There are times when it is extremely frustrating to deal with federal bureaucracy.
And then there are times when it works like a charm.
Eleven years after the passage of the Affordable Care Act, which gave every American the opportunity to acquire health insurance, the federal government found a way to make coverage more accessible. Thanks to the latest stimulus law, almost everyone who buys or has bought health insurance through the ACA exchange will see a decrease in their health premiums, according to a study by the Kaiser Family Foundation.
According to Health and Human Services, anyone earning $19,000 or less will not pay a premium at all, and people who make more than $19,000 will see a significant reduction in their premium, up to as much as $1,000 a month.
This change should help the millions of people who lost work due to the coronavirus pandemic — a staggering 20.6 million people, according to USA Today. While many people have managed to find work again, either with their former employer or a new one, millions remain unemployed or underemployed.
Here’s what you need to know about the latest changes to health premiums through the ACA.
What’s Changing and Who is Affected
This ACA coverage option will apply for 2021 and 2022, depending on your employment status. It does not apply to undocumented immigrants, or Americans who live in states that did not expand Medicaid under the Affordable Care Act. You will discover your coverage status when you apply for Obamacare.
The changes are also retroactive to Jan. 1, 2021, which means if you already have health insurance under the ACA, you will be refunded any amount you paid in the first three months of 2021 over your new, lower premium. Healthcare.gov warns that the changes to premium charges may take a while to get fully integrated into the system, so those who already have insurance through the ACA should continue to pay their current premium until the system updates, at which time refunds will be issued and a new premium will be established.
Health insurance under the Affordable Care Act covers the standard comprehensive benefits, which includes prescription drugs and mental health services.
What You Need to Apply
To apply for health coverage under the Affordable Care Act, you begin at www.healthcare.gov. But before you do that, you’ll need to assemble information you will be asked, and it is much like the information you assemble in order to file a tax return.
You will be asked:
- Your income from 2020. That includes your unemployment compensation. The online form you use to file certification for unemployment provides the information on the total amount you have received in unemployment benefits . Your income for the purposes of the ACA is identical to that listed on your tax form.
- Less common income sources. If you withdrew money from a 401(k) or an Individual Retirement Account, that counts as income to the ACA as well.
- Family information. You will also be asked for information about each person in your household, even those not applying for coverage under the ACA. This means you will need information on anyone who files taxes and any tax dependents in your household or in your care.
How the ACA Marketplace Differs from the IRS
The Internal Revenue Service asks for your tax information once a year, and changes in your tax status do not need to be reported until you fill out your next tax form.
But the ACA Marketplace is different in that regard. If, after you sign up for health care under the ACA, you get a job that offers you health coverage, you must contact the Marketplace immediately. Your premium will change if it is determined that your health care option from your employer is considered affordable (in today’s insurance market, that is not always the case).
Either way, you will be allowed to maintain your Marketplace coverage rather than take your employer-offered coverage. That will be a slightly complicated decision that is one of the benefits (or penalties, depending on how you look at things) of getting a job that offers health care coverage.
What if I am Paying for a COBRA Account?
COBRA is the federally guaranteed health insurance coverage program that allows workers who lose their employer-provided health insurance to extend coverage for a period of time.
Under the American Rescue Plan, your COBRA payments will be covered for six months.
Where to Ask Questions
Starting at www.healthcare.gov for answers about getting and paying for coverage under the ACA. There is also a toll-free phone number for Marketplace questions: 1-800-318-2596.
Unlike the IRS, getting questions answered about ACA coverage via a phone call is easy.
Kent McDill is a longtime journalist who has specialized in personal finance topics since 2013. He is a contributor to Codetic.