Frequently Asked Questions about the American Rescue Plan and the ACA Marketplace
The American Rescue Plan offers increased savings and lower costs for many people who buy health insurance directly through the ACA Marketplace.
Starting April 1, 2021, consumers enrolling in ACA Marketplace coverage through getcoveredillinois.gov and HealthCare.gov are eligible to receive increased tax credits to reduce their insurance premiums.
President Biden signed the American Rescue Plan Act of 2021 (ARP) into law on March 11, 2021. The $1.9 trillion economic stimulus bill builds upon many of the measures of the CARES Act and gives more people access to affordable health insurance through the ACA Marketplace by increasing eligibility for financial assistance to help pay for coverage.
The ARP will lower premiums for many people who have an ACA Marketplace plan and expand access to financial assistance for more people. Approximately 14.9 million Americans who currently lack health insurance will be able to save money on their premiums to find the coverage they need at a price they can afford.
Starting April 1, 2021, consumers enrolling in the ACA Marketplace through getcoveredillinois.gov and Healthcare.gov can take advantage of the increased savings and lower costs from premium tax credits. If you already have an ACA Marketplace, you’re also eligible to receive the increased tax credits to reduce your premiums. The premium tax credits are for coverage years beginning in 2021 and 2022.
The tax credit calculation uses a percentage of a household’s income that needs to be contributed on a monthly health insurance premium. This amount is limited based on how their household income compares to federal poverty levels (FPL). Under the American Rescue Plan, individuals and families may be eligible for a temporary increase in premium tax credits (PTC) for this year, with no one paying more than 8.5% of their household income towards the cost of a benchmark plan which means more people will be eligible for higher tax credit amounts.
Taxpayers who receive unemployment compensation during any week beginning in 2021 may be eligible to receive premium tax credits to help pay for 2021 coverage through the ACA Marketplace. Extra tax credits for people receiving unemployment compensation will be available starting in the summer.
Current enrollees should submit an application update at https://www.healthcare.gov. Select “report a life change” to update your application, then click the option for “change to my household’s income,” even if all of the information on the application remains the same.
Once you submit your application update and receive a new eligibility determination, go to the “plan compare” section of the site. Confirm your current plan selection so that your insurance company receives your new tax credit information.
Updates to Advanced Premium Tax Credits (APTCs) generally take effect with your next month’s premium bill. So, updated plan selections made on or before April 30 will result in additional tax credits effective May 1, updated plan selections made on or before May 31 will result in additional tax credits effective June 1, and so on.
Consumers who enrolled in ACA Marketplace plans prior to April 1 can wait until they file taxes next year in 2022 to receive the additional premium tax credit amount (when they file and reconcile 2021 taxes). However, you may be able to choose a plan with lower out-of-pocket costs for the same price or less than what you are currently paying.
Coverage will begin the first of the month after you’ve applied and selected a plan. If you apply before the end of March, your coverage will begin on April 1.
Consumers who are already paying low or no premiums may find plans with more generous cost-sharing and lower out-of-pocket costs.
The ARP forgives any access 2020 Premium Tax Credits (PTC) owed back under reconciliation by taxpayers. To qualify, consumers must reconcile their PTC. People who already filed taxes and made repayments will receive a refund by the IRS (the IRS is expected to release guidance soon on what consumers should do).
The American Rescue Plan gives former employees another fully subsidized coverage option in 2021 by providing federal subsidies to cover 100% of COBRA subsidies for up to 6 months of 2021 (April 1 to Sept. 20). You must be currently eligible for COBRA (lost job/reduction of hours in last 18 months). People who lost their jobs remain eligible even if you did not elect or discontinued COBRA at an earlier point. Employers are responsible for providing notice and open enrollment information to eligible former employees. The Federal COBRA subsidies are for employers with 20 or more employees.
Increased affordability and health insurance coverage expansion will allow historically uninsured communities – especially those who have faced significant health disparities – to access coverage, thereby improving opportunities for health care during and beyond the COVID-19 pandemic.
For more information about the American Rescue Plan and the ACA Marketplace, visit