Does Bien Care Cap Premiums?

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The rescue plan or Healthcare American Rescue plan was signed into law by President Biden March 11th 2021.

It is far-reaching and it has many aspects.  The health-care aspects of it today and this is  not a threat to folks that are on the Affordable Care Act. 

What it does is exchange and previously the amount of a subsidy that you could get under your household income. 

That amount was lowered to 8.5%. Now this does not happen for forever, it happens for 2021 and 2022. 


It is retroactive to January 1st of 2021 but it’s only for two years. What that also means is that people will have extra subsidies and not have to pay any premium at all if they are less than 150% of the federal poverty level. 

The information in terms of the updated subsidies and therefore the updated premium when is it supposed to be updated as of April 1st. Again it’s going to be retroactive to January 1 of 2021, what is true before and is none of this is based on future projected income for 2021.

 So of course nobody’s guess is perfect and if you’ve got a steady job you’re not getting a raise or you’re not getting your salary decreased. 


You might have a pretty good estimation but the point is that you were an advanced premium tax credit at the end of the year 2021, for your 2021 taxes by January 15th of 2022 estimated perfectly all incomes this 8.5% apply. 

So this is probably the biggest change specifically as a premium tax credit adds 400% of the federal poverty level. 


Before you made more than 400% up you could apply for an ACA individual plan but you wouldn’t get any money from the government to help pay for the premium. 

So what does that mean for the federal poverty level hypothetically; if you have a family of four  and you make $110,000 dollars a year do you have to pay about $18,000 a year in premium, but because of their premium is capped out at $9,350 you wouldn’t have to pay it all. 

For a sole proprietor where they always historically had to go out and had to buy their own health insurance, and their sole proprietorship was around a hundred dollars a year and now they’d have to be able to only have to pay $9,300 for their family.  That’s a pretty significant change.


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