Everyone knows about the $1,400 stimulus checks by now, but there are more savings in the March stimulus law that can benefit you!
The bill covers FIVE ways for you to save on health care costs! We’re covering them below:
1. FREE COBRA insurance premiums through September
Normally, if you lose your job, you can buy insurance coverage through your former employer under the Consolidated Omnibus Budget Reconciliation Act (COBRA) program. For this, you still have to pay full price, which can obviously be costly. Now, however, the government will actually pay the entire COBRA premium from April 1 through September 30 for both laid-off employees and family members!
This does not apply to you if you have Medicare, if you chose to leave your job, or if you become eligible for a new employer-based health insurance somewhere else.
The stimulus law requires employers to send a notice of eligibility to any former workers. In case you got laid off but did not receive this, you can contact your former employer to ensure you’re signed up for coverage.
2. Less expensive health insurance!
Thanks to the stimulus bill, you may now qualify for new, short-term health insurance subsidies to buy coverage on HealthCare.gov. If you buy your own insurance through the Affordable Care Act, you are likely eligible for a discount.
Essentially, the bill makes you eligible for more than you were earlier. If you already qualified, you can now receive more. If you weren’t previously eligible, you might be now.
For these new benefits, you will need to sign up for plans at HealthCare.gov or insurance marketplace websites. The changes will be retroactive to 1st January, 2021. What this means is that if you’re already on a medical plan through the ACA, you’ll get money back as a refund when you file your 2021 taxes. These new subsidies are funded by the American Rescue Act for two years.
3. Tax-deductible medical expenses
Congress has expanded tax-deductible medical expenses. Now, instead of capping expenses that exceed 10% of your adjusted gross income (AGI), you can deduct medical expenses that exceed 7.5% of your AGI.
To find a full list of medical expenses you can deduct, check the IRS website.
4. Greater tax-free contributions
Good news for those with a health care FSA: The limit for tax-free contributions has increased by $50 to $2,750, as part of the IRS’s annual inflation adjustments. You can, therefore, contribute more without having to pay more taxes.
5. Health insurance through August this year
Normally, you need to wait for the six-week open enrollment each fall in order to sign up for health insurance. However, the American Rescue Plan Act moved this to mid-August.
Subsequently, several state marketplaces have done the same. So you can now go to HealthCare.gov or your state option and sign up for insurance if you need to, and can take advantage of the new subsidies and changes. This can help you save money by letting you sign up for a lower-cost plan sooner.
The average cost of health insurance in the US is nearly $500 per person per month in 2021. Associated costs can bump this up even more. We hope the tips in this article help you lower health insurance costs this year!
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