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The American Rescue Plan

Date: 04/01/21

How the new legislation impacts the ACA.

On March 11, President Biden signed the American Rescue Plan with immediate impacts on the Marketplace. The law extends many COVID-19 relief programs already in place and includes provisions impacting the Marketplace.

Two sections of the new law impact current and prospective Marketplace members:

  1. Marketplace APTC subsidies will be enhanced for 2021 and 2022, allowing eligible consumers to receive more APTC than under current law and eliminating the “subsidy cliff” at 400% FPL
  2. People receiving unemployment in 2021 will be treated as earning no more than 133% FPL, unless they are otherwise eligible for Medicaid

1. APTC subsidies will be enhanced for 2021 and 2022 (“Enhanced APTC”)

  • What it does: Lowers consumers’ required contributions at all income levels thereby increasing APTC. Individuals earning 100-150% FPL will be eligible for fully subsidized coverage. Additionally, premiums are capped at 8.5% of income for those above 400% FPL removing the “subsidy cliff.” 
  • What’s next: Additional guidance is expected from the Centers for Medicare & Medicaid Services (CMS) and Internal Revenue Service (IRS). State-based Marketplaces (SBMs) will also release information for their states.

2. People that receive unemployment in 2021 will be treated as earning no more than 133% FPL, unless otherwise eligible for Medicaid

  • What it does: For 2021, allows individuals receiving or approved to receive unemployment for at least one week to be eligible for fully subsidized ACA coverage at 133% FPL, if they are not eligible for Medicaid. In states that have not expanded Medicaid, people below 100% FPL will also be treated as making no more than 133% FPL for APTC subsidy eligibility. Individuals will need to attest to and provide documentation to prove eligibility. 
  • What’s next: Additional guidance likely forthcoming from CMS on eligibility including the attestation and documentation requirements. SBMs will also release information for their states.