This is our third American Rescue Plan ACT, ‘ARPA’ newsletter to our clients. This will be the most in-depth note we’ll send on ARPA. We’d appreciate your thorough review before contacting our office with questions, as most questions will be answered here.
This message will provide an overview of which types of clients will be affected by ARPA, possible responses, and which response we recommend for each type of health insurance client. Keep in mind that ARPA extends income limits which for which tax credits are available. The new rule is that a specified Silver plan will never cost more than 8.5% of your household income. As we mentioned before, tax credits will still generally not be available if you or your spouse qualify for coverage through an employer. This Obamacare rule hasn’t changed.
Note that ARPA came out of left-field for our industry. It’s equivalent to your CPA being given a weeks’ notice to complete a second tax return for all his clients this year. There aren’t enough hours in the day to get it done, but we will help all we can. Please understand that this is a busy time of year; we are training for the next open enrollment, etc. Rather than waiting for an appointment, you can call healthcare-gov anytime 24/7 to update or submit a new application. Just call (800) 318-2596. The call takes about 30-45 minutes. We have submitted most of your applications that qualify for tax credits through healthsherpa-com, and a few through healthcare-gov. HealthSherpa is a user-friendly system for most people. We’ll show you how to create a new application or update your existing application below.
Remember, new & updated applications must be submitted after April 1 (no fooling) in order to receive the ARPA-based tax credits.
First, we’ll offer a little Q&A regarding questions you’ve sent us in response to our prior messages and what you’ve seen in the news.
- The Special Enrollment Period starts April 1. It was slated to end on May 15 but was extended last week to August 15. During this time you can enter a new or revised application to receive a larger tax credit, change plans, or even change insurance companies. Many have asked a good question, which is ‘will I get credit for any deductible I’ve met on my current plan if I change to a new plan?‘ The answer we have received after polling companies is ‘yes’, as long as your plan stays with the same insurance company. If you change to a new insurance company, no credit will be given for your prior deductible. If you stay with the same plan but revise your application in order ot get the new, larger tax credit, your deductible will not be impacted.
- I’ve had a birthday since January 1. ‘Will a new application be based upon my new, older age’? We don’t know but expect it will be.
- ‘How are ‘household’ and ‘income’ defined’? Household means ‘the people named on your 2021 Federal tax return’. Income means ‘Modified Adjusted Gross Income’, which is usually the same as Adjusted Gross Income/AGI.
- Which Silver plan is the 8.5% of income based upon? We don’t yet know, but Kaiser knows. You can access their tax credit calculator here.
- ‘When will the revised tax credit take effect’? The new tax credit and/or plan changes take effect the following month. For those of you who are not receiving a credit now, note that you will only receive credits for the months following submission of a new, qualifying application.
Our clients fall into three groups. ARPA has different implications for each group, thus we have different recommended plans of action for each group.
Group 1) Those of you currently receiving tax credits. During the Special Enrollment Period, you can file an updated application. Should you? If you can afford your current premium and everything is working smoothly, we recommend you leave your application as-is. You will still receive any extra/higher tax credits for which you qualify in 2021 when you file your 2021 tax return.
Group 2) Those of you with coverage based on an application through healthsherpa-com or healthcare-gov without a request for a tax credit. If we submitted this sort of application for you, you will never receive a tax credit for 2021 unless a revised application is submitted. If you don’t know, send your agent an email. Usually, these applications are submitted when the client makes too much money to qualify for a credit, but the online application is still the most convenient way to apply. If that rings a bell, let us know. We don’t track which applications were submitted this way.
Group 3) Those of you who we helped apply with a direct application to PacificSource, Moda, Providence, etc. on their website or using their paper application. You will never receive a tax credit for 2021 unless a new application is submitted. Did you make just a little too much money to qualify? Here are the old income limits, and here is a calculator to see if you will qualify based on the new rules. The biggest winners of ARPA will be those of you who make 500-600% of the Federal Poverty Level. The old limit was 400%, and it was a cliff. In other words, a 60-year-old couple making $68,000 might get $20K in tax credits, but if they made $70,000 they’d get nothing. If this is you, we definitely recommend completing a new application. Regarding this group, we expect more of you will need our direct assistance since you’ve never seen the HealthSherpa process. Still, it isn’t all too hard to complete a new enrollment through HealthSherpa. You can click your agent’s link below to give it a try. If you are unable to complete an application, let us know. We can step in and fix it or finish it. Note, it is our understanding that a new policy from a different insurance company will start a new deductible. If you can’t reach us, you also can apply by calling healthcare-gov at (800) 318-2596. If you call in, kindly give the representative your agent number. This is shown below along with the HealthSherpa links.
These are your agent’s HealthSherpa links. You can click this link to submit a new application or update an old application. Before using this link to update an application, please note two things. First, updated applications through HealthSherpa will automatically replace or modify existing coverage, depending on whether you change to a new plan. Second, if your existing coverage was obtained outside HealthSherpa or Healthcare-gov, you will need to manually cancel the old plan after purchasing a new one.
If your prior application was completed through HealthSherpa and you know which email address was used in the application, just search through your old email for messages from HealthSherpa. Every person who applied through HealthSherpa received several messages from the system. One will say ‘resume your application’. You can use the ‘resume’ link to create your own HealthSherpa login.
Alternatively, you can click your agent link below to go to the agents’ HealthSherpa home page. In the upper-right corner, click ‘Sign in’.
If you don’t have a login saved, click ‘Forgot Your Password’ on the next page. If you no longer have access to the email address that was used in the past, let us know.
After you reset your password and sign in, you should see your dashboard. In the upper-right, click on the “Apply the new subsidy” button, as shown below. If you don’t have that button, click “report changes” instead.
If we have more info to pass along about self-enrolling or add more slides, you’ll be able to access that via our new webpage: https://tomlinhealth.com/arpa/. We probably will not send big emails like this again regarding ARPA. You can refer to the web page for any further updates.
To update your application, just start at the beginning by clicking ‘edit’ to the right of the ‘primary contact’ area. The system will walk you through the application, step by step. Even if you just click through and make no changes, your tax credit will be updated to the new, ARPA-based amount if you do this after April 1.