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You are here: Home / Anderson On Health Insurance / ARP and implementation

ARP and implementation

by | 38 Comments

This post is in: 

The American Rescue Plan will be signed into law tomorrow.  That is only the conclusion of the first phase of policy making — getting agreement among relevant stakeholders to change policy and allocate resources.  The second phase has already started behind the scenes and it will become increasingly important in the next several weeks.  Implementation of what Congress thinks it authorized and appropriated is the next, critical phase.

The ARP is a big law with many moving parts with very fast implementation challenges.

 

Jenny Hogue is an insurance broker and a fellow ACA nerd.  She is identifying a real need.  ARP will have the federal government pay 100% of COBRA premiums from April 1, 2021 to September 30, 2021.  This is what Congress has said it will do.

The first set of questions are who gets the money, how does the money arrive and when does it start flowing?  Does the money go direct to insurers?  Does the money go to individuals to reimburse payment?  Does the money go out this week or does it first go out in mid-April?  Is it direct deposited?  Is it a check?  The second set of questions is how does the money flow to people already on COBRA and paying full premium?  Is that a different pathway than people who are not on COBRA now but will be on COBRA in June?

There are a lot more questions to ask which need to be answered.

These are critical implementation questions on a single, specific component of a very big law.  Implementation will be critical on the political valence and salience of the law.  A well implemented law will have a different political value than a complete clusterfuck of an implementation.

Reader Interactions

38Comments

  3. 3.

    VeniceRiley

    This is one of the items that points out how they delay in confirmation of nominees to cabinet positions is harmful. Javier Becerra needs confirmation ASAP.

  5. 5.

    Benw

    @David Anderson: sometimes life comes at you fast!

    The IRS has to go back and recalculate everyone’s 2020 returns to implement some of the new credits, yeah? Just getting that right will be a huge and critical job

  7. 7.

    MisterForkbeard

    @Benw:

    sometimes life comes at you fast!

    And also beneficial and practical progress after a newly elected Democratic administration. And look at the size of it!

  8. 8.

    piratedan

    there’s simply no way that Richard Mayhew would have made this own goal… ///// :-)

  10. 10.

    lee

    While this is not nearly on the scale of ‘peak wingnut’, it is still 100% Balloon-Juice material.

  12. 12.

    janesays

    @Benw: Sort of. The subsidy amounts for 2020 aren’t changing, but the penalties for receiving too much subsidy are being nixed.

    One of the provisions of the bill is that anybody who underestimated their expected 2020 income when applying for ACA subsidies in 2019 will not be required to pay back any of the excess advanced premium credits they received when they reconcile their 2020 taxes. There will be no clawback for 2020 (this will not apply to 2021 and 2022, however).

    That alone is going to make about a $1,000 difference to my tax bill, but I’m not sure if the various tax software is going to get updated in time (tax day is only a little more than a month away).

  13. 13.

    Baud

    Y’all are laughing now, but just wait until Cole makes the same mistake in his 11 pm post.

  14. 14.

    PaulB

    I’m currently on COBRA, as I retired last December, and the premiums for my situation were better than I could get on the exchange (in effect, a gold plan, including both dental care and vision care, for the same rate as the bottom-level silver plan). At the time, I was not eligible for a subsidy.

    Well, now I am eligible, and I’m not sure what to do. Choosing to drop COBRA coverage is not normally something that leads to open enrollment on the exchange but I’m guessing I’m eligible, anyway, because of the February to May special enrollment period that Biden put in place.

    I’m also guessing that I’m not eligible for a COBRA subsidy, since I retired rather than losing my job, so no “free insurance until September” for me.

    At an estimated 53,000 adjusted gross income this year, though, I’ll now be eligible for an exchange subsidy. What I’m currently hoping to do is drop COBRA effective the end of the month and switch to an exchange plan (likely Bronze or Silver, given my current situation) for the remainder of the year.

    In my scenario in Washington State, I believe I’m eligible for about $450 a month in tax credits. Applied to a typical Silver plan, that would cut about $400 a month off of my premiums.

    Can anyone spot any flaws in this reasoning?

  15. 15.

    Brachiator

    @janesays:

    One of the provisions of the bill is that anybody who underestimated their expected 2020 income when applying for ACA subsidies in 2019 will not be required to pay back any of the excess advanced premium credits they received when they reconcile their 2020 taxes.

    I missed this in the first analyses of the bill that I read. If the IRS doesn’t do this on their end, it will require some hefty modifications by tax software providers.  The Premium Tax Credit changes, along with the $10,200 unemployment compensation exclusion, are big deals. And some states may be affected as well. That’s a lot of amended returns.

  17. 17.

    Ken

    “Dear analysts, As a business owner I profited greatly from last spring’s relief effort by getting subsidies to pay my employees, then firing them and keeping the money for myself. I have not found the equivalent in the new ARP. Can you help me?”

  20. 20.

    Brachiator

    @Benw:

    The IRS has to go back and recalculate everyone’s 2020 returns to implement some of the new credits, yeah?

    I am not sure that the IRS can easily do this. It might more likely fall on tax software and tax preparers.

  22. 22.

    Ken

    @Baud: Yes. They waited until all the Republicans left the room – no, sorry, that was the cloture vote.  They held the vote in one of the more sparsely-attended late-night threads.

  23. 23.

    trollhattan

    @WaterGirl:

    Given 2020 by itself equaled 4 or 5 years, yup!

    Not completely sure but think either today or tomorrow is the anniversary of my last day in the office. Hooboy!

  25. 25.

    TomatoQueen

    The MEMO has just arrived in email from the PolicyNet site (they tell us at SSA how to do what we’ve been told to do.) I BEG you, please call the toll free IRS number and tell all your friends.

    ”

    EM – Emergency Message

    Effective Date: 03/11/2021

    Identification Number:
    EM-21020

    Intended Audience:
    All RCs/ARCs/ADs/FOs/TSCs/WSUs
    /PSCs/OCO/OCO-CSTs/ODD/DPU/DPB/CFDPS/OHO/DDS

    Originating Office:
    DCBFM OFPO

    Title:
    EM-21020 Economic Impact Payments (EIP) as part of the American Rescue Plan Act of 2021- One Time Instruction

    Type:
    EM – Emergency Messages



    Program:
    All Programs

    Link To Reference:

    Retention Date: 09/11/2021
    A. Purpose

    This message provides general information for employees to answer questions from the public about 2021 Economic Impact Payments (EIP) for beneficiaries, recipients, and representative payees.

    Beginning immediately, refer callers inquiring about the Internal Revenue Service (IRS) EIP to the IRS website. For individuals who received an EIP and have questions about their payment, they may call TEL: 1-800-919-9835 where they may speak to an IRS live agent.

    B. Background

    The American Rescue Plan Act of 2021 (Act) is expected to become law on Thursday, March 11. Section 9601 of the Act includes the Department of the Treasury (Treasury) issuing economic recovery rebates for most individuals. SSA will not be directly involved in issuing these payments.

    The recovery rebate will be a one-time payment of $1,400 per individual, or $2,800 for joint tax filers, plus $1,400 for any age dependent as long as they meet the income eligibility requirements. Seniors and disabled adults who are claimed as dependents by someone else will be eligible for a payment.

    The amount of the recovery rebate available is for individuals who reported $75,000 or less in adjusted gross income on their 2019 or 2020 tax return, heads of household who reported $112,500, and couples filing jointly who earned $150,000.

    Treasury will issue the recovery rebate using the address or electronic payment information from individual’s tax return for 2020 or 2019. If a person did not file a tax return for 2020 or 2019, SSA will share data with Treasury for Old-Age, Survivors, and Disabled Insurance beneficiaries and Supplemental Security Income recipients to automatically issue an EIP, if eligible.

    Eligible individuals who did not receive a recovery rebate payment in 2019 and 2020 can receive the rebate in 2021 when they file a return for tax year 2020. Individuals have until October 15, 2021 to request IRS to issue an EIP.

    Per the Act, Treasury is required to issue EIPs as quickly as possible after enactment.

    EM-21020 – EM-21020 Economic Impact Payments (EIP) as part of the American Rescue Plan Act of 2021- One Time Instruction – 03/11/2021

    Link to this document:
    http://policynet.ba.ssa.gov/reference.nsf/lnx/03112021033558PM

  26. 26.

    sab

    @janesays: There is talk of postponing the due date again this year, since we have retroactive changes a month before April 15.

    Electronic filing only started Feb. 12.

  29. 29.

    Just Some Fuckhead

    A really good reminder that healthcare coverage in this country is too damned hard. Really though, all of David Anderson’s posts illustrate that.

  30. 30.

    Brachiator

    @sab:

    There is talk of postponing the due date again this year, since we have retroactive changes a month before April 15.

    I am curious to see how the IRS handles all this.

  31. 31.

    rjnerd

    Interesting, something in there that actually applies to me, and I hadn’t heard about it before. I have been paying COBRA since my wife passed. I now wonder what else is in there that I should know more about.

    In the case of COBRA, I wonder if the insurance company would bother mentioning it? I wonder if my most recent payment (4 days ago) was for April? (at $830/mo its a fair chunk of change)

    Thanks for letting me know.

  32. 32.

    Jaysails

    I’m trying to understand the unemployment provisions in this thing – basically premiums are free and you qualify for CSR if you collected unemployment at any time in 2021. That’s great, but I’m already signed up for the cheapest bronze plan – I shop on premium alone, as I reliably reach the annual out of pocket by February. So naturally, I bought the cheapest bronze plan available on the exchange. CSR is not available on a bronze plan. How will this work? Will I have an opportunity to switch to a silver plan? I’m completely confused.

  34. 34.

    Uncle Cosmo

    @TomatoQueen: Strangely enough, early this week I got a notice from the Infernal Revenooers Service (dated 21 Feb, thanky kindly, Louis DeJerk who needs to be in DeJail) that my $600 stimulus check (from last autumn) had been directly deposited to my bank account.

    I’m guessing most of the DeLay ;^) was due to a number of years of my electronically-filed Federal tax returns waiting in queue for the processing of an older one filed on paper last April. According to my tax preparer’s contacts at Eternal Revenue, as of a couple of weeks ago, that dead-tree filling had been entered into the system (though we are still awaiting its final disposition for all the other filings to come cascading down).

    So I’m guessing the remaining $1,400 will be along in good time. (And that I’ll be able to recover last year’s undeposited $1,200 by claiming it as a tax credit on my 2020 Federal return. This is why I pay my tax preparer the large male deer.)​

  35. 35.

    Uncle Cosmo

    @sab: There is talk of postponing the due date again this year, since we have retroactive changes a month before April 15.

    E-mail today from Peter Franchot, Comptroller of MD, announcing postponement of deadline for MD state taxes to July 15.

  37. 37.

    David Anderson

    @Jaysails: I believe you can qualify for an SEP to get a CSR-94 plan as you will be newly eligible for CSR

     

    https://www.healthinsurance.org/special-enrollment-guide/a-change-in-subsidy-eligibility-changes-your-options/

     

    HOWEVER if you have already met your out of pocket max and have bought the cheapest bronze plan, you are likely better off staying put, pocketing the subsidies to get a zero premium Bronze plan and pay no more out of pocket expenses.

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