What Does the Relief Bill Mean for Health Insurance?

On Thursday, March 11, 2021, President Joe Biden signed the American Rescue Plan, a $1.9 trillion relief bill in response to the ongoing coronavirus pandemic.

This most recent relief bill aims to provide ongoing financial support to Americans continuing to struggle with financial hardships as a direct result of the pandemic. In addition to providing updates to unemployment payments and another round of stimulus checks for eligible recipients, the latest relief bill provides significant updates to healthcare.

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COBRA

Under normal circumstances, unemployed individuals have the availability to enroll in COBRA (Consolidated Omnibus Budget Reconciliation Act) within 60 days of their layoff. COBRA allows individuals to purchase insurance through their former employer, but typically at a significantly higher cost. Often COBRA recipients are required to pay at least 102% of the cost of their plan premium.

The updated relief bill provides changes to the state of COBRA by agreeing to pay the entire COBRA premium from April 1 to September 30 for those who have lost their job or had their hours significantly cut.

Should a worker qualify for new employer-based health insurance coverage at a new employer prior to September 30, they will lose eligibility for the no-cost coverage. Additionally, workers that voluntarily lost their jobs are ineligible for this coverage.

Health Insurance Cost

In addition to updates to COBRA premium costs, the recently passed legislation includes details with regards to the affordability of general health insurance. The legislation lowers the cost of health insurance for people who receive their own coverage via a government exchange. The premiums for those plans will cost no more than 8.5% of one’s modified adjusted gross income. These changes will last through the end of 2022.

For those that do not currently have health insurance but would, given an affordable option, now is the perfect opportunity to do so. Open enrollment is currently active due to COVID-19 and will remain open through May 15.

This is not only an opportunity for recipients to enroll for the first time, but is also an opportunity to change and adjust coverage if necessary. It may be the perfect time to attempt to lower the cost of your current plan or to add on a more generous plan based on your individual needs.