Newsletter

Volume 4, Number 36

IMPROVED ACA SUBSIDIES EXTENDED T O 2025

The Inflation Reduction Act signed into law on August 16 has extended the improved subsidies that were provided in 2021 and 2022 through 2025. (Otherwise, these improved subsidies would have ended as of December 31, 2022.)

Not only were subsidies for those with household incomes between 100% (non-Medicaid expansion states like Florida) or 138% (Medicaid expansion states) and 400% of the Federal Poverty Level (FPL) improved starting in 2021, but households earning above 400% of the FPL became eligible for subsidies starting in 2021 if the cost of the second lowest-priced silver plan in their zip code was more than 8.5% of their household income.

Note: calculations are expressed as percentages of the Federal Poverty Level (FPL), but the FPL changes each year. One FPL chart is used for the 48 contiguous states, and Alaska and Hawaii each have their own FPL charts.

The following chart compares how the % income calculations were made before 2021 and how the income calculations will be made through 2025 (starting in 2021). The middle column (labelled “current” income) shows how subsidies were calculated through 2020; the last column (“new income %”) shows how subsidies will be calculated through 2025.

Note that subsidy eligibility begins at 100% of the FPL in Florida and that those earning above 400% of the FPL are eligible for subsidies if the cost of the second lowest cost silver plan in their zip code exceeds 8.5% of their household income:

FEDERAL POVERTY LEVEL (FPL) CHARTS FOR 2023 ACA PLANS

The Federal Poverty Level (FPL) calculations used for determining ACA subsidies in 2023 will increase from $12,880 to $13,590 for a single individual (100% FPL level).

This FPL chart will be used for determining tax subsidies and Cost Sharing Reductions for 2023 plans

Those with MAGI above 400% may qualify for tax subsidies if the cost of the benchmark silver plan in their zip code exceeds 8.5% of their income

 ACA ENROLLMENT ON HEALTHCARE.GOV

Open enrollment for states (like Florida) that participate on healthcare.gov will begin November 1 and run through January 15. Those who enroll on or before December 15 will have plan effective dates of January 1, 2023. Those who enroll between December 16 and January 15 will have a plan effective date of February 1, 2023.

Those who don’t enroll within the period November 1 through January 15 will be permitted to enroll in an Affordable Care Act plan ONLY if they have a “qualifying life event” and thereby qualify for a special election period (e.g., leaving group employment, marriage, moving between service areas, divorce, and losing Medicaid eligibility). 

Most special election periods run for 60 days, and in many cases applicants must provide proof of having prior coverage. Coverage will begin the first of the month after the individual makes application, but individuals will be enrolled retroactively in some situations (e.g., birth of a child). When a person makes application for a special election period on healthcare.gov or with an agent who uses a web brokerage system, an “enrollment verification notice” will be produced by the system. This notice will indicate the applicant’s projected household income; amount, if any, of any tax subsidy; whether or not the individual is eligible for a cost sharing reduction; whether or not the individual is eligible for a special election period; applicable effective dates; and whether the individual has to provide any verification (e.g., proof of income, immigration status and/or citizenship; and whether the individual has to provide proof of eligibility for the special election period).

(NOTE: “eligibility verification notices” are also produced during open enrollment. Individuals in states like Florida are eligible to enroll in an ACA plan if their household income is at least 100% of the FPL. Eligibility verification notices produced during open enrollment can require applicants to submit proof of income, immigration status, and/or citizenship.)

About Paul Cholak

Paul has over forty years of benefits experience and has been Director of Employee Benefits for large companies, as well as a benefits consultant with major consulting firms. He understands the health and life insurance needs of individuals and families of all ages. He also has considerable experience in selling health and life insurance to employer groups.

He guides you through the steps of getting health and/or life insurance and is available to help you both BEFORE and AFTER you've made your purchase decision.