and their covered family members’ premiums is said to be limited to April through September of 2021. It’s worth nothing that the short duration may still tip the scales in favor of keeping marketplace coverage over the free COBRA, if already enrolled. The COBRA subsidies will not apply to those who leave work voluntarily and it remains to be seen how those subsidies will be implemented.
The changes are temporary and will last for two years. The exact timeline of when the subsidies will be phased in remains unclear.
“Connect for Health Colorado will develop an implementation plan for the portions of the law which impact Colorado consumers seeking health insurance through our Exchange. We will share more regarding how Coloradans can obtain the savings outlined in the law in the coming months. The financial help changes are in effect through calendar year 2022. Connect for Health Colorado is the only place where Coloradans can get financial assistance for health insurance.” – Kevin Patterson, CEO of Connect for Health Colorado