How to Get Health Insurance Subsidies If You've Been Unemployed

During the height of the COVID-19 pandemic, more than 16 million Americans lost their jobs and their employer-sponsored health insurance, as per the Employment Policy Institute. To ensure the affected workers did not lose their health insurance policies, the federal government implemented the American Rescue Plan Act in 2021, which lowered or eliminated health care insurance costs and provided 100% Consolidated Omnibus Budget Reconciliation Act (COBRA) subsidy to eligible individuals. COBRA health insurance plans are typically more expensive compared to group insurance policies. While the COBRA subsidy expired on September 30th, you can still get your health insurance subsidy if you have been unemployed. Read on to learn more.

 Importance of Health Insurance Subsidies

The ARP health insurance subsidies help lower the cost of employer-provided health insurance for people who are out of work. They provide relief by covering both premiums and a portion of the out-of-pocket costs as follows:

• Full-premium subsidies provide full coverage for the second-lowest-cost Silver plan in your area. If you pick a plan that costs more than the benchmark plan, then you'll have to pay some premiums every month.
• Cost-sharing subsidies lower the overall out-of-pocket costs and boost the benefits of your Silver policy.

Eligibility for Unemployment-Based Health Insurance Subsidies

Not everyone who lost a job with employer-sponsored coverage is eligible for health insurance unemployment subsidies. To qualify for the subsidies, you:

• Must have been approved to receive unemployment compensation at any time in 2021- This means that even if you qualify to receive unemployment compensation, you are ineligible for health insurance subsidies if you haven't enrolled in the program and received approval in 2021. You're eligible for these subsidies even if you only received unemployment compensation for one week in 2021.
• Must be earning below the federal poverty level - Currently, the federal poverty level (FPL) is $12,880 for individuals and $26,500 for a family of 4. If you're earning below these figures, you will likely qualify for health insurance premium subsidies.
• Must be ineligible for Medicare and Medicaid - Provided you qualify for Medicare or Medicaid health insurance, you're ineligible for health insurance unemployment subsidies even if your income is under the federal poverty level.

Take note that only taxpayers who receive unemployment compensation can get full premium subsidies. If you're a dependent receiving unemployment compensation, you will only qualify for cost-sharing reductions.

How to Get Health Insurance Unemployment Subsidies

You can apply for health insurance unemployment subsidies, provided you meet certain requirements. Here, you simply need to log into the HealthCare.gov website and update your application in your account. By doing this, you will have activated your subsidies. If you have an alternate enrollment entity, you can also use it to update your application.

Some state-based marketplaces are capable of updating applications automatically for every applicant whose account indicates having received unemployment compensation in 2021. Therefore, if you've enrolled through such a marketplace, you may not need to reapply for subsidies. However, make sure to log into your account to check whether or not you're receiving the subsidies. Remember, once you update your application, it will take about two weeks or more to start receiving your health insurance unemployment subsidies. Also, if you don't update your enrollment, you will still be able to claim your premium subsidy when filing tax returns for 2021.

How to Take Full Advantage of Health Insurance Subsidies

The American Rescue Plan allows eligible individuals to access full-premium and cost-sharing subsidies to lower their health insurance costs. Do you want to get the right health insurance? If so, then contact the experts at Club Agency Insurance Brokerage.  Our dedicated team is eager to assist you with all your coverage needs today.