What You Need to Know
- One section provides unemployed workers COBRA continuation benefits at no cost.
- Another provision caps what high-income people pay for individual coverage at 8.5% of income.
- In the past, some temporary federal health finance provisions have stayed in place for years.
The Senate has approved a $1.9 trillion COVID-19 response and budget package that could lead to a big, temporary increase in federal subsidies for commercial health coverage. The vote was 50-49.
The heart of the bill, H.R. 1319, the American Rescue Plan Act of 2021, consists of the funding needed to extend enhanced unemployment insurance benefits and to send cash payments of up to $1,400, but it also contains other provisions would help the unemployed pay for health care coverage.
Democrats in the House, which passed an earlier version of the bill, are trying to pass the final package and get it to the desk of President Joe Biden for his signature by March 14, when the current supplemental unemployment insurance benefits legislation expires. Biden has expressed strong support for the package.
The Health Insurance Provisions
In addition to the unemployment insurance and cash stimulus payment provisions, H.R. 1319 includes a provision, in Title IX, Subtitle F, that would help workers who lose employer coverage keep their group health coverage in place through Sept. 30.
The provision would provide tax credit that employers could use to pay to keep coverage for departing workers in place, through the COBRA group health benefits coverage continuation program, without the workers having to pay anything out of pocket for the coverage.
Currently, employers can ask departing employees to pay up to 102% of the full cost of group coverage to keep coverage in place. For many employees, the ordinary cost of keeping coverage in place through COBRA is more than $1,500 per month.
Another provision, Title IX, Subtitle A, Part 7, would lead to a temporary, dramatic expansion in the subsidies that people can use to pay for health coverage purchased through the Affordable Care Act public exchange system.