The New Law

President Biden signed the American Rescue Plan Act of 2021 (ARP) into law on March 11, 2021. ARP makes major improvements in access to and affordability of health coverage through the Marketplace by increasing eligibility for financial assistance to help pay for Marketplace coverage. 

The new law will lower premiums for most people who currently have a Marketplace health plan and expand access to financial assistance for consumers new to the Marketplace. 

Under the new law, many people who buy their insurance through the Marketplace will become eligible to receive increased tax credits to reduce their premiums. 



Starting April 1, 2021, consumers enrolling in Marketplace coverage will be able to take advantage of these increased savings and lower costs. 

Lower costs and expanding access

Under the American Rescue Plan:

• Individuals and families may be eligible for a temporary increase in premium tax credits for this year, with no one paying more than 8.5% of their household income towards the cost of the benchmark plan or a less expensive plan. Meaning, many consumers will be eligible for higher tax credit amounts to help cover their Marketplace health plan premiums. 
• Individuals and families get a temporary boost in their premium tax credits. 
• Most people across all household income levels will see lower premiums as a result of receiving more tax credits to reduce plan prices. Many consumers with household incomes from 100% to 150% FPL would have $0 premium plans (after tax credits) available to choose from when considering their options and selecting a plan. 
• Taxpayers who receive unemployment compensation during any week beginning in 2021 may be eligible to receive premium tax credits to help pay for 2021 Marketplace coverage. 

Background on how premium tax credits work

For consumers who are eligible for premium tax credits to help purchase a Marketplace plan, an individual or a family’s tax credit amount is calculated based on the following factors: 

• Household’s total expected income for the year 
• Total number of people in the household that file taxes together 
• The premium amount of the second-lowest cost Silver plan in the consumer’s area in the Marketplace. This is the “benchmark” plan cost used to calculate premium tax credits. It’s not related to which plan a consumer actually chooses to enroll in.
• The tax credit calculation uses a percentage of the household’s income that they need to contribute (spend) on monthly health insurance premiums. This amount is limited based on how their household income compares to federal poverty levels (FPL). 
• After the coverage year, consumers who had a Marketplace plan with premium tax credits during the year will need to file their federal income tax return for that year and reconcile the amount of tax credits they received in advance with the final premium tax credit calculation as a part of their tax return. If their house income turns out to be higher than what they estimated on their Marketplace application, the household may need to pay back some or all of the excess premium tax credit they received in advance as a part of filing their tax return. Depending on the circumstances the amount owed back may be capped. 

Now is the Time to Take Action

• We are scheduling appointments NOW to update your Marketplace application or to enroll new consumers in a Marketplace plan. 
• If you have an existing plan, you MUST have an updated application in order to receive the ADVANCED premium tax credit.

The only thing you need to do is make a quick call to our office, and let us handle the rest. 

Call 706-257-5073 today! 

Reference: Centers for Medicare and Medicaid Services