United Hospital Fund Report Details How the American Rescue Plan Act Helps New Yorkers Maintain Affordable Health Coverage

Wednesday, August 4, 2021

United Hospital Fund Report Details How the American Rescue Plan Act Helps New Yorkers Maintain Affordable Health Coverage

NEW YORK, NY—August 04, 2021—The sweeping American Rescue Plan Act (ARPA), signed by President Biden on March 11, 2021, provides help affording health insurance to New Yorkers who lost their jobs or job-based health coverage during the COVID-19 pandemic, according to a HealthWatch brief released by United Hospital Fund (UHF) today. 

This report examines ARPA provisions that build on traditional safety net programs tied to unemployment in order to help consumers afford premiums on lost employer-based coverage (commonly known as COBRA), sharply reduce coverage costs for workers who received unemployment benefits in 2021, and protect taxpayers who underestimated their 2020 income from having to repay premium tax credits.

Although the economy is improving as infections decline and COVID-19 restrictions are relaxed, many New Yorkers are still in need. More than 18,000 New Yorkers filed new unemployment insurance claims during the week ending June 5, 2021, and about 1.4 million were receiving unemployment benefits as of May 22, 2021. 

“ARPA support for families who lost job-based health insurance adds to the deeper subsidies and expanded eligibility for financial help under the expanded Affordable Care Act,” said Peter Newell, director of UHF’s Health Insurance Project and author of the report. “These provisions will help New Yorkers dealing with job losses maintain health coverage while times are still so trying.” 

According to one analysis, an additional 2.2 million Americans will enroll in COBRA for coverage in 2021 with the new financial assistance, extended tax credits will lower premiums for an additional 1.4 million, and the waiver of tax credit repayment provisions will save U.S. consumers $6.3 billion. 

The report explores three ARPA provisions as they apply to New Yorkers:

1.    Subsidies for COBRA Continuation Coverage
The decades-old COBRA law allows workers to continue employer-sponsored coverage at their own expense for up to 18 months or longer after leaving a job, but the high premiums can be a big lift for many—in 2019, annual COBRA premiums in New York averaged close to $8,000 for single coverage and almost $23,000 for a family plan. The ARPA solves the affordability problem by setting COBRA premiums at $0 for eligible workers and dependents through September 30, 2021. 

2.    Reducing Health Costs for Families Receiving Unemployment Compensation 
The ARPA provides an almost-free coverage option on the New York State of Health marketplace for families and individuals who receive unemployment insurance in 2021. This temporarily expands the number of New Yorkers eligible for the maximum premium tax credit amounts for coverage through the marketplace. Some consumers who were already enrolled in coverage may be entitled to a retroactive credit for months as far back as January 2021, and the provisions apply to coverage through the end of 2021.

3.    Tax Credit Repayments Waived for 2020 
Premium tax subsidies through the marketplace are based on estimates made by consumers of their incomes, which are then reconciled at the end of the tax year. With all the economic turmoil during the pandemic, those estimates were difficult for families to make. The ARPA waives the requirement that consumers pay back any “excess” premium tax credits they received for tax year 2020.

In addition to explaining these provisions, the HealthWatch brief gives contact information for consumers who want to learn more about their eligibility for financial help, or who have questions or complaints about COBRA continuation coverage and special premium assistance.

The report, Extra Coverage Help Under the American Rescue Plan for New Yorkers Who Lost Jobs and Job-Based Insurance, was made possible with support from The New York Community Trust. It can be downloaded from UHF’s website here

This brief is a companion to the HealthWatch brief  A Shot in the Arm: American Rescue Plan Act Boosts Health Coverage Affordability, released July 13. 

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