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How subsidies are calculated under the American Rescue Plan

The newly passed American Rescue Plan is changing how many subsides families are getting towards their health insurance plan. This is good news for those that have a health insurance plan on the Marketplace.

The way subsidies are calculated won't change, but the specific formula used is getting more generous. The formula is based on how far above the Federal Poverty Line you fall. They also take into account your zip code and household size.

The simple way to know how much subsidy you are entitled to is to call a local agent at Utah Avenue Insurance. We can help you know which types of incomes to include on your adjusted gross income and who to include in your household. Our help is free and we're happy to help you in-person or over the phone. Call, text, drop by or schedule an appointment.

For those that want to know the specifics, this is how it currently works:

-If your taxable household earn between 100% and 400% above the Federal Poverty Line, or FPL, there's a specific amount you pay towards your premiums for the second-cheapest, or "benchmark" silver plan offered on the Marketplace.

-Any dollar amount above that percentage is given to you as a subsidy.

-You can use that subsidy for any plan you wish on the Marketplace.

-The specific percentage you are required to pay changes based on your FPL level.

The new bill sets the percentage of household income a person will pay for coverage at a lower rate that the existing rules, which means the leftover amount will be a lot bigger for some people.

To put it in mathematical terms: Second-cheapest silver premium minus relevant percentage of household income equals subsidy.

It will take some time for these changes to be implemented. For now, we do not know when that will take place. We do know that this new amount will backdate to January 1, 2021. So for the first three or four months you may get a credit or refund for those premiums you've already paid. We will post updates as we learn more about this bill and how these changes will be implemented.

The local agents at Utah Avenue Insurance are training and researching daily. We want to ensure that you are getting the best plan available and all the subsidies you are entitled too.

Please feel free to call, text, drop by, email or message us through chat with any questions you may have. Our help and service to you is always free.

About Utah Avenue Insurance

Utah Avenue Insurance is your local health insurance experts. Our agents are here to help you with all your health insurance questions. Utah Avenue can help you with marketplace (aka Obamacare) plans, private health insurance and Medicare. If you have questions about how your medical insurance plans work or need help enrolling in a plan, we can help you. As always, our service is free to you.

801-609-8699 Call/Text
332 S 100 W, Payson, UT 84651
699 S Main Street, Springville, UT 84663

Give Utah Avenue a call or make an appointment with Utah Avenue Insurance and we'll be happy to help!

332 S 100 W, Payson

699 S Main Street, Springville

Call/Text: 801-609-8699


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