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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: I currently have individual health insurance with Covered California and receive a financial subsidy. I will be turning 65 in July 2016. I also have only 31 work credits with Social Security towards premium-free Medicare Part A. Accordingly, as I will not have the requisite 40 credits when I turn 65 this July for premium-free Medicare Part A, can I keep my existent Covered California plan and its financial subsidy?

Answer: No. The law makes no distinction between premium-free and premium-required Part A enrollment, so all persons age 65 and older are supposed to enroll in Medicare. Those with less than the requisite 40 credits for fully insured status must pay the premium for Part A. In 2016, the Part A premium is $411. Part B premiums are a minimum of $122 per month. If you don't sign up for Part B when you're first eligible, you'll have to pay a late enrollment penalty for as long as you have Part B. Your monthly premium for Part B may go up 10% for each full 12-month period that you could have had Part B, but didn't sign up for it.


Question: I estimated my wife's self employed income at 30 k but so far she has only made around 3k. She gets paid sporadically and it is very possible that she will end the year with the estimated income. If she does not, we would become eligible for premium assistance. If I do not report the change now in the hopes of her making that money, will There be some sort of penalty. Right now we are not eligible based on the estimate and have not taken any assistance. Also, is one required to take premium assistance even if one qualifies for it. My wife has her own private health insurance, and I have covered california which, even without assistance, is cheaper than what I had off the exchange. Can I say I do not want premium assistance and skip the hassles of reporting income change ges, proving income, etc. Or would I still be subject to all of that

Answer: If you enrolled through Covered California, you can receive premium assistance retroactively. For example, let's say your estimated you household income (both you and your wife) for the 2016 tax year above the amount that would make you eligible for premium assistance (subsidy). However, at the end of the year your actual income is lower than you estimated (there is no penalty for overestimating your income) and now your actual income makes you eligible for a subsidy. You will get that money as a lump sum tax credit on your 2016 tax return. However, there is a potential snag in your situation. You say, "My wife has her own private health insurance". I take that to mean that your wife has off-exchange health insurance. If that is the case, her portion of the premium assistance will be lost. She has to be enrolled through Covered California in order to be eligible for a subsidy now or later.


Question: I was on Covered California with a subsidy. When I reported to Covered California that I am now pregnant, I was switched to Medi-Cal. I don’t want Medi-Cal because my doctor doesn’t take it. Can I get back on Covered California?

Answer: Your problem is shared by thousands of other California women who reported their pregnancies to Covered California. It was triggered by a recent policy change in Medi-Cal eligibility. Covered California acknowledged the problem, blaming its computer system. That computer glitch will be fixed, but not until September. The computer system was immediately transitioning some low-income pregnant women into Medicaid. Usually, consumers are placed in either Covered California or Medi-Cal based on their income, with no choice in the matter, even though they can enroll in Medi-Cal via the Covered California website. But the rules are different for some pregnant women whose household income falls between 138 percent and 213 percent of the federal poverty level, or roughly $22,100 to $34,100 for a family of two. Under an October policy change, women who are pregnant at the time they apply for health coverage and fall into this income bracket will automatically be placed into Medi-Cal. Women in the income range who already have Covered California plans before they become pregnant are now supposed to be given the choice to remain in their subsidized plans — which have out-of-pocket costs such as co-pays and deductibles — or move to Medi-Cal, which is free. The idea is to allow them to keep their existing Covered California providers if they want. But the Covered California computer system wasn’t programmed to give them the choice, and some pregnant women were moved immediately into Medi-Cal. Covered California has trained its customer service reps to explain to pregnant consumers that reporting a pregnancy could trigger a switch to Medi-Cal. You can get your Covered California plan back, retroactive to the date you reported your pregnancy by calling Covered California’s customer service center at 800-300-1506.


Question: Im on Cov Ca now but my employer just offered all of us employees new coverage. They are going to pay for most of it but its not as good as the coverage from Cov Ca that I have now and it will actually cost me a little more because I have a large subsidy. I was told that if my employer offered me coverage I couldn;t have Cov Ca and that if I kept it it was possible that I might have to pay back some or all of the subsidy that the state gives my family. I'm confused...should I cancel the Cov Ca and get on my company plan? I don't want to have to pay the IRS anything next year.

Answer: Yes. You should cancel your Covered California coverage and sign up for your employer-based coverage. Once you have access to employer-based coverage, you are no longer eligible for a subsidy so you would have to pay back any premium assistance you received after that point.


Question: I had covered California with kaiser for 2014 i cancelled it in Dec of 2014 since beginning jan1 2015 my employer was going to be covering me also through Kaiser. I received a letter from the IRS saying they could not finish my return due to being given an advance tax premium through the exchange. I didn't have covered California at all in 2015 and i received my 1095c from my employer showing me covered for the entire year how do i fix this?

Question: Apparently. the IRS has received an erroneous 1095 from Covered California indicating that you received premium assistance in 2015. You need to respond to the IRS and tell them this. You also must contact Covered California and point out the error.


Question: Can a school district force its classified employees to take out health insurance? If so, can the employee get help from the State of California to pay the premiums? My instructional aide was told that she MUST sign up for health insurance through our district. She is having a hard time living on what is left of her paycheck after all the required deductions. She is a single mother with one child. She works 6 hours per day for 180 days per year. I believe she earns about $13 per hour.

Answer: This employee is eligible for Medi-Cal. Once she has Medi-Cal, she can opt out of her employer-based coverage. The school district must release her from their group coverage since she will have "minimum acceptable coverage" through another source.


Marriage Causes Payback?

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Question: I just got married in december 28 2015, my husband has his own insurance thru his employer, in 2016 i am covered by my husband, why am i being charged in our joint tax filing in 2015?

Answer: You changed your tax status from single to married filing jointly for the 2015 tax year. As a 1-person household, you were eligible for premium assistance based on your income alone. Now your assistance is calculated on a 2-person household (even though your husband has employer-based coverage) and your joint income. You are paying extra tax to recover some or all of the premium assistance for which you are no longer eligible.


Payback Entire Subsidy?

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Question: I haven't filed my taxes yet because when I attempted to do so, I was told that I had underestimated my annual income, which meant that I owe an additional $750. It turns out that I was deemed eligible for Medi-Cal for the entire year of 2015. My caseworker and her supervisor found the mistake. Am I still going to be held accountable for paying back the IRS?

Answer: If your actual 2015 income qualified you for Medi-Cal, you may have to repay a maximum of $300 for any premium assistance you received through Covered California.


Can I Opt Out of the Subsidy?

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Question: Can I opt out of the subsidy even if I qualify now or later? If I did, would I still have to prove income, report changes, etc. Does covered california provide such an option?

Answer: There are a number of ways to apply through Covered California and opt out of premium assistance. (1) The very first question on the Covered California online application is: "Do you want to see if you qualify for free or low-cost Medi-Cal or tax credits with Covered CA?". If you respond "No" to this question, your income will not be considered and you will be ineligible for premium assistance. (2) If you respond "Yes" to this question, you can receive premium assistance if your income drops below the 400% FPL threshold. Most people should take this option, because they retain the option to receive premium assistance should your income drop. If you don't want to deal with having to repay premium assistance, report income changes, provide proof of income etc., here's what I recommend. When applying you can select and Annual Premium Assistance as opposed to the default, "Monthly Premium Assistance". The annual premium assistance option will credit any premium assistance due for the year on your tax return. That way you are not leaving any potential benefits on the table while minimizing income fluctuation reporting hassles.


Unexpected Tax Consequences?

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Question: We are husband and wife with $66,776 AGI. We are covered by Chinese Community health Insurance with monthly premiums of $1,629.79 and have a monthly advance payment premium tax credit totaling to $14,800. Now, this is what we owe the IRS. How are we being helped if at the end of the year we owe the IRS this much. Please help.

Answer: ​With an AGI of $66,776 for a 2-person household, you are not eligible for any premium assistance. That is why you have to repay all the the advance premium tax credits you received for the year. Apparently you claimed a lower income on your Covered California application in the first place. To correct this, you must notify Covered California of your actual income.

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