Specializing in South Carolina Business, Individual and Senior Insurance Solutions

American Rescue Plan Act of 2021

Are you utilizing the Health Insurance Marketplace for you and your family's health insurance coverage? On April 1, 2021, the American Rescue Plan Act of 2021 impacted many Americans' health insurance options in the marketplace. This plan has been extended through March 31, 2025. Review the information from this recently passed legislation with the health insurance experts at Patteson Insurance or with your insurance provider as soon as possible to check your eligibility.

Related: view H.R.1319 - American Rescue Plan of 2021

The recently passed American Rescue Act has legislation regarding health insurance obtained through the marketplace. Beginning April 1, 2021, those who have health insurance through the marketplace may be eligible for greater amounts of financial assistance. In addition, many who did not qualify for financial assistance may now qualify. Individuals currently on unemployment or who have no income may be eligible for a zero-premium plan.

COBRA Election and Premium Assistance

  • This section provides a 100% subsidy for COBRA premiums incurred between April 1, 2021, and September 30, 2021.
  • Eligible employees, referred to in the law as Assistance Eligible Individuals (AEIs), are those:
    • With COBRA eligibility between November 1, 2019, and September 30, 2021, even if they did not previously elect COBRA or elected COBRA and canceled before the end of the term;
    • that lost coverage due to:
      • involuntary termination of employment (other than by reason of gross misconduct); or
      • a reduction in hours;
      • and who enroll in COBRA coverage as of April 1, 2021, or who elect COBRA coverage during the 60-day period following the date they are notified of this premium subsidy and corresponding election

Premium Tax Credit

Improving Affordability by Expanding Premium Assistance for Consumers – Applies to taxable years beginning in 2021 or 2022. Adjusts the determination for premium subsidies in the Exchange. This law temporarily modifies an individual’s eligibility for a subsidy by removing any limitation based on income but, instead, caps the premium at no more than 8.5% of household income. As indicated in the chart below, amounts above the individual’s threshold are reimbursable to the individual based on the lesser of the premium cost or the cost of the second-lowest-cost silver plan in the rating area where the individual resides.

Application Premium Tax Credit in Case of Individuals Receiving Unemployment Compensation During 2021 – Applies to taxable years beginning in 2021 or 2022.

  • In the case of a taxpayer who has received, or has been approved to receive, unemployment compensation for any week beginning during 2021, for the taxable year in which such week begins-
    • such taxpayer shall be treated as an applicable taxpayer, and
    • there shall not be taken into account any household income of the taxpayer over 133% of the poverty line for a family of the size involved, i.e., they are eligible for the maximum premium assistance regardless of actual previous income

Recovery Rebates for Individuals

Additional Recovery Rebates for Individuals – This new credit is in addition to the credit previously paid.
Household Income (expressed as % of FPL) Initial Premium % Final Premium %
Up to 150% 0.0% 0.0%
150% up to 200% 0.0% 2.0%
200% up to 250% 2.0% 4.0%
250% up to 300% 4.0% 6.0%
300% up to 400% 6.0% 8.5%
400% and higher 8.5% 8.5%
  • For the tax year beginning in 2021, eligible individuals will receive a credit based on the above chart. 
    • $1,400 per adults ($2,800 married filing jointly) plus $1,400 for each dependent of the taxpayer
    • Applies to individuals with adjusted gross income up to $75,000 per taxpayer, $112,500 for the head of household, or $150,000 for married filing jointly.
    • Credits are not available for taxpayers with income over $99,000, $146,000 for the head of household, or $150,000 for married filing jointly.
    • No payments will be made for any taxpayer deceased before January 1, 2021.
  • Eligibility is anyone who is not a nonresident alien individual or any individual claimed as a dependent of another taxpayer or an estate or trust.
  • Receiving the Rebate. Generally, a credit increases the amount of your tax refund or decreases the amount of taxes owed. The amount you receive for the Recovery Rebate Credit will be included as part of your refund or applied to any tax owed.
Patteson Insurance | Specializing in Business, Individual, and Senior Insurance Solutions

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