The stimulus plan additionally presents medical health insurance advantages

When President Biden signed the US bailout bill in March, the main focus was on stimulus payments, and for good reason: $ 1,400 is no reason to sneeze, especially if several people in your household are entitled to a check. Depending on your circumstances, other $ 1.9 trillion provisions in the business cycle could be worth more than $ 1,400 – especially if you need health insurance.

Health insurance for early retirees. Working longer is one of the most effective ways to make your nest egg permanent in retirement (see The Benefits of Working Longer), but not everyone has this option. And if you leave your job before age 65, you will likely need to get health insurance that will cover you until you are eligible for Medicare. The Affordable Care Act guarantees that you can buy a policy on the ACA market even if you already have health problems. In the past, however, for many people in their sixties, the premiums were high, often in excess of $ 1,000 per month. Health experts say the high cost of ACA plans has led some elderly people to buy short term policies that are cheaper but often do not offer the protection and coverage guaranteed by ACA plans.

Now people who have turned down ACA plans or who pay high premiums to enroll for one will get some relief. The American bailout plan greatly expands the eligibility for ACA subsidies, lowers the premiums for individuals at all income levels, and eliminates them entirely for some households. If your estimated Modified Adjusted Gross Income for 2021 is between 100% and 150% of the federal poverty line ($ 17,420-26,130 for a two-person household), you can get upgraded silver-level plans for free, says Jon Andrews, general manager, individual marketplace, for Willis Towers Watson, a social benefits consultancy. (In general, bronze plans have the lowest premiums and highest deductibles, platinum plans have the highest premiums and lowest deductibles, and silver or gold plans are somewhere in between.)

Those with incomes between 150% and 400% of federal poverty in 2021 will see a significant decrease in premiums, and households with incomes greater than 400% of the FPL – $ 69,680 for a two-person household – will qualify for the largest decrease in the cost because the amount they pay in premiums is capped at 8.5% of their MAGI.

For example, a 63-year-old married couple with a MAGI of $ 70,000 will each pay about $ 496 per month on a silver plan, which is about half what they would pay without the cap, Andrews says. “Almost every early retiree who takes out health insurance through public exchanges will see a drop in costs,” he says.

The Kaiser Family Foundation has a calculator that you can use to estimate the cost of a silver plan based on your estimated income.

To give individuals time to take advantage of the new subsidies, the Centers for Medicare and Medicaid Services have extended the registration deadline for ACA plans to August 15 through 2021.

You can apply for a new plan or update the plan you have at healthcare.gov. Unless Congress extends them, the subsidies will expire in 2022.

Unemployed. Fired workers don’t just lose their paychecks. Often times, they also lose their health insurance. The Consolidated Omnibus and Reconciliation Act (COBRA) requires that companies with at least 20 employees retiring employees must retain their cover for up to 18 months. However, they usually have to pay the full premium including the amount previously paid by the employer. That makes COBRA unaffordable for most of the unemployed.

However, as part of the US bailout, the government will subsidize 100% of COBRA premiums between April 1 and September 30 for employees who have lost their coverage because they were laid off or their hours were cut. The federal government reimburses the employers for the costs of the subsidies.

If you lost your job before the law went into effect and are still eligible for COBRA, you can sign up for subsidized coverage through September, says Debbie Harrison, director of regulatory and government affairs for the Business Group on Health, a not-for-profit that large companies represent employers. You can also qualify for the subsidy if you signed up for COBRA and then dropped it before your eligibility expired. However, the subsidy does not apply to expenses you incurred before April 1, and you are not entitled to the subsidy if you left your job voluntarily.

While the window of opportunity for receiving subsidized COBRA rewards is tight, just a few months of coverage for families of unemployed workers could make a big difference, said John Barkett, senior director of policy affairs at Willis Towers Watson. Without the subsidy, COBRA rewards can cost a family $ 2,000 per month or more, he says. If you continue to have COBRA coverage, you can keep your health care providers as well – an important consideration if someone in your family has a chronic illness.

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