Due to the recently signed American Rescue Plan Act, also known as the “2021 COVID Relief Bill,” more people are eligible for the first time for Affordable Care Act (ACA) premium tax credits if they enroll in an ACA plan on HealthCare.gov (or their state’s Exchange).
The quickest way to figure out if you’re eligible is to utilize an ACA Subsidy Calculator.
If you qualify for a premium tax credit it’s important to take action right away during the COVID-19 ACA Special Enrollment Period (through August 15, 2021, in most states).
Unless you qualify for an individual special enrollment period, this may be the only time until the next ACA Open Enrollment Period to either apply or update your existing application in order to take advantage of premium savings.
Still don’t qualify? Learn about options if you don’t qualify for an ACA Marketplace plan or subsidy.
In the remainder of this article, we’ll cover:
- What to do if you qualify for an ACA premium tax credit for the first time
- What to do if you now qualify for an increased premium tax credit
How to Enroll in a Subsidized ACA Plan for the First Time
You can access subsidies that you qualify for by enrolling in ACA-qualifying coverage either through the federal exchange (HealthCare.gov) or your state’s marketplace. If you want to use a cost-sharing reduction, you’ll need to enroll in a Silver metal level plan.
If you qualify for subsidies and it makes coverage affordable, an ACA health plan is a good option for most people as it’s the most comprehensive health coverage available. These plans may be especially helpful if you tend to use preventive healthcare services or have an existing health condition you’re managing.
- Have no annual or lifetime limits for the essential health benefits
- Are guaranteed-issue
- Have no-cost preventive care
What to do next:
- Go to HealthCare.gov or your state’s Exchange and begin the application process.
- After inputting some basic information about your income, age, location, and number of household members that need coverage, you’ll be provided a range of plan options to choose from.
- Review the different plans available (Bronze, Silver, Gold) and select one with a premium and cost-sharing level that is the best fit for your healthcare needs and finances.
Consider supplemental benefits: Because of the increased tax credits, many people qualify for a more affordable Silver premium or even $0 premium Silver plan, which also means lower out-of-pocket costs. However, if you’re opting for a Bronze plan, you may find that you still have a higher deductible. In that situation, supplemental gap health insurance may be able to help.
Supplemental benefits don’t constitute major medical coverage as they do not meet the minimum essential coverage requirements of the ACA. However, these plans are designed to be used alongside an ACA plan to help with your major medical deductible and other out-of-pocket healthcare costs. Learn more about how supplemental insurance can help.
Find out how much a medical gap policy could cost you, shop, and enroll.
How to Access Increased Tax Credits When Already Enrolled in a Subsidized ACA Plan
If you already have a subsidized ACA plan either through HealthCare.gov or your state’s Exchange, login to your account and update your application as soon as possible.
Your new eligibility results will include the additional tax credit amount if you qualify. You can either reselect your current plan for the additional premium savings to take effect, or select a different plan.
If the additional tax credits put a Silver plan in reach, up to and including a 100% subsidized premium, the Silver plan is likely the better option since it also lowers out-of-pocket costs. In effect, it is possible you can reduce your out-of-pocket costs while paying nothing more in premium by upgrading plans.
Note that if you do change plans, your deductible will likely reset, meaning if you’d already paid $500 towards an annual deductible of $1,000, you’ll lose that $500 “credit” and start at $0.
If you find that you have additional money in your bank account after going through the updating process, you may want to consider putting some of it towards additional benefits like dental or vision coverage, both of which can be purchased away from the ACA Exchanges.
If you do not update your application
If you do not update your application you will still see the additional tax credit you qualify for reflected on your tax returns in a lump sum when you file. However, it could mean you miss out on additional out-of-pocket savings if you don’t take advantage of the $0 Silver upgrade should you qualify.
If you’d like to speak to a licensed agent for assistance or to get specific questions answered, call 888-855-6837 and speak with someone today.
Summary + Next Steps
The 2021 COVID Relief Bill has expanded access to subsidies for many, and increased the subsidy amount for others. When you’re subsidy-eligible, the best place to obtain coverage is from the ACA Marketplace.
Additional supplemental health benefits may be a good idea to help with a high deductible or to access dental benefits. Supplemental coverage can be purchased away from the Marketplace, either directly from insurance carriers or private exchanges.
Want professional help assessing your options? Call 888-855-6837 to speak with a licensed insurance agent today!
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