Advance Payments of the Premium Tax Credit APTC
Subsidies
The American Rescue Plan Act ARPA
2021 Federal Stimulus Package
March 2021
VIDEO Introduction to ARPA by Steve
The Coronavirus bill represents the biggest expansion of Federal Help – Subsidies, since ACA/Health Reform/Obamacare started in 2010!
Use our Quote Subsidy Calculator Engine, to see how ARPA works for you.
There are way more subsidies and there is no upper income limit chart (FPL) for 2021 and 2022.
ARPA Provides:
- Those enrolled in Covered California health plans will not have to pay more than 8.5% of their household income for the second lowest cost silver plan – Get Quotes
- If you are not in Covered CA, there is a special enrollment period to apply. If you stay with the same insurance company, your deductibles & co pays will transfer over!
- Any person in 2021 who received unemployment insurance for one week or more, and their total income qualifies for coverage through Covered California, will receive federal premium tax credit available for 138% of FPL Silver 94? for the duration of the Public Health Emergency in 2021.
- In California, individuals making between 138 percent and 150 percent of the federal poverty level — between $17,776 and $19,140 per year — will see their already-low premiums eliminated. San Diego Union * Covered CA FAQ for Brokers *
- 100% federal premium subsidy for COBRA coverage Blue Shield *
Get quotes to see how ARPA would work for you.
ARPA is funded to the tune of $34 Billion for only two years and would change the formulas for health insurance tax credits to make them more generous for most people, and also allow a wider number of individuals to qualify.
ARPA follows President Biden’s strategy of getting all Americans covered. Modern Health Care 3.8.2021 * NPR *
Covered CA will automatically check if clients get more subsidies. BUT! your consent to allow Covered CA to check your finances in the Federal Hub, etc. must be up to date. Here’s their quick guide on how to do that.
ARPA is comprehensive and there are several provisions that we are watching closely that would affect how people pay for their health insurance coverage:
- Removing the cap on subsidies for people earning more than 400% [600% in CA] of the Federal Poverty Level (FPL) –Currently those with a Modified Adjusted Gross Income (MAGI) of more than 400% of the FPL are not generally eligible for Advance Premium Tax Credits (APTC). Additionally, there is legislation that would make the removal of the 400% cap permanent.²
- Lower the maximum a person has to pay for the Benchmark Plan from 9.83% of MAGI to 8.5% of MAGI – This provision would drop the amount the insured person has to pay for insurance from 9.83% of his MAGI to 8.5%.
- Provide no-cost Silver Plans for people receiving unemployment insurance – Americans on unemployment insurance during 2021 would receive the Benchmark Silver Plan in their market for a $0 premium contribution while they are receiving unemployment insurance.⁴
- APRA COVID Stimulus bill will also pay your COBRA and Cal COBRA premium.
All ages will be affected, but this bill will have the greatest impact on near-seniors, or those aged 55-64 because of the cost of their ACA coverage. Stephens Mathews Email 3.11.2021 *
Resources & Links
- HR 1319 on Congress.Gov
- Congressional Budget Report – Premium Tax Credit
- 242 page pdf of HR 1319
- Insure Me Kevin.com
- Kaiser Foundation Analysis & Summary 3.15.2021
- Cal Matters.org
- Affordability
- HHS Fact Sheet
- Covered CA Website on ARPA
- CC March 18th 22 page slide show
- Federal Data Services Hub
- Covered CA FAQ’s for Brokers Rev 5.12.2021
- Target Strategies
- Covered CA Broker Briefing April
- Covered CA says subsidies are too big to ignore
- Blue Shield tools & explanation
- Sample – Messaging for on-exchange members with a subsidy
- Sample – Messaging for on-exchange members without a subsidy
- Sample – Messaging for switching to an identical plan on-exchange
- Blue Cross Power Point Presentation
- Word & Brown Insurance Wholesaler Summary
- Unemployment Compensation Enhancements Silver 94
- Extensive FAQ from Anthem Webinar
Introduction to Subsidies – Premium Tax Credit
To make this all “simple” just use our quote engine and/or watch our video on using the quote engine.
what is MAGI Income or does this or that count as income.
How do you get the premium tax credit?
Check out our quote engine, to get a preliminary indication of the amount of subsidies you’ll qualify for. There is no extra charge for our services,
In a lot of ways subsidies are hocus pocus smoke & mirrors as you have to file Form 8962, Premium Tax Credit, with your tax return at the end of the year. So, at the end of the year if you make too much $$$ you might have to give it back. If you make less, you get money back on your taxes.
Failing to file your tax return will prevent you from receiving advance credit payments in future years and can cause MAJOR PROBLEMS and coverage CANCELLATION!
The premium tax credit is refundable so taxpayers who have little or no income tax liability can still benefit. The credit also can be paid in advance to a taxpayer’s insurance company to help cover the cost of premiums. IRS Website on “The Basics“
Links & Resources
irs.gov/affordable-care-act-tax-provisions
VIDEO Introduction to Individual Plans for those coming from Employer Group Plans
Pros – Cons – Complicated FAQ’s Research on staying with under 65 plan? Covered CA? vs Medicare
Get FREE #Instant Individual & Family California Quotes - Including Tax Subsidy Calculation - Guaranteed Issue - No Pre-X Claus
Full Instructions to use Individual Quote Engine
Takes all the complexity out of CFR §1.36B-3 *
#Line8b now 11 Adjusted Gross income then add line 2a, 6a & 8 (Foreign Income)
to get Covered CA MAGI Income
1040 Form *** Schedule 1 Additional Income & Adjustments to Income
Federal Poverty Level &
Program Chart
Medi-Cal? Covered CA Subsidies? Enhanced Silver?
Steve Shorr VIDEO on subsidies
Health Care Reform
CMS VIDEO explains the advance premium tax credit and the different ways in which you can apply it to lower the cost of insurance for you and your family.
#Covered CA Certified Agent
No extra charge for complementary assistance
- Appoint us as your broker
- VIDEO on ARPA Stimulus and more Covered CA Subsidies
- Set Consultation Meeting via Phone, Skype or Zoom
- Get Instant Health Quotes, Subsidy Calculation & Enroll
Videos on how great agents are
CFR 136 B 3 – How is Tax Credit #Calculated
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Kaiser Foundation Subsidy Explanation
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Technical Links for Premium Tax Credits
CFR 155.305 HTML Eligibility Standards
§1.36b-0Table of contents
§1.36b-1 Premium tax credit definitions
http://www.law.cornell.edu/uscode/text/42/1396a
Technical Links
proposed regulations relating to minimum value of eligible sponsored plans
Notice 2013-41, whether or when individuals are considered eligible for coverage under certain Medicaid, Medicare, CHIP, TRICARE, student health or state high-risk pool programs MR. Mip.
final regulations on the reporting requirements for Marketplaces.
HR 3590 Section 1001 HR 4872
Code of Federal Regulations §1.36b-2Eligibility for premium tax credit.
#Report changes as they happen - within 30 days!
10 days for Medi Cal
Our webpage on ARPA & Unemployment Benefits - Silver 94
IRS Form 5152 - Report Changes
- Our VIDEO on how to report changes to Covered CA
- Lost your job? How to keep your Health Insurance. Shelter at Home VIDEO
- References & Links
- Here's instructions.
- Our opinion & short cut * 6 pages of questions - way too complicated, easy to mess it up, lose subsidies and/or go into Medi-Cal - Just give the bottom line in MAGI Household Income
- If you've appointed us - instructions - as your broker, no extra charge, we can do it for you.
- Voter Registration
- Task Guide Phone - Voter Registration
- Denial of benefits and possible criminal charges if you don't report changes in income!
- Visit our webpage on how to report changes
VIDEO What is APTC Advance Premium Tax Credit
- Interactive Tax Assistant (ITA)
- Am I eligible to claim the Premium Tax Credit?
- IRS FAQ on Premium Tax Credit
- Learn More About Your Health Insurance Tax Documents | Covered California VIDEO
Tax #Estimators
- turbo tax.com
- H & R Block
- E file.com
- Estimate the Subsidy for Health Insurance, benefits, premiums, etc.
- 8962 ONLINE Calculator
- Tax Form Calculator.com
- e tax.com
- Marriage Higher or Lower Taxes?
ACA What You Need To Know #5187 
Health Net VIDEO
How to get subsidies – pay less for coverage
Child & Related Pages
Income Chart – Line 37** Covered CA MAGI
- 1095 A, B & C & FTB 3895 Covered CA Statement of Subsidy & Proof of Coverage
- 8962 Premium Tax Credit APTC Form attaches to Form 1040
- Affordable Employer Health Coverage? Employee ONLY 9.86% Family Glitch
- Age 65 – Can you get Tax Credits Subsidies Covered CA?
- Native American – Indian – Chumash – Lakota – Aho
- Premium Subsidy to 600% FPL + Mandate Penalty?
- Subsidies Upheld – King v Burwell
https://www.irs.gov/newsroom/irs-offers-overview-of-tax-provisions-in-american-rescue-plan-retroactive-tax-benefits-help-many-people-now-preparing-2020-returns
give Medicare the power to negotiate for lower drug prices, add new benefits to Medicare
Adding dental, hearing and vision benefits to Medicare.
Making new investments in home and community-based services to “help seniors, persons with disabilities and home care workers,”
Extending a boost to ACA income-based subsidies that were included in the American Rescue Plan Act. The boosted subsidies are set to expire after the 2022 coverage year.
https://www.fiercehealthcare.com/payer/framework-for-3-5t-senate-package-seeks-to-close-medicaid-gap-add-new-medicare-benefits-and
7 comments on “Tax Loss – Negative MAGI Income – Medi Cal? Subsidies?”
I have a wife and 13 year old daughter. Our household income is under $40,000.00 BUT, thanks to a hefty loss carryforward, my MAGI is -$150,000.00.
Is there any way to get covered California, at least for my wife and daughter (I have Medicare)?
No problem getting health coverage, you just won’t get subsidies. Click here to get quotes and enroll online.
1 This year I am earning $20,000.00. I have Medicare Advantage. My wife and daughter currently have Medi-Cal.
2 I’ve just started receiving Social Security which will be $22,000.00 next year. If I continue earning $20,000.00 from working, our total income of $42,000.00 will knock my wife out of Medi-Cal, at least as I understand it.
3 My daughter, however, can continue with her Medi-Cal.
4 This is why I’m looking at insurance for my wife and not necessarily for my daughter.
5 If we have to pay $12,000 to $15,000 for health insurance, maybe I should stop working and leave my wife (and daughter) on Medi-Cal.
2 Here’s the income chart for Covered CA While $42k would put you in Silver 73, the chart goes by MAGI Modified Adjusted Gross income that is Line 37 Adjusted Gross Income of your tax return, plus Social Security (It might not count in full), Foreign Income and Exempt Interest.
Your tax loss would show on line 13 or 14, right? Thus as a negative number it would make your $42k below zero, right? Thus, since your income is below $34k for a family of four, that would put you in Medi-Cal and not subsidies.
I’m not a CPA or tax attorney. Please review the Government Documents cited, this website and our Medi-Cal website, Western Poverty Law and go over them with appropriate counsel.
4. If you put your mouse over the premium on my quote engine, it will show the premiums for each person.
5. There are some who say that Obamacare will die on it’s own. The Middle Class can barely afford their own premiums, let alone the subsidies and Medi-Cal.
Line 13 & 14 of Tax Return – A picture is worth a thousand words
Letters from Covered California / MediCal said that with our household sized our household earnings could be up $2,2014.08 per month for my wife to stay on Medi-Cal and $4,527.00 for my daughter to stay on Medi-Cal.
The renewal forms ask about our monthly earnings (wages) and income (I assume this includes Social Security) and nowhere mentions MAGI so it’s quite a surprise to me to find that our qualification is MAGI-based.
I need to thank you for letting me know this.
The forms MC 216 and information that I have on my Medi-Cal Redetermination Page – ask for tax deductions.
It’s a shame that Medi-Cal and Covered CA give out conflicting and confusing information and then demand that Agents facilitate enrollment without training or compensation.
https://www.coveredca.com/pdfs/Welcome-APTC-insert.pdf
8 comments on “Tax Credits & Subsidies Introduction”
I plan to retire in a year or two…
How long will the ARPA subsidies last?
How might I figure out what subsidies would be if ARPA goes away?
ARPA premium tax credits are for tax years 2021 & 2022 only. Section 9661 ARPA * Tax Payers Advocate *
Here’s a graph that shows the differences… Go to KFF.org to “play” with the graph.
Hello Steve
I am a stay at home mom and my husband works full-time. We have health insurance through his Employer.
We feel that our insurance premiums are ridiculously high and last year we only went to the doctor a total of six times.
We are thinking about switching to a high deductible plan and And enrolling in HSA Account.
My question to you is do we have to wait till the end of the year to enroll and switch plans or can we through the new special enrollment switch now. what should we do.
Stacey
Do you mean switch employer plans or drop the employer plan and get an Individual Plan?
I’m not aware of any open or special enrollment periods that would apply for Employer Plans in your situation. Here’s our webpage on Individual Special enrollment.
Here’s our webpage on when there might be special enrollment times for employer plans.
What percent of the premiums is your employer paying?
If you drop the employer plan to get an individual plan, it might disqualify the employer from providing coverage to everyone else, as there are minimum participation requirements.
There are also rules that you might not get any Covered CA subsidies if you are offered an Employer Plan – aka Family glitch.
You can get individual quotes here. The rules under ARPA are complex… If not for the Family Glitch, you might be able to switch now.
Here’s our page on HSA’s Health Savings Accounts.
Thank you for your swift reply. My Husband gets aprox 1400.00 a month taken out of his check each month. I guess I will check with the HR department of possibly un-enrollment of our current health plan through his employment. If this is at all possible we will check back with you, In picking the right plan for our needs.
Thanks again
Please use our quote engine first and double check on the Family Glitch. No point in bothering HR if you can’t get something better individually. Do NOT cancel group coverage, till we have double and triple check.
President Trump was not kidding when he said Insurance was very complicated, more than anyone knew, except Steve Shorr. https://www.cnn.com/2017/02/27/politics/trump-health-care-complicated
Trump care final rule to attempt to end Obama care
https://insuremekevin.com/trump-cms-new-rules-weaken-obamacare-health-plans/
IRS Video’s https://www.youtube.com/user/irsvideos