Low to No Cost Health Insurance Now Available for Unemployed Americans

Americans who received unemployment in 2021 might be eligible for no-cost or low-cost health insurance through HealthCare.gov, as part of the American Rescue Plan Act (ARPA). Read on for details on who’s eligible, how to sign up, and what employers should know.

Background: What is ARPA?

The American Rescue Plan Act of 2021 (ARPA), which was first announced in January 2021, the relief package and culmination of President Biden’s efforts to pass legislation designed to assist Americans and industries that have been negatively impacted by the ongoing COVID-19 pandemic. 

President Biden signed the bill into law on March 11, and it includes provisions such as small business relief for restaurants and bars, direct stimulus payments to Americans, expanded child tax credit, a COBRA subsidy, and expanded unemployment benefits.

Who is Eligible for Low-Cost or Free Health Insurance?

Starting July 1, 2021, individuals who received unemployment benefits in 2021 might be eligible for free or low-cost health insurance through August 15 on HealthCare.gov’s website.

According to the Centers for Medicare & Medicaid Services (CMS), “An average of three out of five eligible uninsured Americans can access $0 plans after advance payments of tax credits and an average of four out of five current HealthCare.gov consumers will be able to find a plan for $10 or less per month after advance payments of tax credits.”

In order to qualify, the individual or the individual's spouse must have received unemployment income for at least one week in 2021. 

According to Healthcare.gov, “If you or your spouse got unemployment income for at least one week in 2021, your whole household may be eligible for a tax credit that covers the entire monthly premium for the second lowest cost Silver plan (SLCSP) that’s available to you in your area, regardless of your household’s income.”

It’s also important to note that individuals who were unemployed at some point in 2021 can still qualify for these healthcare savings even if they’re now employed, as long as they’re not receiving healthcare coverage from their current employer.

How Can Unemployed Individuals Sign Up for Free Insurance?

Anyone who received unemployment payment during 2021 is encouraged to apply for these no-cost or low-cost plans through HeathCare.gov’s website. 

If you’re new to the Marketplace, it’s best to sign up and see if you qualify. Otherwise, if you’re already enrolled in Marketplace coverage but received unemployment benefits this year, you can update and change your plan. 

According to HealthCare.gov, “When reporting income on your application, include all unemployment compensation except the extra $300 each week you may be getting in federal pandemic unemployment compensation due to COVID-19.”

If your state doesn’t use HealthCare.gov, visit your State Marketplace website to apply.

What Should Employers Know about this Free Coverage?

Employers should take note that current employees who receive health coverage through their employer plan are not eligible for this free health insurance through Marketplace—even if they were unemployed earlier this year.

For employers who laid off employees due to the COVID-19 pandemic, those individuals might be eligible for a low- to no-cost plan. In some cases, individuals may still receive health coverage through COBRA. In these instances, experts say it might be worth switching to one of these Marketplace plans before the COBRA subsidy ends in September.