Third US stimulus check: What happens next with the Covid relief bill

Only after the House passes the Senate version would it land on Biden’s desk.

After that, the turnaround time — between it being a more than 600-page bill and money in people’s pockets — could be relatively quick. People could start seeing the $1,400 stimulus payments hit their bank accounts within days of Biden signing the bill — which is expected to happen soon after the House votes on Tuesday.

For the previous pandemic stimulus bill, the Internal Revenue Service started sending out the second round of payments — that were worth up to $600 — three days after then-President Donald Trump signed that bill in late December. But it’s possible that tax filing season, which is currently underway, could slow down the process this time.

The payments do not go all out at once. Those whose bank information is on file with the IRS would likely get the money first because it would be directly deposited into their accounts. Others may receive paper checks or prepaid debit cards in the mail.

Still, millions of people could be at risk of missing out because the IRS does not know how to reach them. An estimated 8 million eligible people did not get the first stimulus payment, worth up to $1,200, which was approved last year and delivered over the spring and summer. While most people received the money automatically, very low-income people who don’t normally file tax returns may have to take an extra step to register online or file a 2020 tax return.

This time, individuals earning less than $75,000 and couples earning less than $150,000 would receive the full $1,400 payment, plus an additional $1,400 per dependent. But the third round of checks would phase out faster than earlier payments — completely cutting off individuals who earn more than $80,000 a year and married couples earning more than $160,000, regardless of how many children they have. Payments would reach about 90% of families, according to an estimate from the Penn Wharton Budget Model.

Unemployment benefits

As for unemployment benefits, the Senate and House bills differ on the provisions.

If the House approves the Senate’s changes and the bill is signed by Biden in coming days, the jobless may see little or no break in payments. But it depends on their state.

The Senate bill would continue the existing $300 weekly federal boost and two key pandemic unemployment programs through September 6. The House bill would provide a $400 weekly enhancement and continue it and the two pandemic programs through August 29.

The Pandemic Unemployment Assistance program provides benefits to freelancers, gig workers, independent contractors and certain people affected by the pandemic, while the Pandemic Emergency Unemployment Compensation program increases the duration of payments for those in the traditional state unemployment system.

Unlike the relief package Congress approved in December, this legislation should be signed before any laid-off workers run out of benefits, and there are far fewer changes than in the prior bill, said Andrew Stettner, senior fellow at The Century Foundation. Still, some states will wait until the US Department of Labor releases all the necessary guidance to reprogram their systems.

Most states should start sending out the jobless benefits in less than three weeks, he said.

Without an extension of the programs, an estimated 11.4 million would begin to see their benefits start to lapse after next weekend and phase out over the next month, according to The Century Foundation. The $300 enhancement is also set to end next weekend.

When Congress passed the last relief bill extending the unemployment programs, some of the jobless had already started exhausting their pandemic benefits, which were created last March.

Also, lawmakers added the $300 weekly enhancement and made changes to the pandemic programs. And Trump waited to sign the bill until after benefits had lapsed for millions more out-of-work Americans.

Some states were able to enact the new provisions swiftly, but others took more than a month. The delays left the unemployed waiting for $17.6 billion in benefits in January, according to a separate analysis by The Century Foundation.

Child tax credit

Other measures in the package, however, are new or involve larger changes to existing programs — including temporary enhancements to the child tax credit and federal premium subsidies for Affordable Care Act plans, as well as for COBRA policies for laid-off workers who want to keep their employer health insurance coverage.

These would take longer for federal agencies to implement so it could be several weeks, or even months, before Americans receive them.

For instance, families may not see the boost in the child tax credit until the summer.

The House and Senate bills call for increasing the credit to $3,600 for each child younger than 6 and to $3,000 for each child between 6 and 17 in 2021. It is currently a $2,000 credit for kids between the ages of 6 and 16.

The credit would also become fully refundable for the year and may be paid out monthly, rather than as a lump sum at tax time.

Families could receive half their total credit as a periodic payment starting in July and running through the rest of the year, according to the legislation. They could then claim the remaining half on their 2021 tax returns.

Health insurance subsidies

Americans who would qualify for the relief package’s heftier federal premium subsidies for Affordable Care Act policies would need to wait until the new regulations are programmed into the Obamacare exchanges, which might take a few weeks.

Enrollees would pay no more than 8.5% of their income towards coverage, down from nearly 10% now. Also, those earning more than the current cap of 400% of the federal poverty level — about $51,000 for an individual and $104,800 for a family of four in 2021 — would become eligible for help. The provision, which is retroactive to January, would last for two years.

Lower-income enrollees could have their premiums eliminated completely for the same period, and those collecting unemployment benefits could sign up for coverage with no premiums in 2021.

The adjustments to the existing subsidy programs could be done rather quickly, but the provision for the unemployed may take longer to implement since it is new, said Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation.

Once the systems are updated, those who already have Affordable Care Act policies could return to the exchange to see if they now qualify for assistance or larger subsidies. Also, the uninsured have until May 15 to enroll in 2021 coverage on the federal exchange, Healthcare.gov, and have extended sign-up periods in most states that run their own marketplaces. Biden directed the reopening of the federal exchange through an executive order in late January.

Also, the Senate legislation provides a full premium subsidy through the end of September to laid-off workers who want to remain on their employer health insurance plans through COBRA. The House bill would require them to pay 15% of the premium, which could still prove costly.

This provision could take longer to roll out since it’s an entirely new benefit.

Meanwhile, food stamp recipients would continue to get a 15% increase in benefits, but the boost would last through September, instead of expiring at the end of June, under the bills passed by both the Senate and House.