Thanks to the American Rescue Plan, more of America’s middle class will be eligible to receive health insurance premium assistance through Covered CA statewide or through nationwide. The premium assistance cutoff has been bumped up from 400% of the Federal Poverty level (FPL) to 600% of the FPL and goes into effective April 12th and applied to May premiums. In 2020, California already expanded the subsidy cutoff from 400% to 600% of the FPL with Governor Newsom’s new recent budget bill.

While California already offers subsidies to individuals and families earning up to 600% of the FPL, the American Rescue Plan will provide additional subsidies to Californians. The American Rescue Plan mandates that Americans earning below 600% of the FPL do not have to pay more than 8.5% of their household income towards the 2nd most affordable silver plan. This is substantial as currently, Covered CA allows people earning 500% of the FPL to pay up to 16% of their household income or 18% for those earning 600% of the FPL. Approximately 14% of the population or 430,000 Californians currently enrolled off-exchange (direct to carrier) may benefit from the newly available premium assistance. The new subsidies will be available through the end of 2022. Current Covered CA households will save on average $119 per month. Current off-exchange households who fall between 400-600% of the FPL may qualify for $500 per month. Below are expandable images of the Federal Poverty level Chart and Required Contribution Curve for 2021.

If you, your family, and/or loved ones fall below 600% of the Federal Poverty Level but are not currently enrolled through Covered CA, it is strongly advised that you review if you qualify for these new subsidies. The new tax credits will be available April 12th and applied May 1st but also applied retroactively back to January 1st (if you enrolled in Covered CA back to January 1st). We will not be able to calculate your new federal premium tax credit until April 12th. You may still qualify for premium assistance before applying for the new American Rescue Plan relief. You can get your free quote by clicking here.

If you have any questions about your health insurance benefits and/or would like an independent health insurance quote, please contact us at or at 310-909-6135. At Solid Health Insurance Services, we strive to keep our clients informed about their benefits so that they may get the most benefit out of their health plans.