The American Rescue Plan Act of 2021 (ARPA), also called the COVID-19 stimulus package, is a nearly $2 trillion economic stimulus bill signed into law by President Joe Biden on March 11, 2021. It is intended to speed up economic recovery and reduce the effects of the COVID-19 pandemic.

The Rescue Plan Act includes key changes to make health coverage more affordable by:

• Extending unemployment benefits
• Providing direct, individual stimulus payments of $1,400
• Continuing a 15% increase in food stamp benefits
• Lengthening child tax credit and earned income tax credit
• Making student loan debt forgiveness tax-free
• Providing grants to small businesses
• Providing funding to help state, local and tribal governments bridge budget shortfalls
• Implementing COVID-19 funding for vaccines, testing, contact tracing, and funds to the Centers for Disease Control and Prevention, U.S. Food and Drug Administration, and to local health departments for workforce and program development
• Contributing grants to public transit agencies, commuter rail agencies, airlines, airline contractors, and airports to mitigate the revenue drop due to the pandemic
• Granting debt forgiveness to socially disadvantaged farmers
• Making changes to health care, which will impact Maryland Health Connection.

Some other changes include:

• Making COBRA free for recipients until Sep. 30, 2021
• Making the following changes to the Affordable Care Act:
  • Removes the 400% Federal Poverty Level (FPL) income limit on premium subsidies. Instead, anyone can be eligible for premium subsidies if the cost of their premiums is more than 8.5% of their income.
  • Increases subsidies that are already available to low-income households.
  • Creates a special rule whereby anyone who qualifies for unemployment automatically qualifies for the maximum amount of subsidies.
  • Protects anyone who received Advance Premium Tax Credits in 2020 from having to pay back (clawback) excess tax credits
  • Requires Medicaid and Children’s Health Insurance Program to cover COVID-19 vaccines and treatment
  • Allows states to provide 12 months of postpartum coverage for new mothers
  • Introduces new incentives for states to expand Medicaid coverage.

Effective April 1, 2021, pursuant to the Rescue Plan, Maryland Health Connection has removed the income limit on premium subsidies, increased subsidies for lower income households, implemented the special rule for unemployment households, and automatically redetermined more than half of current enrollees for higher benefit amounts. In addition, the Coronavirus Special Enrollment Period has been extended to Aug. 15, 2021, so that Marylanders have an opportunity to take advantage of these lower costs for an extended period outside of the annual open enrollment period.

The health care provisions in the American Rescue Plan Act are temporary for now – the maximum subsidy rule for households with unemployment recipients is for 2021 only, and the increased premium subsidies and removal of the income limit are effective only for 2021 and 2022. However, Congress and the Biden administration could make these changes permanent. Stay tuned!