Marketplace Subsidies and Unemployment Compensation

ACE TA Center

New Marketplace subsidies are available for people who received unemployment compensation in 2021

Starting July 1, people who received or who were approved to receive unemployment compensation in 2021 will be eligible for enhanced subsidies for Marketplace coverage through HealthCare.gov or their state marketplace through the end of 2021. This allows unemployed or underemployed consumers to take advantage of enhanced advance premium tax credits (APTCs) and cost-sharing reductions (CSRs), including those who make below 100 percent or above 400 percent of the federal poverty level (FPL). These subsidies are provided through the American Rescue Plan Act. 

Who is eligible for these new enhanced subsidies?

People who received or who were approved to receive unemployment compensation for one or more weeks beginning in 2021 are eligible for themselves and their families through the end of the year. This includes individuals who are currently employed but are not offered affordable employer sponsored insurance

What is the benefit?

Eligible people will be treated as if their household income is between 100 percent and 133 percent FPL, regardless of their actual income. This makes them eligible for zero-premium health insurance, as well as the maximum amount of cost-sharing reductions (CSRs).

What does this mean for consumers in the Medicaid coverage gap? 

Some people who live in one of the 12 states that have not expanded Medicaid are not eligible for Medicaid and do not make not enough to qualify for Marketplace subsidies. Beginning July 1, consumers in the Medicaid coverage gap who received at least one week of unemployment compensation in 2021 (and who meet other criteria, including not having an offer of affordable employer coverage) are now eligible for the new enhanced subsidies.

How long are these enhanced subsidies available? 

The enhanced subsidies are a temporary provision that lasts through the end of 2021. 

How can consumers apply through HealthCare.gov or their state marketplace? 

New HealthCare.gov enrollees who are currently receiving unemployment compensation will automatically receive the enhanced APTC and CSR when applying for coverage. Those who are not currently receiving unemployment compensation will be asked whether they have received or were approved to receive unemployment compensation at any point in 2021. 

Existing HealthCare.gov enrollees who are currently receiving unemployment compensation should update their applications by Reporting a Life Change in order to receive the enhanced APTC and CSR. Enrollees not currently receiving unemployment compensation should also update their applications and will be asked whether they received or were approved to receive unemployment compensation at any point in 2021. 

Consumers that live in states that do not use HealthCare.gov should contact their state-based Marketplace for more information about how to get these subsidies. Some states are applying this premium discount automatically, and some have different implementation timelines. 

When do these enhanced subsidies take effect?

For HealthCare.gov consumers, the enhanced subsidy will take effect on the first day of the month after they enroll, no matter when they apply during the month. For example, if a consumer enrolls or updates their application on July 31, the subsidy will take effect on August 1. 

How does this provision differ from the COBRA subsidy? 

The COBRA subsidy ends in September, 2021 (access American Rescue Plan Subsidies Make Marketplace and COBRA Insurance More Affordable). If consumers choose to apply for Marketplace coverage after their subsidized COBRA coverage ends, they will still be eligible to receive the enhanced subsidies for 2021 Marketplace coverage.