The American Rescue Plan (ARP) was recently passed to reduce health care costs, expand access to coverage, and ensure nearly everyone who buys their own individual or family health insurance through a Marketplace can receive a tax credit to reduce their premiums. The following is a breakdown of what it means to you.
A New Open Enrollment Period Now Through May 15th
*New enrollees can enroll in a plan without providing proof of a special election period
*Current enrollees can make changes to their existing plan
*Coverage will start the first of the month after plan selection
The new law will lower premiums for most people who currently have a Marketplace health plan and expand access to financial assistance for more consumers. This means that if you made too much, you may now actually qualify for assistance.
In order to take advantage of the savings immediately, you must revisit your application via healthcare.gov. If processed this month, premiums will be lowered effective 5.1.
Consumers who enrolled in Marketplace plans prior to April 1 have the choice of waiting until they file their taxes next year in 2022 to receive the additional premium tax credit amount when they file and reconcile their 2021 taxes.
The increased subsidies are retroactive to 1.1.21.
Explanation on How the Premium Tax Credits Work
For consumers who are eligible for premium tax credits, an individual or a family’s tax credit amount is calculated based on the following factors:
Household’s total expected income for the year
Total number of people in the household that file taxes together
The tax credit calculation uses a percentage of the household’s income that they need to contribute (spend) on monthly health insurance premiums.
Prior to the American Rescue Plan, households had to contribute up to 9.83% of their income to pay for health insurance premiums to be eligible for tax credits. Consumers can choose to enroll in plans that cost more or cost less than the benchmark plan. Households with incomes greater than 400% FPL weren’t eligible for tax credits to help reduce the cost of purchasing a Marketplace plan.
Since passing the American Rescue Plan, individuals and families may be eligible for a temporary increase in premium tax credits for this year and next, with no one paying more than 8.5% of their household income towards the cost of the benchmark plan or a less expensive plan. Meaning, many consumers will be eligible for higher tax credit amounts to help cover their health plan premiums.
People who were involuntarily terminated April 1st-September 30th and offered COBRA will have their premiums covered for FREE until September 30, 2021.
People can not take the COBRA subsidy if they are now eligible for other coverage (including new group plan or Medicare)
Taxpayers who received unemployment compensation during any week beginning in 2021 may be eligible to receive additional premium tax credits to help pay for 2021 Marketplace coverage. -This part of the plan is not available at this time, but is estimated to be available by summer.
People who underestimated their income in 2020 won’t have to pay back the APTC when they file their taxes. No word yet what happens to those that have already filed and paid. I suggest contacting your accountant for more information.
Bright Health is a new provider that will offer plans via the Marketplace. Their network consists of Palos Medical Group and the Adventist network.
NO penalty continues! This means you will not receive a penalty for not having coverage or for obtaining a plan that does not provide the 8 coverages required by the Affordable Care Act.
Blue Cross Blue Shield and Cigna will continue to offer virtual visits. While Blue Cross Blue Shield only offers this service to their PPO plans, Cigna will offer the same service on all of their plans. Policy holders can call or chat online with a nurse practitioner to obtain a diagnosis and prescription for medication.
Carriers continue to waive cost sharing and co-pays related to COVID 19 testing and treatment. You MUST select an in-network provider/facility.
Northwestern Memorial will now accept plans from Cigna (Connect HMO). They will continue to accept Blue Cross Blue Shield (Blue Precision HMO and Blue Care Direct HMO).
Out of pocket maximum will increase to $8,500 per person. You can offset this by purchasing an accident or critical illness rider. The rider starts at $25 per month and provides coverage to you in the event of an accident or diagnosis of a critical illness (heart attack, cancer, or stroke).
Group plans are still an option for small employers. Blue Cross Blue Shield and now Humana offer relaxed guidelines during this time to allow for a 1-person group. The employer must have at least 2 full time employees that are not husband and wife. The employees can be 1099’d.
How to Avoid Rate Increases
Be prepared to discuss your household, estimated adjusted gross income for 2021. This will be used to determine if you qualify for assistance.
Those without pre-existing conditions should consider a short term medical plan. These plans do not provide coverage for pre-existing conditions, maternity, and limited wellness visits. However, these plans are a fraction of the cost of plans offered through the Marketplace and they all have a PPO network.
If you are going to opt to self-insure, protect yourself with an accident or critical illness plan. The plan works separate from health insurance and pays you based on a diagnosis of a critical illness (cancer, heart attack, or stroke) and in the event of an accident (slip, fall, and break an ankle) the plan will pay you a certain dollar amount. The purpose is to use the funds to pay towards the unexpected hospital or urgent care visit.
Review ALL of your insurance policies. I specialize in personal lines insurance, which includes auto, home, and Medicare. As a broker, I have access to multiple carriers which allows me the opportunity to find the best plan based on your needs. I’ve saved people thousands by reviewing rates with multiple carriers.
I am a broker. This means I represent MULTIPLE carriers which allows me the opportunity to review rates with each carrier. This helps me determine which carrier is offering the best package to fit your family’s needs. There is NO additional cost associated with working with a broker.
Each year Patti and I review your renewal. If there is a $100 increase to your home or auto insurance renewal, Patti will contact you to inform you of the increase and ask if it is okay to review options. I have saved some of my own clients $800+ per year just by reviewing their renewal!
I represent A+ carriers. Some of the carriers I represent are Travelers Insurance, AAA, The Hartford, Nationwide, Progressive, etc. When classified as an A+ carrier, this means they pay claims, have a good customer service department, and billing department.
It is easier to call one person for all of your insurance needs.
I have consistently saved people money on their home and auto insurance.
Patti will be reaching out to you soon to discuss your home and auto insurance policies renew and options to combine your policies.
What You Need to Know About Auto and Home Renewals
The summer months are the time that most homeowner’s insurance policies renew. The biggest reason is that many people purchase/move during the summer months.
Here are some tips to keep in mind when reviewing your renewals.
When looking at rates, always review the total package (i.e. home and auto). Often, some carriers will have a better rate on home as opposed to auto however, the total calculation needs to be reviewed when determining the best scenario.
Consider a higher deductible. Most people now have a $500 deductible on auto and $1,000 deductible on home.
When reviewing rates, make sure to consider the wind/hail deductible. Some carriers will now require a 1% deductible for wind/hail claims. If your deductible is $1,000 and your replacement cost is $250,000, your wind/hail deductible would be $2,500. This means any claims related to wind/hail are subject to a separate, larger deductible. If your current policy has $1,000 deductible, you’ll need to get an accurate comparison.
Do NOT skimp on coverages. Dropping your liability limits saves very little in your annual premium.
If you own a rental, also assess the total package when shopping rates. Some carriers will require the primary residence in order to consider the rental property. Their rates can be ½ of what the other carriers offer by packaging your primary residence with the same carrier.
Ask to have your home’s replacement cost recalculated. Each year the carrier will increase the dwelling coverage to protect against inflation.
Make sure you are matching coverages. Some carriers are notorious for removing full coverage to reduce the rate. Sadly, some people do not realize that until they have an accident. Full coverage means the carrier will fix your vehicle in the event of an at-fault accident. On the flip side, liability only means your vehicle is NOT getting fixed in the event of an at-fault accident.
Choose your words wisely when calling other companies. If you tell an agent you want the “cheapest rate possible” or “basic coverages”, this often means the lowest possible liability limits ($25,000/$50,000) and liability-only coverage. Again, you do not save much by reducing the liability limits.
If you would like to get a free quote and find out how you can save money by about combining your insurance policies, please call Kelly or Patti at 708-444-0050. Get Ready to Save!
The U.S. economy is struggling to come back from the coronavirus. One area that proves to be surprisingly strong is Housing. Because of low mortgage rates, real estate in many cities, including Illinois, are selling nearly as briskly as it was before Covid-19. Properties that come on the market that are priced right are gone in a matter of hours.
According to Redfin, more than 41% of homes faced a bidding war in the four weeks ending May 10. That’s up from just 9% in January before the pandemic hit the U.S
If you’re hoping to buy a home in a hot real estate market, here’s what you need to know:
Do your research
A Travelers Insurance article states, Starting your hunt virtually while sheltering in place can be beneficial if you find you have the time to shop online more thoroughly; that extra effort may give you an advantage in finding a home you love within your price range
Many real estate agents post virtual tours of properties for sale on their websites and YouTube. When you take a virtual tour or attend a virtual open house, you can get a realistic view of the property.
Get Preapproved for a Mortgage
The Travelers article also mentions, get a mortgage preapproval before you begin house hunting. It may be possible to get preapproved online, so consider looking into that option. A mortgage preapproval is a letter from a lender that indicates how much you are qualified to borrow from the lender, at a specific interest rate.
Check your credit reports and get your credit score. Good credit, such as a FICO score of 620 or higher, will qualify you for a conventional mortgage and lower interest rate.
Gather all the information your lender will need to start the mortgage preapproval process: income information (W-2 statements from the last two years and recent pay stubs); asset information (bank statements and investment account statements); and your personal identification.
According to Money.com, homes that are clean and priced well will sell in the first weekend or week on the market. Just as COVID-related shutdowns began, you should look at properties as quickly as you can when they come on the market.
If and when you make an offer, stay available to accept or reject counteroffers. The listing agent isn’t going to wait for you. Also, choose a lender who can do a speedy closing — within seven to 10 days.
Since there has been bidding wars on house buying, you may need to make an offer on more than one property, and yours may be just one of multiple offers. Multiple offers are increasingly the norm, especially in the spring market. The money.com article also suggests because you might need to bid higher, don’t look at homes at the top of your price range. Know your maximum price and look at properties listed for less than that, so you have room to make a higher offer if that’s required.
Put 20% down and bump up your earnest money
Money.com also states the more money you put down, the stronger your offer will appear. The same is true of earnest money.
Even during these challenging times, there is still much you can accomplish in your quest to find your dream home. If you’re planning to buy a house, you’ll need homeowners insurance.
Insurance Steps to Consider When Purchasing a New Home
The most obvious step is to obtain quotes for the new residence. You’ll need to know specifics about the residence: year built, square footage, construction, etc. Most of this information is available online. Your agent should be able to obtain this information with a proper address.
Have your agent review your auto as well for a complete package. Typically, you obtain the best rate by packaging your home and auto together.
The agent will calculate a replacement cost estimate to determine how much coverage you need to insure your home (aka dwelling coverage). The replacement cost estimate is obtained by using the information above.
Think about how you will title your property. Homeowners insurance should list all names that are listed on the title.
Be sure to discuss any areas of additional concerns with your agent (i.e. if you run your business from home, if you have expensive jewelry, or if you have any collections). Coverage is inexpensive to add and will make your life easier during the claims process.
If your new home has a pool, consider an umbrella policy. An umbrella policy is extra liability. A pool always means more visitors which inevitably leads to an increased opportunity for injury. With a cost of $150+ per year for $1 million in coverage it may be worth it to consider the policy.
Share your agent’s contact information with the person handling your financing. They will eventually want to obtain proof of insurance and confirm the home is properly protected. It is also helpful for the agent to obtain a copy of your appraisal to ensure the replacement cost estimate is accurate. Not everything online is accurate!
Same as above, however you should also let your agent know what you will be doing with your existing home. This is important because the coverage type will change. If you are not properly covered, the carrier may NOT cover your claim. Often people plan on selling the existing home, but the property ends up vacant for a longer time frame than anticipated. In the event of a loss, the carrier will DENY coverage because the property is vacant. We can fix this by switching the policy to a Landlord policy or Vacant policy. Most carriers will allow for a property to be vacant for 30-60 days.
What you NEED to know about your Insurance and COVID 19
There have been many questions that have come up concerning the effects of your insurance during this COVID-19 crisis. I understand these are stressful and unsettling times for everyone and I am here to help and answer the questions you have about the changes and updates for health and auto insurance.
Health, Medicare, Short-Term Medical, including Marketplace plans
Ambetter: Ambetter will cover COVID-19-related testing and treatments at no cost to you. You do not need prior authorization.
BCBS: (Includes Individual health plans, Group/Employer health plans, and Medicare)
Testing: You won’t pay copays, deductibles or coinsurance for medically necessary lab tests to diagnose COVID-19. You do not need prior authorization to test for COVID-19.
Testing-Related Visits: You won’t pay copays, deductibles or coinsurance with in-network providers for visits related to COVID-19, whether at a provider’s office, urgent care clinic, emergency room or by telehealth. (Testing must be medically necessary, consistent with CDC guidance and at the direction of a doctor.)
Treatment: You will not pay copays, deductibles or coinsurance related to treatment for COVID-19. This applies to costs associated with COVID-19 treatment at in-network facilities and treatment for out-of-network emergencies.
Currently, this covers treatment from April 1 to May 31, 2020.
You may also access your Virtual Visits benefit2 provided by BCBSIL and powered by MDLIVE3. You can consult a board-certified doctor for non-emergency situations by phone, mobile app or online video 24 hours a day, 7 days a week. Virtual Visits doctors can even send e-prescriptions to your local pharmacy. (MDLIVE is not available for Medicare.)
Cigna: Cigna is waiving out of pocket costs for COVID-19 testing-related visits with in-network providers, whether at a provider’s office, urgent care center, emergency room or via virtual care, through May 31, 2020.
National General: National General will waive 100% of customers’ out-of-pocket costs for COVID-19 diagnostic tests and will ease access for customers seeking diagnostic testing. This waiver will extend to all National General Short-Term Medical customers.
United Healthcare: (Includes Medicare Advantage, Individual and Group health plans) United Healthcare is also waiving cost-sharing for COVID-19 testing and the testing-related visits. Cost-sharing is also waived for COVID-19 treatment until May 31, 2020. * Starting March 31, 2020 until June 18, 2020, UnitedHealthcare will also waive cost-sharing for in-network, non-COVID-19 telehealth visits for its Medicare Advantage, Individual and Group/Employer plans.
Marketplace: As a reminder, if you’ve had a loss of income, you may qualify for the additional annual premium tax credit.
Auto Insurance Updates
Because COVID-19 stay-at-home orders, there have been fewer drivers on the road, which means few accidents. Auto Insurance companies are recognizing this and rewarding customers with discounts and refunds.Here is a full list of the discounts by provider.
Travelers: Launched the Stay-at-Home Auto Premium Credit Program, which will automatically give U.S. personal auto insurance customers a 15% credit on their April and May premiums
Kemper: Providing a 15% deduction for April and May as long as the policy was in effect April 30.
Hartford: Giving 15% for April and May
Mercury: Giving up to 15% discount by May
Safeco: Providing a 15% refund on two months of auto premium, based on your premium amount as of April 7.
They are planning to issue the refund in the manner you made your most recent payment or by check.
They will begin issuing refunds in the coming weeks after they have approval from state insurance regulators.
Your refund will happen automatically, and you do not need to call to get your refund.
AAA – The Auto Club Group: Providing $60 million in premium refunds to its auto insurance customers. Every policyholder with auto insurance in effect as of April 30 will receive a 20% policy refund applied to two months of premium, for April and May.
We all have been affected by this COVID-19 crisis and I want you to know that I am here to assist you in any way I can. You can contact me at 708-444-0050 or firstname.lastname@example.org if you have questions. I am also offering remote meetings by Phone, ZOOM or GoTo Meeting to help answer any concerns you may have.