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Covered California Q&A

Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Question: If my employer offers health ins without hospitalization can I still buy into the market place? I have a new job that gives Health Ins with no Hospitalization coverage. They meet the min requirements because they cover preventive care. But the min value part that covers hospitalization is not covered. You can purchase the plan and will not have to pay the penalty for not having insurance because they cover preventive care. But my concern is I will not be able to purchase health care on the market place because I am offered this by my employer.

Answer: Apparently, your employer has a limited-benefit minimum essential coverage (MEC) employer-based health plan - a loophole to avoid penalties for not offering required health insurance - and it protects you the employee from individual mandate penalties. However, you are still eligible for enrollment in Covered California and you may qualify for premium assistance if you meet residence and income guidelines. If you enroll in Covered California, your employer may be fined $3,000.

Question: If employer drops health insurance when can you apply for covered California?

Answer: The law says that you have a 60 days from the date your employer-based coverageends to apply for individual health insurance coverage. In order to avoid a gap in coverage, you can apply for Covered California coverage up to 45 days prior to the date your employer-based coverage ends. For example, if your coverage were to end July 30th, you could apply as early as June 16th for an August 1st effective date.

Insuring My 19 Year-old?

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Question: My daughter is 19, a full time student, and lives at home. Do I have to cover her under my plan at work, or can she apply for covered California on her own? Thank you.

Answer: Yes, you are generally required to cover your dependents with your employer-based coverage. There are alternatives for some people: (1) If your household income is low enough (for example, less than $42,000/year for a two-person household), your children would be eligible for Medi-Cal and she can enroll without considering the availability of group coverage through your work. (2) She can also waive coverage on your group plan and enroll in a Covered California, but that would be without premium assistance. (3) Student health plans are viewed as minimum acceptable coverage by the ACA so that could work too.

Question: My wife recently learned that her employer will be offering coverage for her (50% employer contribution) and spouse coverage with no subsidy. It is a Silver plan and the premiums are going to be higher than if I just stayed with my Bronze plan on the exchange. We do not receive any premium assistance. Am I allowed under ACA to keep my Bronze plan through the Exchange, or do I have to accept the employer-offered spouse coverage Silver plan the my wife's employer?

Answer: It is your responsibility to notify Covered California that your spouse has been offered employer-based health insurance. However, since you are not receiving premium assistance, there is no penalty for not reporting the change. You can remove your wife from your Covered California plan and continue on your own, if that works better for you. Know that you will be ineligible for premium assistance through Covered California, regardless of your household income, as long as your spouse is offered employer-based health insurance.

Question: I Just received a corrected Form 1095-A from Covered California with the result that I received too much subsidy in 2014. What do I do now? Do I have to refile my tax return?

Answer: No. You don’t have to file an amended return for 2014. The IRS says you don’t need to do anything if you already filed your 2014 tax return. Covered California says that this corrected Form 1095-A is “only for your own records”.

Question: My two children are currently on medi-cal, but our income went up and they are no longer be eligible (annual review is pending, but I know they will be dropped). Will this be a triggering event for covered california just for the two of them or for the whole family? I ask because without the entire family enrolling, we don't qualify for premium assistance, so it becomes very expensive just to enroll them now separately. We are a family of 5 and made 92k last year. My husband has covered through work (self employed, but had to enroll himself to be able to get his employees covered), and myself and newborn daughter have private insurance. Thanks!

Answer: Yes. You and your children will be eligible for a Special Enrollment when they loose Medi-Cal coverage due to your income change. Your Covered California share of the net (after subsidy) premium for an adult and 3 children will be about $725 monthly for a Silver Plan. Interestingly, your husband could be added to your Covered California family plan at no additional cost. I suggest he re-examine the rationale behind participating in or even having a employer-based health plan for his business.

Out of Network Coverage?

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Question: I have a Blue Shield of CA Platinum PPO purchased through Covered California. I am confused as to how much I would be responsible for if using a surgeon who is listed as in-network with Blue Shield not purchased through Covered California, but is not listed as in-network for Covered California policies. Would I be responsible for 50% of Blue Shield's contracted amount with the surgeon or 50% of the surgeons non-contracted fee? Also, how is the maximum out-of-pocket work when using in-network and out-of-network providers? I want to have an Anterior Approach total hip replacement, but none of the top surgeons who perform this approach are on my provider list.

Answer: One of our readers, who prefers to remain anonymous, provided the following answer. I believe the information is accurate.

You would be responsible for 50% of Blue Shield's typical contracted fee PLUS anything beyond what Blue Shield allows of the doctor's full bill. This is complicated, so let me explain. When it comes to out of network coverage, the devil is in the details, and the details of Blue Shield's implementation of out of network coverage is hell, where devils belong. Everyone is inevitably surprised by their paltry out of network coverage, because how it works is very obscure.

Blue Shield's policy states that they allow for an out of network doctor what they WOULD HAVE ALLOWED had the doctor been contracted. (This implies that there is just one single fee that they allow all doctors providing a particular service/region- and that is most certainly a fabrication but is another matter.)

Then too, Blue Shield allows its new "Exclusive Provider" network providers much less than it allows its older, full PPO network providers (the network which grandfathered individual plans, and corporate PPO plans, still use). So when Blue Shield says "What we would have paid had the doctor been in network," they mean "in YOUR network, which may be a network that pays doctors very little."

So: If an *in-network* surgeon charges $5,000, since you have Platinum there is no deductible. Let's say Blue Shield only allows $2000 for the surgeon fee. In a platinum plan they would pay 90%, or $1800, and you would pay 10% or $200. The surgeon would be contractually required to write-off (that is, ignore) the remaining $3000 that Blue Shield disallowed.

Out of network, they would allow a surgeon only that same amount - $2000, and would pay just 50% of that $2000, or $1000. You would owe the surgeon your half of the allowed amount, or $1000 - plus another $3000 for the rest of his $5000 bill. (That's the "balance billing" aspect of this.)

Adding insult to injury, what have you paid "out of pocket?" Just $1000, not $4000. Blue Shield - all insurers - ignore anything you pay that is beyond your share of the amount they allow.

FURTHER, if the facility is out of network and you have 1 or more overnight stays the cost is pretty ruinous, because of Blue Shield's extraordinarily stingy allowance for out of network facility charges. They allow no more than $500 per day for out of network hospital charges, and then pay 50% of that - or $250. Since an actual hospital facility can cost thousands of dollars per night, do the math! Stay out of out of network hospitals except for emergencies.

Policies state "out of network, your costs may be higher." That's a very lame warning and it's amazing regulators allow that wording. (Or maybe it's not so amazing - the regulators don't do much in California.) Your costs will not only absolutely be higher, they will absolutely be MASSIVELY higher. All of this is in the Summary of Benefits and Coverage and in the policy documents. I am not making up any of it, but have the Blue Shield plan documents for every word of it.

Question: My income dropped dramatically as a self employed realtor because my husband had a stroke and I became a full time care giver. My father in law took over our paying our monthly premium of $2,000 per month. He is running out of funds to help us out. Can I apply under special circumstances or do I have to wait for open enrollment. My insurance is through the California Association of Realtors group plan.

Answer: Covered California will recognize that your the group health insurance is unaffordable, i.e your monthly cost exceeds 9.5% of your income. Therefore, you are eligible for Covered California individual coverage with premium assistance. However, to enroll outside of the open enrollment period, you will have to claim that your income change occurred within 60 days of applying. Whether your father-in-law pays or not is not relevant your eligibility.

Question: What type of coverage is available if you can no longer pay your Cobra premiums and Covered California will not let you enroll with or without a subsidy because of having Cobra? My husband was laid of at the end of 2014 and accepted Cobra because the first 5 months were affordable at employee rates, but will increase to $2,300 a month which is not affordable (57% of our income). What can we do for the remaining 7 months of the year? There is no way to pay $2,300 a month until open enrollment.

Answer: According to the ACA, if you have COBRA coverage you can enroll in Covered California under the following circumstances: (1) during open enrollment or (2) when your COBRA coverage expires. You missed the open enrollment period and can't afford to pay for COBRA to expiration because your COBRA coverage is unaffordable by any measure at your current income. If you can enroll in Covered California, your net premium after applying the subsidized premium assistance would be less than $400/mo for a Silver Plan (2-person household @ $48k/yr). So how can we make that happen? A significant change of income can trigger a "Special Enrollment Period" giving you 60 days to enroll in Covered California after the income change. Your income change after your husband's layoff was probably more than 60 days ago, but your employer continued to pay a portion of your COBRA premium - a form of income - for 5 months. When your employer stopped funding the premium, you experienced another change of income, significant enough to make your coverage unaffordable. I believe you can be enrolled in Covered California now, but this is a case where you would be wise to use a Certified Agent to submit your application and advocate for you.

Question: I wish to open a health savings account with $5500 from a retirement fund. If I use pretax funds (which are fully tax deductible), must I report this as income to Covered CA, because if I must, then I would most certainly exceed the threshold for a subsidy. My actual question is this: Would I have to repay the entire subsidy for the year or only from the point at which my income exceeded the threshold (that is, December 2015, the month I intend to open the HSA)?

Answer: Your plan won't fly. You can only open a health savings account (HSA) if you have a HSA qualified high-deductible health plan. That would be a Covered California plan labeled "Bronze 60 HSA". If you do not already have such a plan, you will not be able to change for one until 1/1/16. Secondly, if you take a $5,500 withdrawal from a qualified retirement account, the income will be reflected in your AGI and, whether or not you report it to Covered California, the IRS will adjust your tax due to reflect the added income and some of your premium tax credits will have to be repaid. If your AGI is above the subsidy threshold (400% FPL), then you would repay all of the subsidy you received.

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