Last year was a turbulent time for the insurance industry. In 2020, we saw the advent of COVID-19 which resulted in historically high unemployment rates. In turn, widespread job loss caused more than 6 million Americans to lose their employer-sponsored healthcare plans. Going into 2020 the insurance industry —as well as the nation— is at an inflection point. In response, the Biden administration extended the coverage provided by the Affordable Care Act (ACA). Those changes are designed to benefit both consumers and insurance brokers nationwide. Here’s how consumers take advantage of the extended ACA enrollment window.
Understanding the Extended ACA Enrollment Filing Period
In March 2021, President Biden signed the American Rescue Plan Act (ARPA) into law. While the law’s primary focus was on the sweeping economic stimulus contained therein, the bill also included reforms aimed at expanding ACA access to more Americans.
While the normal ACA enrollment period differs on a state-by-state basis, largely affected by each state’s participation in the national exchange, the deadline for enrollment is generally May 15th. However, the combination of a new administration coupled with new and extensive legislation has caused the government to extend the deadline to August 15th so that consumers, employers, and brokers can digest the bill’s provisions.
Important Changes Under the American Rescue Plan
A significant portion of the ARPA bill seeks to provide a remedy to the sheer amount of Americans who’ve lost coverage —or those who simply can’t afford premiums and out-of-pocket costs. To that effect, the law implements new subsidies and changes the income requirements in order to be eligible for exchange-based coverage.
Under the previously-enacted ACA rules, households earning more than 400% of the federal poverty level (FPL) were ineligible. The ARPA bill eliminates that stipulation. Households making more than 400% of the FPL are now eligible to receive federal tax credits.
More meaningful, however, is the level of subsidy now available to households regardless of income level. For example, households making 100% to 150% of the FPL would pay nothing for exchange-based healthcare coverage. Consumers with mid-range salaries must contribute between 4% and 6% of their yearly income for coverage, down from 9.83% previously. For the highest income levels (400% FPL), the dollar amount caps at 8.5%.
The end result? Healthcare coverage is available and affordable to millions of Americans.
ARPA is an olive branch to millions of Americans affected by COVID-19. Now, with the augmented enrollment period available, it’s up to brokers and insurance professionals to leverage the tools contained in the bill to obtain as many enrollees as possible.
The subsidies included in the ARPA legislation are impactful. Their scope and magnitude are significant enough for brokers to use them as a marketing tool to directly target different employee demographics. In many cases, the new subsidies will make healthcare premiums free or low cost. Educating clients about the value of these subsidized, exchange-based health care plans will result in a windfall of new enrollments. With the tools that ARPA provides, brokers restore adequate healthcare coverage to the millions of Americans who’ve lost their employer-sponsored coverage.
Additionally, companies can and should make sure members of their workforce understand this healthcare coverage option. Affordable healthcare coverage plays an important part in employee satisfaction and productivity, even if it’s not the employer-sponsored option.
Inform Employees about the ACA Enrollment Window
The information contained in the ARPA bill is extensive. Indeed, it will likely alter the insurance landscape for the next few years as America rebuilds. The additional three-month enrollment window gives brokers, employers, and consumers the opportunity to digest the new legislation in its entirety. Benefits Zone can help benefits professionals highlight the extended enrollment period and communicate the benefits to their employees or clients.