President Biden’s $1.9 trillion stimulus plan, called the American Rescue Plan Act (ARPA), was signed in to law mid-March. The plan includes some exciting changes for how Coloradans can access and afford health care. This blog post is the first in a series called Understanding the American Rescue Plan in Colorado. The series will explain health coverage aspects and other information relevant to you and your clients. This first blog focuses on changes to Colorado’s state-based marketplace, Connect for Health Colorado, and private health coverage.
Why is the ARPA important?
As you well know, health insurance is unaffordable for many Coloradans, and many Coloradans with health insurance struggle to pay the out-of-pocket costs and reach their deductibles. The ARPA addresses the importance of health coverage, particularly considering COVID-19, and helps people afford health coverage. It is the biggest expansion to health coverage since the Affordable Care Act.
Increased Premium Tax Credits on Connect for Health Colorado
For Coloradans who purchase their health insurance through Connect for Health Colorado, the ARPA decreases the amount they pay towards their monthly premium, regardless of income level. This means:
- Coloradans with incomes up to 150% of the FPL will be eligible for a plan with a zero-dollar premium. This plan will be the second-lowest cost silver plan because of how Premium Tax Credits are calculated.
- Coloradans with incomes above 400% FPL will be eligible for tax credits for the first time. Previously, people at this income level could not receive tax credits.
- Coloradans who are approved for or receive Unemployment Benefits at any point in 2021, even for a week, will be eligible for a health insurance plan with a zero-dollar premium. Their income will not be counted in determining their tax credits when applying for coverage or at the end of the year on their tax return. This means that even if a person makes more in 2021, they will not have to pay back any excess tax credits (a process known as ‘reconciling’). This is only available in 2021.
The ARPA also says that Connect for Health Colorado customers do not need to pay back overpayment of tax credits from 2020. Coloradans could have received ‘extra’ tax credits if their actual 2020 income was higher than what they estimated when they signed up for coverage.
Coloradans can also use their increased tax credits and shop around, for example, they may choose to enroll in a gold plan with a lower deductible and a lower monthly premium. The increased premiums may not cover the whole cost of the gold plan, but they will make it much more affordable and give a higher level of benefits to the person. Connect for Health Colorado expects to make system changes by May 15 so starting June 1 current customers will save an average of 49% or $56.30 on their monthly premium.
These changes will be applied retroactively to January 1, 2021. Customers whose premiums are lowered because of the increased tax credits will receive the difference between their previous premium payments and updated premiums on their taxes next year.
100% COBRA Subsidies from April 1 – September 30
Through September 30, the federal government will pay for 100% of Consolidated Omnibus Budget Reconciliation Act (COBRA) premiums. Enrolling in COBRA allows individuals to remain enrolled in their employer-sponsored coverage after their employment ends or their hours are reduced by paying for the full cost of coverage. Eligible Coloradans who chose not to enroll in COBRA when they lost their jobs can now enroll with full subsidies and will not have to pay premiums from previous months they were eligible for COBRA, as it typically required. Deciding to enroll in a plan through Connect for Health Colorado or COBRA is a very personal decision. Someone who had already met their deductible on their employer plan, or wants to stay with a specific doctor, may prefer COBRA. More information about COBRA is available from
We don’t know yet if these individuals will receive a Special Enrollment Period to enroll in Connect for Health Colorado when their COBRA subsidies end. We will share information in the CKF newsletter, monthly meeting and update this blog as it becomes available.
Visit our blog to read the next post of the series – Understanding the American Rescue Plan Act in Colorado: Health First Colorado and CHP+.
More resources for a deep dive into how the ARPA impacts health coverage include:
- Center on Budget and Policy Priorities, Health Provisions in American Rescue Plan Act Improve Access to Health Coverage During COVID Crisis
- Kaiser Family Foundation, How the American Rescue Plan Will Improve Affordability of Private Health Coverage
- S. Department of Health and Human Services, The American Rescue Plan: Reduces Health Care Costs, Expands Access to Insurance Coverage and Addresses Health Care Disparities
- Health Affairs, Guidance on Tax Credit Reconciliation, COBRA Subsidies Under American Rescue Plan