Employee Benefits
Unveiling the Key Differences between Level Funded and Self Funded Plans
Discover the differences between level-funded and self-funded employee health insurance plans.
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As you may be aware, the Biden administration previously created a special enrollment period (SEP) on HealthCare.gov in response to the COVID-19 pandemic. This SEP allows individuals to sign up for coverage (or change plans) without a typical qualifying event.
Previously, it was announced that the SEP would run from February 15, 2021 until May 15, 2021. However, a more recent announcement by the Department of Health and Human Services (HHS) indicates that the SEP will now run until August 15, 2021. If you reside in one of the 36 states which utilize HealthCare.gov, you will now have access to this SEP for three additional months. On the other hand, states which operate on their own Health Insurance Marketplace can optionally choose to offer a similar SEP.
This extended SEP comes in response to recent changes authorized under the American Rescue Plan Act of 2021 (ARPA). The ARPA creates numerous changes to the availability of subsidized coverage available on the Health Insurance Marketplaces, namely:
More individuals can qualify for advanced premium tax credits (APTCs). The ARPA temporarily removes the requirement that household earnings must be within 400% of the Federal Poverty Level (FPL) to qualify for an APTC.
The ARPA temporarily caps the amount that an individual or family will have to pay for the benchmark plan (i.e., the second-lowest cost silver plan) at 8.5% of their household income. This is down from 9.83%.
The ARPA temporarily gives an additional boost in APTCs to those with household earnings less than 400% of the FPL. According to the HHS announcement, these savings will decrease premiums by an average of $50 per person per month and $85 per policy per month.
The ARPA temporarily creates a new APTC for anyone who collects unemployment benefits for one or more weeks during the 2021 year. The benchmark plan will cost $0 for these individuals.
HealthCare.gov released a statement that they will be ready to begin processing the above-mentioned changes as of April 1, 2021 with the exception of the new APTC that applies to those who have or will collect unemployment benefits this year—APTC may not be available until July.
The full American Rescue Plan Act can be found here.
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