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GoGetCovered: Insurance for Businesses and Individuals

American Rescue Plan Act – Individual Market Changes

The American Rescue Plan Act of 2021 (ARPA), signed into law by President Biden on March 11, 2021, makes health care coverage more accessible and more affordable to individuals and their families. Increased savings and lower premiums due to additional financial assistance will be available to current enrollees and eligible consumers who enroll in health care coverage certified by Connect for Health Colorado. The Exchanges may begin displaying the lower premiums as early as April.

The ARPA increases eligibility guidelines and eliminates the income eligibility ceiling for premium tax credits for 2021 and 2022. This means more Americans now qualify for financial help with Individual health care coverage purchased through Connect for Health Colorado.

The Centers for Medicare & Medicaid Services (CMS) projects that premiums for individuals enrolled in coverage through the Individual Marketplace will drop by $50 per person per month or $85 per policy per month. CMS also projects that four out of five enrollees will be able to find a plan for $10 or less per month after premium tax credits, and more than half of enrollees will be able to find a Silver plan for $10 or less. The U.S. Department of Health and Human Services (HHS) has created a fact sheet with more details.

Stimulus Bill for COBRA Subsidy

On March 11, 2021, President Joe Biden signed into law the American Rescue Plan Act of 2021 (ARPA). The legislation goes into effect April 1, 2021, and contains provisions for a COBRA subsidy and an increase to the annual dependent care FSA contribution limit for 2021.

COBRA Premium Subsidy

The ARPA includes a 100% COBRA premium subsidy for eligible individuals and their family members. Details about the subsidy and criteria are included below.

  • The subsidy will cover 100% of the COBRA premiums for employees and family members who are losing group health coverage as a result of an involuntary termination of employment or reduction in work hours.
  • The subsidy will begin on April 1, 2021, and end on September 30, 2021.
  • Any eligible individual who is enrolled in COBRA or will enroll in COBRA on or after April 1, 2021, and before September 30, 2021, will have the subsidy available to them.
  • The subsidy is not available for individuals who voluntarily end employment or become eligible for group health plan coverage elsewhere.
  • Employers will receive a credit for the COBRA subsidy through a payroll tax credit against their quarterly taxes.

Dependent Care FSA Limit Increase

The legislation also includes a voluntary one-year increase to the annual dependent care FSA contribution limit. Employers who want to offer the limit increase to their employees must amend their plan documents.

  • For calendar year 2021, the dependent care FSA limit is increased to $10,500 or $5,250 for married individuals filing separately.
  • ARPA automatically sunsets this increase at the end of the 2021 calendar year. As with any legislative change, we are here to help our clients navigate these changes and reduce any administrative burdens.

No Surprises Act

On Dec. 27, 2020, Congress passed, and President Trump signed, the No Surprises Act as part of the Appropriations bill. The No Surprises Act, which is a law not guidance, goes into effect for plan or policy years beginning on or after Jan. 1, 2022.

The surprise billing legislation establishes federal standards to protect patients from balance billing for defined items and services provided by specified doctors, hospitals and air ambulance carriers on an out-of-network basis. The federal law applies to individual, small group, and large group fully insured markets and self-insured group plans including grandfathered plans. The legislation caps patient cost-sharing for out-of-network items and services at in-network levels and requires providers to work with insurers and health plans to negotiate remaining bills. If the insurer/health plan and the provider are unable to reach agreement, an Independent Dispute Resolution (IDR) process, sometimes called arbitration, was established to determine the reimbursement amount.

There are federal rules and processes yet to be developed, and questions about scope and applicability as it relates to state laws still to be answered. We will continue to update our customers as more is known.

Out-of-pocket maximum for group health plans announced for 2022

January 29, 2021
All states
The proposed 2022 out-of-pocket maximum (OOPM) for group health plans is outlined below:

 Maximum OOPM for 2022 plan year  Maximum OOPM for 2021 plan year
 Self-only: $9,100  Self-only: $8,550
 Family: $18,200  Family: $17,100

The OOPM is adjusted annually by the U.S. Department of Health and Human Services (HHS) and was released in the annual Notice of Benefit and Payment Parameters on Dec. 4, 2020. This represents about a 6.4% increase above the 2021 parameters of $8,550 for self-only coverage and $17,100 for other coverage.

The annual OOPM requirement applies to most non-grandfathered group health plans, regardless of whether the plan is fully insured or self-funded (ASO). It does not apply to grandfathered, transitional relief, and retiree-only plans. The OOPM includes copayments, deductibles, and coinsurance amounts associated with both medical and pharmacy covered benefits.

High-deductible plans with health savings accounts (HSAs) have different limits, including OOPM, deductible, and contribution limits. We are still awaiting Internal Revenue Service (IRS) final rules for 2022 HSA limits, historically released in May, and will communicate additional information once available.

2021 Updates on Cost Sharing

These limits apply to in-network out-of-pocket costs for most health plans:

Cost-sharing limits overview

The Affordable Care Act (ACA) requires limits for consumer spending on in-network essential health benefits (EHBs) covered under most health plans. These are known as out-of-pocket (OOP) maximum limits.

OOP maximums include deductibles, copays, and coinsurance costs paid by consumers. They do not include health plan premiums or out-of-network costs.

OOP limits apply to most health plans. Specifically, they apply to all non-grandfathered individual and group plans, regardless of size or whether the plan is insured or self-funded.

Annual OOP maximum limits

The in-network OOP maximums are adjusted annually. Current amounts are:

comparison chart: 2020-2021 OOP Maximums

Embedded individual OOP maximum in family plans

Effective Jan. 1, 2016, most health plans cannot allow any individual, including those with family coverage, to spend more than the individual OOP maximum established under the ACA. This is commonly referred to as an “embedded” individual OOP maximum.

Additional rules for Health Savings Account (HSA) plans

In addition to the ACA cost-sharing limits, HSA-compatible high-deductible health plans (HDHPs) must follow additional Internal Revenue Service (IRS) rules. These rules require plans to have minimum deductible amounts and maximum OOP limits that differ from the ACA OOP limits.

This chart combines the 2021 ACA and IRS rules for HSA-compatible HDHPs:

2021 ACA and IRS rules for HSA-compatible HDHPs

* There is not a stated IRS minimum deductible for individuals with family coverage. However, if a family plan has a separate individual deductible amount for individual family members, that amount must be at least as high as the ACA minimum family deductible.