Introduction to Tax Credits and Subsidies
which Help in paying your Health Insurance Premium


#COVID19 Bill

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.

As part of the new law, increased premium assistance is available through exchanges and removes the “cliff” that makes people ineligible for subsidies if their income exceeds 400% of the Federal Poverty Level (FPL) for 2021 and 2022. The American Rescue Plan Act includes:

  • Clients 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
  • Clients who are below 400% of the FPL can get additional government financial assistance to nearly 0% (the 8.5% cap still applies for household income)
  • 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 UnionCovered CA FAQ for Brokers *
  • 100% federal premium subsidy for COBRA coverage Blue Shield *

Here’s some sample scenarios from Modern Health Care

A hypothetical 45-year-old making $58,000 now gets no aid under the ACA. With the bill, they’d be entitled to a $1,250 tax credit, or 20% off their premiums, according to the Congressional Budget Office.

A 64-year-old making $19,300 already gets generous subsidies that reduce premiums to $800 a year. But with the bill, that person would pay no premiums for a standard plan.

The bill spends $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. That makes coverage more attractive for people who are considering whether to buy and more affordable for those who already have it, mainly low-to-moderate income working people.  See the button below to get a quote.

This bill 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.


The bill 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% 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). The bill, if passed, would temporarily remove that 400% cap.¹ 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%. Currently, a 63-year-old person with a MAGI of $65,000 in Indianapolis (zip code 46220) would pay $830.37 for the least expensive Bronze plan. Under the new plan, she would receive a subsidy of almost $590, dropping her portion of the premium to $240 per month.* ³
  • 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.

Other notable legislation is the Medicare for All Bill that is pending a Committee hearing in the Senate. This bill closely aligns with President Biden’s Health Care Plan. If passed, it will create a public option on the individual exchange for areas that face a shortage of insurers.⁵

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

IMHO the fastest and easiest way to figure out the tax credits, subsides, APTC Advance Premium Tax Credit, premiums and coverage would be to use our complementary

Calculators and Quote Engines

which we believe are easier to use, save your results and better than Covered CA’s for your subsidy and tax calculations to help pay your premiums.

Please do these calculations FIRST, before emailing us [email protected] or using our scheduler to set a meeting for your FREE initial consultation or ongoing service.  If you are already with Covered CA, we need you to appoint us as your agent (instructions) so that  Covered CA will pay us to help you.     When you have the calculation and coverage summaries in front of you, it’s so much easier to understand and for us to explain how the  Affordable Care Act can help you and your family.

Please note that the Advance Premium  Tax Credits (APTC) will all come out in the wash, when you file your taxes on form #8962 which attaches to  #1040.   That’s when you actually file what you earned during the taxable year, not an estimate.

Check out the new IRS  Publication # 5187  with  simpler  explanations or #974 with full details!  See the menu above for more information and FAQ’s.  

Do you think this process is complicated?  See what my CPA thinks.

For more information on the credit, see our premium tax credit page and our questions and answers.  IRS

The quote engine shows you TONS of plans and variations.  To narrow it down, click on the features and companies you are most interested in.  If you qualify for Enhanced Silver, we urge you to take it.  A 94% Silver is better than 90% Platinum!

FAQ’s are on virtually every page of our website.  That would be the best place to ask or view other website visitors questions.  Here’s some general introductory FAQ’s.

Covered CA Certified Agent

Covered CA Certified Agent  
No extra charge for complementary assistance 

Videos on how great agents are

Enrolling in health plans has helped people focus on their families and careers, and feel protected against unexpected medical issues.

I'm in Charles VIDEO

I'm in Charles

I'm in Sonia VIDEO

I'm in Sonia


IRS #Pub974 

Premium Tax Credit
IRS Publication 974

VIDEO What is APTC Advance Premium Tax Credit


aptc interactive assistant

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



ACA What You Need To Know  #5187 ACA What you need to know # 5187

Health Net VIDEO
How to get subsidies – pay less for coverage 

Kaiser Foundation reports that 27% of uninsured individuals are eligible to purchase a bronze plan with $0 premiums after subsidies in 2019.  Silver plans with cost-sharing reductions (CSR) for single individuals with incomes below 200% of the poverty level can be purchased for roughly $20 to $130 per month after subsidies, depending on an enrollees’ income. KFF *

Resources and Tax Forms

IRS.Gov  FAQ’s on Premium Tax Credit

♦   Publication 5120 Get it now or later

♦   Pub 2121 Facts about Premium Tax Credit

♦  Pub 5152 Report Income Changes as they happen

♦   Consumer Union Explanation for filing Taxes

8 comments on “Tax Credits & Subsidies Introduction

  1. 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?

  2. 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.


    • 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

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