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Schreder: Entrepreneurs, the American Rescue Plan and Health Insurance

March 22, 2021

Guest post by Lynn Schreder.

The American Rescue Plan (ARP), recently signed into law by President Biden, increases and expands eligibility for Affordable Care Act (ACA) premium subsidies for people enrolled in marketplace health plans. The law also creates new, temporary premium subsidies for COBRA continuation coverage; and it temporarily changes the rules for year-end tax reconciliation of marketplace premium subsidies. These changes will improve the affordability of coverage for individuals who are already enrolled in marketplace health plans, and will provide millions more an opportunity to newly sign up for coverage with increased financial assistance this year.

So, what does this mean to an entrepreneur?  

It means there is greater opportunity to obtain a more reasonably priced health insurance plan for the business owner and their family. In addition, all ACA plans are guarantee issue, meaning there are no health questions asked in order to obtain coverage.

In addition, the government created a Special Enrollment Period (SEP) for any eligible person to make changes or enroll in ACA coverage from Feb. 15th through May 15th, 2021.  Typically, the only time one can enroll into ACA coverage is from Nov. 1st through Dec. 15th each year for a Jan. 1st effective date.  Enrollment can occur at other times throughout the year due to special events, requiring documentation.

The easiest way to begin looking at options is to contact your local health insurance agent.  You can “find an agent” by accessing www.healthcare.gov and then click “Find Local Help”.

“Silver” health insurance plan sample rates:

  • A 35 year old single person making $40,000/year can expect to pay $211/month, using $256/month in premium tax subsidies paid by the federal government
  • Two 35 year old married people making $40,000/year in their household can expect to pay $109/month covering both spouses, taking advantage of the $826/month premium tax subsidy
  • A 28 year old single person making $25,000/year can expect to pay $38/month, using $378/month in a premium tax subsidy
  • A 40 year old with a 40 year old spouse and 2 kids, 10 and 12, making $140,000/year can expect to pay $992/month (equaling 8.5% of household income), using $572/month in a premium tax subsidy – prior to this new legislation, this family would not have qualified for a tax subsidy

In order to obtain subsidies, you must file a federal tax return for the year you are getting a subsidy and must not have an employer group health insurance plan offered (that meets quality and affordability requirements) to you or your spouse.

Here’s the bottom line:  if you own your own business or want to start a business, don’t let the cost of health insurance be your deterrent!  Check out your options – you might be pleasantly surprised!

Lynn Schreder is the owner and President of Khi Solutions.

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Schreder: Entrepreneurs, the American Rescue Plan and Health Insurance | Clay & Milk
A central Iowa ag-tech accelerator has secured more backers and finally has a name. The Greater Des Moines Partnership first announced the accelerator last year, naming four initial investors. On Monday, the Partnership said the program will be called the "Iowa AgriTech Accelerator" and named three new investors. The new investors include Grinnell Mutual, Kent Corp. and Sukup Manufacturing, all Iowa companies. They join investors Deere & Co., Peoples Co., Farmers Mutual Hail Insurance Co. and DuPont Pioneer. Each investor has agreed to put up $100,000 for the first year of the accelerator. Startups entering the program will receive $40,000 in seed funding in exchange for 6 percent equity. Tej Dhawan, an angel investor and local startup mentor, is serving as interim director until the AgriTech Accelerator names a permanent leader. Dhawan held a similar role with the GIA before Brian Hemesath was named as managing director. As interim director, Dhawan said his main job includes hiring the accelerator's executive director, establishing a business structure and initial recruiting for the first cohort. The accelerator will place few filters, such as location and product, on the applicant pool, Dhawan said. "When you’re seeking innovation, innovation can come from every corner of the world so why restrict ourselves," he said. One area the the AgriTech Accelerator won't recruit from is biotech. For its first cohort, the AgriTech Accelerator will work out of the GIA's space in Des Moines' East Village, Dhawan said. A future, permanent home is still to be decided. The accelerator's program will host startups from mid-July through mid-October, ending with an event connected to the annual World Food Prize. The GIA, which the AgriTech Accelerator is based on, also ends with presentations at an industry event. The accelerator has also started lining up a mentor pool. The Iowa Corn Growers Association, Iowa Soybean Association and the Iowa Pork Producers Association have agreed to provide mentors, as has Iowa State University. While the AgriTech Accelerator is loosely based off of the GIA, it will differ in its business structure, Dhawan said. The GIA runs through a for-profit model for both operations and its investment fund. The AgriTech Accelerator will have a nonprofit model for its operations and a for-profit setup for its fund. Dhawan said the nonprofit model is being used so the accelerator can better work with other nonprofit partners, such as trade associations. "These are all organizations that are nonprofits and can be amazing stakeholders without ever having to be investors in the accelerator," he said. "It becomes easier to work with trade associations in their nonprofit role when we are also a nonprofit." When it's up and running, the AgriTech Accelerator would be one of a handful of ag-focused startup development programs in Iowa. Others include the Ag Startup Engine out of Iowa State University and the Rural Ventures Alliance from Iowa MicroLoan. Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at mpatane@clayandmilk.com.
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