Over 14.5 million Americans elected to receive health coverage through one of the ACA’s insurance marketplaces during the 2022 open enrollment period.
The record-breaking participation is 21% higher than the signups for the 2021 open enrollment. Of the 14.5 million, 5.8 million were new signups, meaning they hadn’t previously received ACA coverage through the marketplace. “The previous record was nearly 12.7 million sign-ups for 2016, the marketplaces’ third year,” according to The Washington Post.
Regarding specific participation in ACA coverage, the federal healthcare.gov platform, which 33 states operate off, experienced 10.3 million signups. The remaining 17 states and the District of Columbia witnessed the outstanding 4.2 million enrollees.
With respect to the cost of coverage, a sizable 32% of the healthcare.gov enrollees selected a plan for $10 or less per month, thanks to the American Rescue Plan and the additional premium subsidies it introduced.
Interestingly, several conservative states, such as Florida, Texas, and Georgia also experienced the highest enrollment figures since the ACA was first introduced.
These numbers are expected to rise as well, with many state-based marketplaces, such as Kentucky, New Jersey, New York, Rhode Island, and California still accepting signups for coverage via special enrollment periods.
Health and Human Services Secretary Xavier Becerra said in the official Centers for Medicare and Medicaid (CMS) press release, “The numbers say it all: We are delivering on our commitment to make health care a right for Americans and to ensure it is accessible and affordable.”
Open enrollment for the 2022 plan year ran officially from November 1, 2021, to January 15, 2022. While select states allow for continued enrollment and the final numbers are tallied, the final total for 2022 open enrollment will likely exceed 15 million.
Several factors contributed towards the record-breaking levels of ACA marketplace participation including, increased outreach, health carrier expansion, an extended window for signing up, additional funding for ACA navigators, and most importantly, Biden’s American Rescue Plan.
The American Rescue Plan allows consumers with income up to 150% of the Federal Poverty Level (FPL) the opportunity to receive premiums for as little as $0 a month via Premium Tax Credits (PTCs). For the first time ever, the American Rescue Plan also extended subsidized coverage to individuals with income at 400% of the FPL and beyond. These higher-income individuals can receive monthly coverage for no more than 8.5% of their income.
Americans can currently receive these reduced healthcare subsidies through the remainder of 2022, though Biden’s Build Back Better plan in its current form would extend the timeframe through 2025.
With more Americans opting for ACAcoverage through federal and state marketplaces, employers should be prepared for increased enforcement of the ACA’s Employer Mandate. That’s because the PTCs that the state and federal marketplaces issue to consumers are the trigger for identifying which employers complied with their ACA responsibilities.
Under the ACA’s Employer Mandate, employers with 50 or more full-time employees and full-time equivalent employees are Applicable Large Employers (ALEs) and must:
- Offer Minimum Essential Coverage (MEC) to at least 95% of their full-time employees (and their dependents) whereby such coverage meets Minimum Value (MV); and
- Ensure that the coverage for the full-time employee is affordable based on one of the IRS-approved methods for calculating affordability.
The ACA furnishing and reporting deadlines for the 2021 tax year are approaching rapidly. Employers must be diligent in their ACA compliance efforts. If you need assistance meeting the various ACA reporting deadlines, both federally and at the state level, contact us to learn about our ACA Complete solution.
For assistance coding your 1095-C forms this year, download the Employer’s Guide to Coding the Form 1095-C below.
To gain invaluable insights on penalty amounts, affordability percentages, filing deadlines, expert tips for responding to penalty notices, and proven strategies for minimizing IRS penalty risk, download the ACA 101 Toolkit.