American Rescue Plan: More Affordable Health Insurance (& Other Relief)
Congress recently passed the American Rescue Plan Act of 2021 (ARPA) in order to provide relief to people impacted by the COVID-19 pandemic, including independent workers like you. The American Rescue Plan is a $1.9 trillion dollar stimulus package that includes an expansion of the Affordable Care Act to make health insurance more affordable, stimulus checks, extra unemployment benefits, an expanded Child Tax Credit, emergency rental assistance, aid for childcare, a tax-free COBRA subsidy, and more.
More Affordable Health Insurance: The Details
The American Rescue Plan makes health insurance more affordable for more people than ever before. With the expansion of the Affordable Care Act thanks to the ARPA, four out of five enrollees will be able to pay $10 or less per month for health insurance. Put simply, if you already qualified for savings before, you qualify for even more savings now; if you didn’t previously qualify for savings, you likely will now. Read on for more details.
Before this expansion of the Affordable Care Act, people were only eligible for subsidies if they made 100 to 400% of the federal poverty line, meaning subsidies were limited to people below a certain income limit. With the expansion, people who make above 400% of the federal poverty line now qualify for health insurance savings (the income cap has been removed). The ARPA caps plan prices at 8.5% of your household income. To put this into perspective, a 60 year old couple with an annual household income of $69,854 (401% of the federal poverty line) will now save $1,425 per month and $17,102 per year!
Additionally, the ARPA expansion increases savings amounts for anyone who already qualified for subsidies with a household income of 100 to 400% of the federal poverty line. If you are already enrolled in an ACA plan, your monthly premium will not be automatically lowered (unless you enrolled through Covered California!).
Options If You Already Have an ACA Plan
If you are already enrolled in an ACA plan, your monthly premium won’t be automatically lowered to reflect these new savings (unless you enrolled through Covered California!). Instead, you have two options:
Take no action and the extra savings you are eligible for will be refunded to you as part of your 2021 tax refund.
Check out the plans available to you now with the new ARPA savings. You can either update your current application and reselect your existing health plan to start seeing your savings (and reduced monthly premium) immediately OR you can head over to Stride to see if you qualify for a better plan at a lower cost. If you find a new plan you want to enroll in, Stride will help you cancel your existing plan and get you covered with your new plan.
What to Do If You Don’t Have Health Insurance
Great news! Thanks to a new enrollment period, you now have until August 15th to enroll in a health insurance plan. If you didn’t qualify for savings on your health insurance before, head over to Stride to see how much you can save now! This expansion makes health insurance much more affordable across the board, regardless of your household income.
All the Other Good Stuff
The American Rescue Plan didn’t just impact health insurance. It also provides additional relief through stimulus checks, extra unemployment benefits, an expanded Child Tax Credit, emergency rental assistance, aid for childcare, a tax-free COBRA subsidy, and more. Read on for some of the highlights that might help you get through the rest of the pandemic.
Stimulus Checks
First up: stimulus checks. The ARPA includes a third stimulus check of $1,400 for single people with an income less than $75,000 or married couples with an income less than $150,000. If you have any dependents you claim on your tax return, you’ll receive an additional $1,400 per dependent. Your stimulus check will be based on your 2020 or 2019 tax return (depending on which you’ve filed already).
Extra Unemployment Benefits
The ARPA extends the three original federal unemployment expansions from the CARES Act through September 6 of this year. This includes the expansion that allowed 1099 workers to apply for unemployment benefits. You can continue collecting $300 extra per week for this time period. In addition, if your household income is under $150,000, the first $10,200 you receive in unemployment benefits will be tax exempt!
Expanded Child Tax Credit
The Child Tax Credit has been increased! If you have kids 5 and under, the credit is $3,600 per child. For kids over the age of 6, the credit is $3,000 per child. The Child Tax Credit maximum was previously $2,000. Additionally, the Child Tax Credit will now be paid out monthly instead of being applied at tax time. You can expect your first check in July.
Emergency Rental Assistance
Have you struggled to pay your rent and utility bills during the pandemic? The ARPA includes $21.6 billion in aid to help people pay overdue rent and utility bills.
Aid for Childcare
Many essential workers have struggled to find (and pay for) childcare during the pandemic. The ARPA includes $39 billion to support childcare programs, including those for essential workers in need of childcare, regardless of income.
Tax-free COBRA Subsidy
If you lost health coverage through an employer due to a reduction in hours or involuntary termination, the ARPA requires employers to cover 100% of the cost for keeping you on the group health plan for up to six months. An important note: this does NOT apply if you voluntarily terminated your employment.
Get the Coverage You Need
Be sure to take advantage of the opportunity to enroll in health insurance with extra savings. You have until the end of the month to enroll for coverage starting on the first of the following month. Remember: this new enrollment period that allows anyone to enroll ends August 15th. We're here for you in this time of uncertainty and our award-winning support team is happy to answer any questions and help get you covered.