As you probably know, President Biden signed an executive order shortly after being sworn into office creating a three-month special enrollment period in the individual market due to the COVID health emergency so that people who do not have health insurance would have the opportunity to sign up. The SEP began February 15 and was scheduled to end May 15.
Now, that May 15 end date has been pushed back to August 15, and the three-month SEP is now a six-month special enrollment period. On March 23, the 11-year anniversary of the Affordable Care Act, President Biden announced that CMS, the Centers for Medicare & Medicaid Services (CMS), will be extending the SEP by three months to give consumers more time to purchase coverage and take advantage of the additional premium tax credits included in the American Rescue Plan.
As a result of the American Rescue Plan, additional savings will be available for consumers through HealthCare.gov starting April 1. These savings will decrease premiums for many, on average, by $50 per person per month and $85 per policy per month. On average, one out of four enrollees on HeathCare.gov will be able to upgrade to a higher plan category that offers better out of pocket costs at the same or lower premium compared to what they’re paying today.
We’ll be providing additional information on the increased tax credits in an upcoming article, but there are two important changes you need to know about, as explained in the American Rescue Plan Fact Sheet:
- Families with household incomes between 300 and 400% of the federal poverty level (FPL) will not have to pay more than 8.5% of their income for the second-lowest-priced silver-level plan in the marketplace, which, of course, is the reference plan that determines the amount of the premium tax credit. Previously, these families were capped at 9.83% of their household income.
- Now, even people with household incomes above 400% of the FPL will be capped at 8.5% of their income for the benchmark plan. Previously, there were no tax credits for people who earn more than 400% of the FPL, so this is a huge development that should make it much easier to sell individual coverage to prospects who previously struggled with the high premiums.
For those who enroll in coverage during the special enrollment period, coverage will start the first of the next month. Additionally, those who are currently enrolled “will be able to change to any plan available to them in their area” according to the press release.
Again, we’ll be providing additional information on the enhanced premium tax credits soon, so please be on the lookout for that article. In the meantime, if you hadn’t planned to take advantage of this special enrollment period to sell individual policies, it might be time to re-think that. The extended SEP coupled with the increased premium tax credits is a great opportunity to grow your individual block of business.