FREQUENTLY ASKED QUESTIONS

Please enter your question below:

Q: How does the American Rescue Plan impact healthcare insurance?

A: The American Rescue Plan (ARP), which was signed into law on March 11, 2021, temporarily makes health insurance coverage more affordable for more people. It:

  • Reduces the percentage of household income that you contribute to your monthly Marketplace benchmark plan premium in 2021 and 2022, regardless of income level.
    • If your household income is between 100-150 percent of the Federal Poverty Level (FPL), you may be able to get a plan with no premium costs.  
    • Many people will be able to find a plan for $10 or less after advanced premium tax credits (APTC) are applied.  
    • Some people will be able to find a Silver plan for $10 or less after APTC.  Applicability for PTC increase: 2021 and 2022 plan year
  • Provides tax reconciliation forgiveness for the 2020 tax year.   
  • Subsidizes COBRA premiums in 2021.
  • Expands Medicaid and Children’s Health Insurance Programs (CHIP) to include coverage for women up to 1-year postpartum.

Q: When do American Rescue Plan changes take effect?

A: These changes took effect on April 1, 2021. 

  • If you are submitting a new Marketplace application or are re-submitting an existing application, your eligibility results show the advanced premium tax credit (APTC) you qualify for beginning the first day of the month your insurance coverage begins. 
  • The new APTC amount will be applied to your coverage starting May 1, if you update your application and enroll by April 30.  
  • The Marketplace will not be providing retroactive APTCs for months prior to May 2021, but you will get the credits when you file your federal income tax returns.

Q: I have a Marketplace plan. How do I lower my premium?

A: If you already have a Marketplace plan, you can update your application and enrollment to get new eligibility results. Here’s what you need to do:

  1. Log in to HealthCare.gov. 
  2. Select your name in the top right of the screen, and select My Applications and Coverage.
  3. Under Your existing applications, select your 2021 application. 
  4. On the left navigation menu, select Report a life change. 
  5. Scroll down and select Report a life change.
  6. Select Report a change in my household’s income, size, address, or other information, and select CONTINUE.
  7. Continue through the application and review and update any necessary information. 
  8. Sign and submit the application to complete the update and view the new results. 
  9. Select View eligibility notice to open the updated eligibility determination notice and review the information. 
  10. Select Continue to enrollment to enter the plan selection/update area. 
  11. You can either re-select the plan you have now or choose a new plan. 
    • If you change plans, your deductible and out-of-pocket maximum may be reset to $0. That means the amount you already paid toward meeting that plan’s deductible and out-of-pocket maximum may not count toward your new plan. You would owe the full amount of the new plan’s deductible and out-of-pocket maximum.
  12. Go through all steps in the plan comparison and selection process to ensure your update is confirmed. 
  13. Sign the application to confirm your updated APTC amount.

If you need help, email American Exchange at enroll@americanexchange.com or call 1.888.995.1674.

Q: I do not have a Marketplace plan. When should I sign up?

A: You should sign up as soon as possible so you get insurance coverage. Your coverage begins on the first day of the month after you apply.

Applied for Marketplace CoverageDate Your Coverage Starts
April 1-30May 1, 2021
May 1-31June 1, 2021
June 1-30July 1, 2021
July 1-31August 1, 2021
August 1-15September 1, 2021

Q: What happens if I don’t update my information?

A: If you have an existing Marketplace plan and choose not to resubmit your application, you will receive the premium tax credit amount you’re eligible for when you file and reconcile your 2021 federal income taxes in 2022. 

If you don’t update your information, you could miss out on other savings. You may be able to choose a plan with lower out-of-pocket costs for the same price or less than what you’re currently paying.

Q: My income is more than 400% of the Federal Poverty Level (FPL). Do I qualify for savings?

A: Yes. Premium tax credits (PTCs) are available to consumers with household incomes above 400 percent FPL for 2021 and 2022 plan years. The American Rescue Plan also caps the household income your family will pay toward the premium for a benchmark plan at 8.5 percent. 

Q: Do I have to reconcile my 2020 taxes?

A: The IRS announced that, for the tax year 2020, taxpayers with excess Advanced Premium Tax Credit (APTC) for 2020 are not required to file Form 8962, Premium Tax Credit (PTC), to reconcile their APTC with the amount of PTC they may claim for 2020. They should not report an excess advance Premium Tax Credit repayment on 2020 Form 1040 or Form 1040-SR, Schedule 2, Line 2, or file Form 8962. Eligible taxpayers claiming a net Premium Tax Credit (net PTC) must file Form 8962 when they file their 2020 tax return. If the PTC computed on your return is more than the APTC paid on your behalf during the year, the difference is a net PTC. See Form 8962, and its instructions for more information.

Q: I already filed my 2020 taxes. Should I refile them? 

A: No. If you have already submitted your 2020 taxes, the IRS instructs you not to file an amended return until it releases guidance. Find more information about this at: IRS.gov/newsroom/irs-statementamerican-rescue-plan-act-of-2021.

Q: I have a COBRA plan. Can I sign up for a Marketplace plan?

A: Individuals who have COBRA coverage because of their own or a family member’s reduction in hours or involuntary termination from employment may be eligible for full premium subsidies that cover the entire cost of COBRA. This premium subsidy is available from April 1 until September 30, 2021.

If you are eligible for the extended COBRA election period, you will receive notice no later than May 31, 2021. The notice will provide additional details about premium assistance and how to request it. You will have 60 days after you receive the notice to elect COBRA. 

Once you enroll in an extended coverage COBRA plan, you must notify your plan immediately if you become eligible for coverage under another group health plan (not including excepted benefits, a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA), or a Flexible Spending Arrangement (FSA) or Medicare). Failure to notify the Marketplace could result in a tax penalty.

Q: I declined COBRA coverage. Can I enroll in a Marketplace plan?

A: If you were offered COBRA but declined coverage, or elected COBRA and later discontinued it, you may have another opportunity to elect COBRA coverage and get the full premium subsidy. You must still be within the period of time that you could have had COBRA coverage (generally 18 months from the employee’s reduction in hours or involuntary termination). 

This extended election period does not extend the period of COBRA continuation coverage beyond the original maximum period. COBRA coverage elected in this extended election period begins with the first period of coverage beginning on or after April 1, 2021.

Q: How do I know when my COBRA extended election coverage ends?

A: If you enrolled in a plan during the COBRA continuation coverage period, the plan must provide you with a Notice of Expiration of Period of Premium Assistance 15-45 days before your premium assistance is ending (whether due to the expiration of the COBRA continuation coverage or the expiration of the period of premium assistance). The notice will explain that your premium assistance is ending, the date it will end, and provide available coverage options.  

Note: You will not receive this notice if your premium assistance is ending because you become eligible for another group health plan (not including excepted benefits, a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA), a Flexible Spending Arrangement (FSA), or Medicare.

Q: I elected COBRA continuation coverage. Can I switch to a Marketplace plan?

A: If you elect COBRA continuation coverage, you can switch to a Marketplace plan during a Marketplace open enrollment period. You may end your COBRA continuation coverage early and switch to a Marketplace plan if you have another special enrollment period qualifying event, like getting married or having a baby.

Q: Should I file an Amended Tax Return in 2020 if I Received Excess Tax Credits?

A: The IRS does not want you to file an amended tax return if you or a family member received excess advance payments of the Premium Tax Credit (APTC) in 2020. Here’s what you should do based on how you filed your 2020 taxes:

Q: If you have excess APTC, sent in Form 8962, and your taxes are still being processed

A: You don’t need to contact the IRS. The IRS will reduce the excess APTC repayment amount reported on Form 1040 or Form 1040-SR and Form 8962 to zero before processing your return. If you already got or get a letter from the IRS about excess APTC for the tax year 2020, you don’t need to do anything. Keep the letter with your tax records. 

Q: If you have excess APTC and did not send Form 8962 with your return

A: You don’t need to send Form 8962 or contact the IRS, even if you got or get a letter asking for the missing form. If you reported an excess APTC repayment amount on your return, the IRS will reduce that amount to zero and process your return. You don’t need to contact the IRS.

Q: If you paid an excess APTC repayment amount when you filed your return and included Form 8962

A: You do not need to file an amended tax return to get a refund. The IRS is working out the details of how you will be repaid and will let you know soon. Do not contact the IRS. 

Q: If you claimed net PTC and filed your return without Form 8962 

A: The IRS needs more information to process your return. You got or soon will get a letter from the IRS asking you to send a completed Form 8962. You must do what the letter tells you to do. 

Q: If you have not filed your 2020 taxes

A: The filing deadline for 2020 taxes was May 17, 2021. If you did not file your taxes yet, here is what you should do:

Q: You did not file your taxes and you have APTC for 2020

A: File your taxes right away, but do not include Form 8962. Do not include the excess APTC amount on Form 1040 or Form 1040-SR. Schedule 2, Line 2. The IRS will process your tax return without adding any excess APTC repayment amount to your 2020 tax liability. 

Q: You did not file your taxes and you will claim net PTC on Form 1040 or 1040-SR, Schedule 3, Line 8 

A: Files your taxes right away. You must file Form 8962 with your return and report net PTC on Line 26. 

You are only allowed a PTC if you enrolled yourself, your spouse, or a dependent in a marketplace-qualified health plan. You are eligible to claim net PTC for 2020 if one of the following applies:

  • You were allowed a PTC for 2020 but were not eligible for, or chose not to get, APTC when you enrolled in Marketplace coverage for 2020
  • You received the benefit of APTC for 2020 but the PTC you are allowed was more than the APTC paid on your behalf in 2020.

Q: What is a binder payment?

A: A binder payment is the first payment you make to an insurance company to purchase your enrolled health plan. The binder payment covers the cost of your first month’s premium. 

The binder payment is due 30 days after you enroll in the plan. The insurance company you bought your plan from will send you a bill with the due date. Make sure to submit your payment by the date on the bill.

Q: What is a premium payment?

A: A premium payment is an amount you pay each month to stay enrolled in your health plan. The premium is usually due on the first of each month. Your health plan will send you a bill each month. Make sure you pay the premium by the due date each month to keep your health insurance.

Q: How do binder and premium payments work?

A: Here is an example of how do binder and premium payments work:

  • Mary enrolled in a health plan on November 15  
    • Mary’s coverage starts on January 1
  • Mary’s binder payment is $100.00
    • Mary must pay the insurance company $100 by December 14 to be enrolled in the plan 
  • Mary’s monthly premium is $100
    • To stay enrolled in the plan, Mary must pay $100 to the insurance company by the first day of each month beginning February 1

Q: What if I don’t pay my binder payment?

A: If you do not pay the full amount you owe no later than 30 days after you enrolled in a plan, the insurance company will cancel your policy.

For example:

  • Carlos enrolled in a health plan December 1
    • Carlos’ coverage started on January 1
  • Carlos’ binder payment of $50 was due to the insurance company on January 1, but he never paid it
    • Carlos’ plan was terminated by the insurance company on January 30. He had no health insurance coverage at all, and will have to pay for any healthcare services she received in January

Q: What are Premium payment grace periods?

A: There is a grace period for premium payments, but the timeframe is shorter for people who don’t get tax credits.

Q: Why are there some enrollees that do not get tax credits?

A: If you do not accept or are not eligible for Advance Premium Tax Credits (APTCs), the grace period is 31 days after your premium is due. The marketplace and your insurance company will send you notices about the amount you owe and provide the due date payment must be received for you to be enrolled in the health plan. 

For example…

  • The premium grace period for Anthony, who is not eligible for tax credits…
  • Anthony enrolled in a health plan December 1 and paid the $100 binder payment before it was due 
  • Anthony’s health coverage started on January 1
  • Anthony paid his $100 monthly premium to the insurance company for February and March
  • Anthony did not pay the $100 premium payment to the insurance company on April 1 
  • Anthony had a 31 day grace period – until May 2 – to pay the premium payment before his plan was terminated for nonpayment
  • Anthony paid the $100 premium for April on April 26
    • Anthony still had insurance coverage during the month of April and will continue to be covered as long as he pays his $100 premium each month

Q: Why do some enrollees get tax credits

A: If you get tax credits, your grace period is 90 days after your monthly premium is due. When you make a payment, you must pay the full premium amount due to keep coverage. The marketplace and your insurance company will send you notices about the amount you owe and provide the due date payment must be received for you to be enrolled in the health plan.

For example:

  • The premium grace period for Mika, who is eligible for tax credits
  • Mika enrolled in a health plan December 1 and paid the $100 binder payment before it was due 
  • Mika’s coverage started on January 1
  • Mika paid the $100 monthly premium to the insurance company for February and March
  • Mika did not pay the $100 premium payment to the insurance company for April or May  
  • Mika had a 31 day grace period from May 1- until July 3 – to pay the premium payments for April, May, and June before the plan was terminated for nonpayment
  • Mika paid the $100 premium for April, May, and June (a total of $300) on June 30
  • Mika was still enrolled in the health plan

Q: What happens to my health coverage during grace periods?

A: If you do not pay your binder or premium payments, you are not covered until you make full payment for all that you owe. Your coverage will be suspended, meaning that if you go to a doctor, the insurance company will not cover the cost of the care you receive until you pay what you owe to the health plan. 

Many providers will not treat you for non-emergency care when your insurance is suspended.  Once you pay the full amount you owe on the health plan, you will be covered for care received during the grace period. The provider will have to resubmit the claim to receive payment. 

If you do not pay the binder or premium payments and your plan is canceled, you will have to pay for the treatment you received out of your own pocket. If payment is an issue, you will have to work a payment plan out with your healthcare provider.

The American Exchange enrollment team is always available to answer any questions you have about your marketplace health coverage. Call 888.995.1617 or email info@americanexchange.com