Covered California and ACA 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 ACA and Covered California knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Recently in Covered California Category

Error Code "000"?

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Question: Got my renewal letter a few days ago. Have been trying to renew on my online account for several days, but when I get to the end to submit, I keep getting error code 000. It's allowing me to verify everything, its just at the end when I hit "submit" I get the error code - Does anyone know what this means?

Answer: Covered California recognized a software glitch causing a "000 error code". They advised to try again later. If you continue to have the same problem, wait until November 15th, when all should be running well.

Cedars Doesn't Take My Insurance?

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Question: My son has a preexiting heart condition. He needs to continue with his cardiologist who as treated him his entire life. What can I do to get coverage that cedars will take?

Answer: You can change plans during the annual open enrollment period. This year it starts November 15th. Your change of coverage will not be effective until January 1 2015. Work with your agent to find coverage that includes Cedars Sinai.

Trouble Uploading File?

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Question: I have submitted numerous documents to covered ca since April2014. This is the second time I am trying to upload and it is saying file type not supported. I have sent it in jpeg,bmp,and tiff all in grayscale. All of my other documents submitted were in jpeg. Online chat said to try another browser. tried google chrome, no go. using internet explorer. the last time this happened, I just kept trying daily till it was excepted. here we go again! the problem is with the website. What a horrible website!

Answer: The preferred format is PDF. The image formats you have been using create much larger files than PDF. Scan and save your documents as PDF files. You should have no further problems.

EPO and HMO Coverage Out-of-State?

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Question: I have to be in another state for half the year but am a resident of CA. What I am seeing is all plans offered in my area for 2015 are going to be either EPO or HMO plans. In the past I had doctors in both states that I used that were in-network. What am I to do now for non emergency coverage when I am out of state?

Answer: You are correct. EPO and HMO plans will only cover emergency medical care in another state. This is only an issue if you are eligible for a subsidy and must buy your coverage through Covered California. Otherwise, there are PPO plans available off-exchange that can provide out-of-network benefits at your second home.

Close Covered California Account?

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Question: I signed up one family member with the incorrect DOB (typo is off by one day). I cannot get it resolved and it is now causing rejected claims and billing problems. DOB can only be changed at CC by an IT tech person. We’ve gone that route twice in the past 5 months and neither the CC account nor the Anthem account is updated. Some insurance sites advise closing the account and starting over. The family member is undergoing diagnostic services and treatment at this time so I do not want them to be without coverage. But having the wrong DOB is like being uninsured as the claims are not being paid. Can any agent please advise on best way to reach a resolution at CC (who will then update Anthem)? Or is canceling and starting over the only way? Thanks for your assistance.

Answer: Expert agent, Max Herr, says: DO NOT CANCEL THE ACCOUNT!! Doing this will terminate coverage and you won’t be able to get it back until January 1, 2015. You should be able to resolve this with a phone call to CoveredCA (800-300-1506). Although you will probably have to wait on hold for an hour or more, it should not take an act of Congress to get a CSR to make the change. Do you have a designated Certified Insurance Agent? If you did, that agent ought to be able to get the change made for you. I’ve been able to get similar changes made without difficulty.

Question: My Husband took out 20,000 from his IRA, I believe it raised our income to 47000 which normally be around 27,600 with half of his SS and my rental income. I did not report this chanage as I am confused on what is Income, if we do not count on that money yearly nor will we have it ever again, how do I calculate or preview plans that are based solely on our 'Income' and not extras, as not to over pay.

Answer: Yes.Based on what you've told me, your taxable income for 2014, will be about $47,000. Since you are collecting a monthly subsidy based on an estimated income of $27,000, your excess subsidy will be about $1,700 for 2014. What that means to you is, your tax bill for 2014 will increase by $1,700. I suggest save up the $1,700 to pay the additional taxes in April, but do not change your income with Covered California. That's because in 2015, your income will return to to about $27,000 and you'll be back on track will a minimum of complications.

Split Coverage and Subsidy?

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Question: If a spouse wants to stay on COBRA while the other spouse applies for Covered California during open enrollment, will the "household income" calculation still apply to both spouses' total income even though the coverage is for one?

Answer: Yes. The combined income of both spouses is used in the subsidy calculation even though only one spouse will require coverage through Covered California. Of course, the subsidy will be less for the one spouse enrolled than it would have been if both enrolled.

Medi-Cal Excess Charges?

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Question: I recently scheduled an appointment with a doctor for a physical. This was a new doctor under Medi-Cal Anthem Blue-Cross that I had never seen before. The doctor had me sign something saying that no matter what my insurance was I had to pay extra to the doctor for whatever the insurance didn't cover. I was surprised they had a medi-cal patient do this as I thought the doctors agreed to accept what medi-cal paid. Now I am afraid to go back as I know I will not be able to pay anything out of my own pocket. Is this even legal? BTW I waited 3 weeks to see the doctor and was given the doctors PA to talk to. Never even saw the doctor at all.

Answer: Since you are enrolled in a Medi-Cal Managed Care Plan through Anthem Blue Cross, you need not worry about the "excess billing" language in the standard Doctor/Patient Agreement. If your doctor orders a test or procedure that is not covered by Medi-Cal, he will tell you in advance. If you feel you have been taken advantage of, you can file a grievance against the physician with Anthem.

Waiting for Medi-Cal?

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Question: I called to cancel my Anthem plan because I lost my job and applied for Medi-Cal. I haven't heard much back from MediCal yet and Anthem is bugging me to pay the premiums. What do I do?

Answer: At this point, Medi-Cal still has a backlog of about 300,000 applications to process. Let's say your application is in that pile. Medi-Cal will cover you retroactively to the date of your application. So if you let your individual policy lapse and have unavoidable medical expenses in the coverage gap, you can eventually be reimbursed for some of the money you had to put out. But it won't be easy.

STILL RECEIVING BILLS?

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Question: WHY AM I NOW RECEIVING BILLS FROM COVERED CALIFORNIA? TODAY IS SEPT. 21ST 2014. I WAS APPROVED JANUARY 2014 AND TURNED 65 MAY 18TH I PAYED MY MONTHLY DUES NOW I AM BEING BILLED FOR SERVICES FROM MARCH 2014. I WAS ON HEALTH NET COVERED CALIFORNIA FOR THREE MONTHS UNTIL I WAS ELIGABLE FOR MEDICARE WHEN 65, NOW I AM GETTING ALL THESE BILLS ADDING TO OVER $1,0000 FROM COVERED CALIFORNIA. I AM SOOO VERY UPSET I COULD SCREAM!!! I HAVE HAD NOTHING BUT PROBLEMS FROM THE COVERED CALIFORNIA PLAN RIGHT FROM THE BEGINNING WHEN TRYING TO SIGN UP.. PLEASE-PLEASE HELP ME. THERE IS NO WAY I CAN AFFORD TO PAY THIS BILL!!!!!! THANK-YOU, DIANE

Answer: Diane, your caps lock key is stuck. Health Net needs to know you are now on Medicare. Call them and tell them. The number is on your insurance card. You will not have to pay premiums after May 1st.

Individual vs Agency Rights?

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Question: This question comes up quite a bit especially when there are several agents working under an agency, Can a certified covered ca agent write business under another certified agent log on, using their id and password and pin? Is is ok for the entity business owner to demand an agent to write under to log in so commission's are paid to the Entity? What liable affect can this have on the agent who is write's under the other agent? Especially when all agents signed a contract direct with coveredca?

Answer: If your employer has any sense at all, she told you before you accepted the job that you would not be paid commissions directly from the insurers, but according to some internal compensation plan for your agency. The issue of logging into another agent's Covered California account is not against any Covered California rules that I know of so in my opinion it can be done until someone tests it formally or perhaps legally. The contract you signed with Covered California is not a factor unless you enroll CC applicants through your own broker account.

Estimating Income for Part of a Year?

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Question: Currently enrolled in CoveredCA with a subsidy. When I turn 65 in August of 2015 I will change my plan to medicare, will my subsidy for the first 7 months of 2015 be calculated on my income from Jan 1 - Aug 31 of 2015 of will my subsidy for the first 7 months of 2015 be calculated on my income for the entire year of 2015?

Answer: This seems tricky, but it's not. Your subsidy for the first 7 months of 2015, should be based on your estimated monthly income from Jan 1 to Aug 31 of 2015. The Covered California application software will convert this monthly average to an annual income number from which your subsidy is computed. This may seem to overestimate your subsidy eligibility, but since you will only drawing 8 months of the subsidy before moving to Medicare, you will not be drawing too much, or more importantly, leading to any unpleasant surprises on your tax return.

Question: What can agents who are dissatisfied with Covered California service do to be heard by the people who run the agency?

Answer: Max Her replies, "If you, like I, are dissatisfied with the performance of CoveredCA, the Call Center (FOUR hours on hold today pursuant to the notification that four of my clients' documents were not in order and that they are in jeopardy of losing their coverage -- none of which is accurate), $58 payments for Medi-Cal enrollments that have never materialized, and so on, please email me (max.herr@verizon.net) with your complaints and concerns."

"I have decided to fly to Sacramento for the September 18 CoveredCA Board Meeting and will try to find a way to air our grievances with the Board in public session. We are, I believe, not being given the credit we deserve for effecting a significant percentage of both Medi-Cal and QHP enrollments for 2014, nor are we being asked for our input on how to make the system more efficient and accountable, and I believe it's high time to hold Peter V. Lee and the Board accountable to us for a change."

I look forward to hearing from you. I will print your emails and deliver them personally to the Board at the meeting. Ideally, it will be a large stack of paper.

Question: I currently have my children covered under my employers group plan. Our group plan open enrollment is now. I have been told that if I add my children now, I can't remove them on 1/1/15 to go to individual plans. Is individual open enrollment a qualifying event?

Answer: Once enrolled in a group plan your cannot voluntarily drop your coverage without a qualifying event but you can drop coverage for your dependents anytime, no qualifying event required. There is no need to wait for open enrollment. Your children are not eligible for premium assistance (subsidy) because they are offered group coverage through your employer. You can purchase off-exchange individual coverage for them, or they may be eligible for Medi-Cal.

Rate Change for All on Jan 1st?

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Question: If a person signed up for a September 1st start date because of a special enrollment period due to loss of group coverage. Will their rate change on Jan 1st,2015?

Answer: Yes. All ACA-compliant individual health insurance plans change rates annually on January 1st.

Chargeback for Medi-Cal?

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Question: I have a friend who applied thru Covered CA using her current income which put her into Medi-Cal...but she also received some alimony payments earlier in 2014 which she did not account for. She expects her 2014 MAGI to be about $30,000 which is too high for Medi-Cal. Medi-Cal won't release her back to Covered CA to choose a subsidize plan unless her current income changes. Is it a problem that when she does her taxes, her AGI will be too high for her to qualify for Medi-CAL?

Answer: No. There is no chargeback, nor any other tax consequences, for one who is insured by Medi-Cal and subsequently reports income in excess of the Medi-Cal MAGI (modified adjusted gross income) benchmark. During the next open enrollment period, your friend should re-apply through Covered California and adjust her income to include the alimony income.

Question: My sons ages 12 and 16 are enrolled in Medi-Cal because of my income. Their primary care doctor will no longer treat them while they are on Medi-Cal, and I can’t find one who will take him. What can I do?

Answer: It was bad before the ACA (2011-2013), with only about 60% of the California primary care doctors accepting new Medi-Cal patients. It has gotten much worse this year as the ACA added over 1 million new cases to the Medi-Cal roles. However, the distribution of Medi-Cal visits among California physicians is highly skewed. About one-third (35%) of physicians accounted for 80% of Medi-Cal visits. Emergency doctors and others who work primarily in hospitals had the highest rate of Medi-Cal participation (82%). Physicians at community health centers and public clinics had the highest rate of Medi-Cal participation (92%), and those in solo practice had the lowest (54%). You may have better luck finding a doctor for your sons in a large multi-doctor practice or community health center.

Reporting a Change?

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Question: If after I completed my application and my QHP has been effectuated, I now need to change an incorrect birth date. Do I make that change through Covered California or through the QHP. If Covered California what is the process?

Answer: To change a date-of-birth go to Covered California not the carrier. Login into your CC account and make the change yourself, have your broker do it, or call CC at 800-300-1506.

Employer Offers No-cost Plan?

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Question: Employer is offering what is exactly like the lowest cost bronze plan on covered CA and it would not cost me anything out of my monthly salary. In fact, they said that I would even get an extra 1300.00 at the end of the year from them. However, I have type 2 diabetes and would be paying 100% of lab and drs visits before the $5,000 deductible is met. I am in the 138% of poverty range and am not able to do this. unfortunately if I turn it down I cannot get any help from subsides because of their offer being considered affordable. Any ideas?

Answer: Sorry, I have nothing. You cannot get any help from subsides because your employers group coverage offer is considered "affordable". You have to accept the company plan. However, the $1,300 you receive at the end of the year will go a long way in covering your out-of-pocket expenses for doctor visits and labs.

Health Insurance Tax Deduction?

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Question: Can I claim self-employed health insurance deduction (1040, line 29), if now part of my premiums are subsidized by Obamacare? If yes, what will happen after IRS reconciles the advance premium tax credits (subsidy) for 2014 and withholds certain amount, because my income is more than I projected? Will I be able to claim that I paid this extra amount as health insurance premiums and add it to 2014 deduction?

Answer: You can only claim the net premium - the portion you actually pay after the subsidy - as an expense. Enter that portion as your self-employed health-insurance deduction. If there is a subsidy reduction for added income at the end of the year, that incremental net premium would also be added to your self-employed health-insurance deduction.

Former Employer Won't Drop Me?

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Question: Hi, my ex employer refuses to drop me from his group health insurance policy. i dont understand why he is doing this but it's barring me from getting my own independent coverage from the same provider. Should i just try to find a different provider or is there something I can do?

Answer: Your former employer is breaking his contract with the insurance company that underwrites his company health plan. Group coverage is only for employees currently on the payroll. You can put a stop to it by calling the insurance carrier's customer service department and explaining what he is doing. In the meantime, buy coverage from another carrier if the value proposition is similar.

Mid-Year Income Change?

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Question: I estimated my income to be $24,000 for 2014 at the beginning of the year. As months are going by I am now estimmating it at $60,000. Should I make that change on my profile or wait?

Answer: That's a pretty significant change of income. It makes a big difference to your bottom line. If you are a single person, you're net premium now is about $150/mo at $24K annual income. At $60k, you are no longer eligible for a subsidy, so you pay the full premium based on your age and zip code - anywhere from $200 to $800 a month. If you don't bite the bullet now and pay the higher premium, you'll pay the difference in a lump on April 15, 2015 tax time.

Question: After enrolling in Brnoze plan on 3/14/2014, my income dropped down much in 8/14/2014. 1)What proof of income like Bank statement for that month to be submitted? 2)Only silver plan is to be selected for cost sharing? 3)Suppose after 90 days if proof of income could not be shown what happens.? Will the new revised plan be cancelled or will it continue but without subsidy?

Answer: Your change of income can be verified in a number of different ways depending on whether you are an W2 employee or self employed. Covered California can help you with that if you call 800-300-1506. Yes, only the silver plans qualify for cost-sharing reductions. If proof of income to support the change is not supplied within 90 days, the new plan will continue without subsidy and cost-sharing reductions.

Question: Does "ca covered" offer dental for adults? I have kaiser if it makes a difference.

Answer: Adult dental coverage cannot be purchased during the Covered California enrollment process nor as an add-on later. You can purchase your adult dental coverage directly from your current carrier (Kaiser) or from a wide selection of other stand-alone dental insurers. Click here for a quote and online application.

Two Residences?

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Question: Adult lives approx. half the year in California and the other half in North Carolina. Currently has coverage in California but needs to see doctors in North Caroline as well while there. Do you have coverage for this?


Answer: You could qualify for a special enrollment period in North Carolina if you claim NC as your home address. If so, select Blue Cross Blue Shield of NC PPO coverage (once you confirm that they offer Blue Card coverage outside of NC). You will be covered by in-network benefits while in California as long as you see a Blue Shield of California PPO network provider. If you want California based coverage, select Blue Shield of California PPO (only Blue Card in CA) coverage effective 1/1/15 during the next open enrollment period starting November 15th.

Question: My family is losing COBRA coverage on 9/16 (expired). Anthem, Blue Shield, and HealthNet and Cigna all will only give a 10/1 effective date. Will anyone give a 9/17 effective date to avoid a gap in coverage?

Answer: No help from the carriers on this loophole. Right now the consumer with expiring COBRA coverage may have to wait up to 30 days for the ACA compliant coverage to kick in. Eventually the feds will get it ironed out. In the meantime there's short-term coverage perhaps?

Report Income Change?

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Question: I estimated my 2014 income to be about $35,000. My 2013 income was $33,070. Due to a lay off of one of my jobs, it looks like I will make about $30,00 for 2014 if I don't find another part time job. I am being subsidized from the state for my Anthem Blue cross. If I don't make the money I estimated on, will I get a refund from the California Exchange if I don't have an adjustment made now? Or do they apply it to the next years premiums? (still looking for another part time job)

Answer: The IRS will reconcile the advance premium tax credits (subsidy) you have received for the year on your 2014 tax return. In your case, there is no need to report a change in income at this point as the difference between estimated income and actual income is not very great. In cases where the taxpayer's income increases greatly during the year, reporting the change to Covered California will prevent a big tax bill come tax time. If income decreases significantly, reporting the change immediately may greatly reduce your net premium for the rest of the year.

Question: Retired couple on Covered CA has husband turning 65. Husband is the only income in the household and they are APTC eligible. Now that husband is going to be eligible for Medicare and ineligible for Covered CA how is the income counted for the wife in Covered CA. Will his income be used to determine what her premiums will be in Covered CA? Will she now be eligible for Magi Medical since she has no income? Thanks

Answer: The husband's income is still counted even though he will not be enrolled in Covered California. Since the premium assistance (subsidy) is based on a 2-person household, the wife in this scenario will continue to pay less net premium they were paying as a couple.

Question: I know the 2013 Federal Poverty Level rates were used to determine the premium tax credit subsidy. However, when it comes to reconciliation at tax time will the 2013 or 2014 Federal Poverty Level rates apply? This could make a big difference if a single persons MAGI is $46,500 for the 2014 tax year. Which one? 400% of the FPL for 2013 is $45,960 (No subsidy) or 400% of the FPL for 2014 is $46,680 (Subsidy).

Answer: The IRS will use the 2013 FPL standard to reconcile 2014 MAGI and advance premium tax credits (subsidies). See Fred's comment below for more detail.

2015 Auto Renewal?

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On Thursday, HHS announced that most U.S. residents who have health coverage through HealthCare.gov could automatically be enrolled in their existing plan next year, cutting the need to fill out a new coverage application form through the website, the New York Times reports (Pear, New York Times, 6/26).

About 95% of current exchange enrollees could qualify for automatic re-enrollment if they do not change their coverage plans proactively (Radnofsky, Wall Street Journal, 6/26).

While the automatic re-enrollment feature is designed for the federal health insurance exchange, it also could apply to state-run insurance exchanges, officials said. State officials will also have the option to submit an alternative renewal proposal (O’Donnell, USA Today, 6/26).

While the proposed re-enrollment process would be automatic, consumers would be urged to re-evaluate their coverage benefits and needs during the next open enrollment period (HHS release, 6/26). In addition, enrollees would receive information about how to move forward if their incomes or other life circumstances have changed, which could affect their eligibility for future tax credits.

According to Modern Healthcare, HHS drafted the proposed rule with input from the National Association of Insurance Commissioners and other stakeholders. The rule is open for public comment for 30 days, after which HHS will issue a final rule (Demko, Modern Healthcare, 6/26).

2015 Covered Ca Rates?

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Question: There’s confusing talk about how much Covered California will increase for the 2015 year. When will the new rates be published.

Answer: Rates will be public in early August. As of June 1st, Covered California has been receiving submissions from the insurers in the exchange. An evaluation process will follow, and then a negotiation process through the month of July. Peter Lee announced at the June board meeting that Ca rates will be public “first week in August”.

Question: My Medi-cal was terminated 5.28.14 with no explanation or warning. My pharmacist informed me. After several phone calls, everyone agrees I should have no been terminated but they have no advice (CA Calif. and Medi-cal reps). No one would escalate my call. I reapplied to CA Covered and they will recommend Medi-cal. Meanwhile I am without coverage of any kind. Is the re-instated insurance retroactive is there some protection from termination that was not my fault. The law 14005.37 states that I should have been notified and received a chance to advocate for myself. I have heard nothing. What recourse do I have. Aren't they effectively ignoring the law?


Answer: You'll have to file for a hearing. You have 90 days from the date of the termination letter to request a state hearing. The form for that is on the back side of the termination notice or you can do it by phone. When you file you will receive "aid paid pending" meaning that your benefits will be reinstated pending the outcome of a hearing. When your Medi-Cal coverage is reinstated, coverage will be retroactive to the cancellation date. In the end, you shouldn't be out anything but the massive headache of getting your case back on the tracks.

Non-Resident Child Covered?

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Question: I am the non-custodial father of a child who lives outside the country in Australia. Court orders require me to add her to my health insurance as a dependent for occasions when she visits me in the U.S. (California). Can she be covered under my policy? I was told no because she is not a full-time resident of California. What can I do?

Answer If your daughter is visiting you for a few weeks, international travel insurance will do the trick. If your daughter will be living with you for an extended period of time, you can add her to your health insurance coverage. Your daughter is eligible for a special enrollment once she resides in California. The is no minimum stay required. What might have confused you otherwise is the rule that people who reside outside the US more that 6 months per year are exempt from mandated coverage and penalties.

Question: I am currently pregnant and I don't know how the process works for getting my newborn health coverage. I also have a one and a half year old who is covered under Medi-Cal. Please help!

Answer: As soon as possible after your child is born, notify Covered California to add your newborn to your account. The newborn is covered under the mother's CC coverage during the first month after birth. You say you already have a child on Medi-Cal. If this is because your household income (less than 250% of FPL) makes all of your children under 19 eligible for Medi-Cal, your newborn will be covered by Medi-Cal retroactive to his or her date of birth.

Subsidy Change?

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Question: I qualified for a Covered Cal subsidy based on my estimated 2013 income. Due to higher than estimated investment income my tax filed 2013 income exceeded the subsidy qualification limit. However, my 2014 income will be considerably lower and under the subsidy qualification limit. Do I need to stop the subsidy due to the filed 2013 income?

Answer: No. Your 2013 income is not a factor at this point. If you still expect your 2014 income to be reasonably close to the estimate you used on your application, there is no need to make any changes now. Remember, your advanced tax credits (subsidy) will be reconciled with your actual tax due when you file your tax return for 2014.

Medi-Cal Ineligible?

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Question: I'm a 31 yr old single mother. My 3 month old is eligible for Medi-Cal until he is 1. My 12 yr old is ineligible because of my income, yet I can't enroll him on Covered CA. I'm making $39,000 a year. What can I do?

Answer: If your household is made up of 3 or more individuals and your income is less than $52k, then all of your children age 18 or less are eligible for Medi-Cal. Medi-Cal enrollment is open throughout the year. You may enroll through Covered California at 800-300-1506.

Question: We were approved for Covered California but I chose the wrong health insurance plan. It has not yet take effect (it takes effect in 5 days). Can I change the health plan, or should I terminate Covered California and start over again? Thank you!

Answer Don't terminate your current coverage. Open enrollment for 2014 has ended. You cannot change your plan unless you have a qualifying event which makes you eligible for a special enrollment period. Making the wrong plan selection is not a qualifying event. However, if you can make the case that you made the wrong choice "as a result of an error, misrepresentation, or inaction by an insurer or agent", then Covered California may grant you an exception.

Question: When open enrollment starts Nov. 15, 2014, can I get off covered CA and look for my own private plans or do I have to stay on the plan I am on now for a full year?

Answer: When you apply for another plan during the next open enrollment period starting next November 15, your new coverage will start January 1, 2015 at the earliest. You do not have to keep your present plan for a full year.

Catastrophic Plans

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Question: I have a client who is eligible under the federal guidelines for a catastrophic plan. He was recently approved by the federal marketplace and has the paperwork to prove it. To date, I have not discovered the mechanism to offer him anything other than the Bronze plan, either off or on- exchange. Is there now a streamlined process now by which I can help them enroll in a catastrophic plan?

Answer: If the applicant is eligible for a catastrophic clan because of age (19-30), then the catastrophic plan will show an an option in the enrollment section of the online Covered California application. However, since catastrophic plan are unsubsidized, you can go directly to the carrier's online application. If the client is eligible for a catastrophic plan but 30 or over, I don't know of any online mechanism on or off the exchange to get the app started. You can submit a paper application to the carrier with your eligibility documentation.

How to Verify Income?

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Question: I was told to verify my income for the covered california insurance plan. How do I do that?

Answer: You can upload documents from within your Covered California account, but few people seem to be able to do that so I have stopped providing directions. Instead, call Covered california at 800-300-1506 and talk to a customer service rep. He or she will tell you how to submit the relevant documents for your situation.

Question: My family of four has a Covered CA plan, which we purchased when both my husband and I were unemployed. I am listed as the subscriber. I recently began work and have employer coverage beginning June 1. If I terminate the entire CC plan will that act as a qualifying event to get off-exchange coverage for my family? I don't want them covered on my employer plan due to cost.

Answer: Once you and your family have been offered employer-based coverage, you are no longer eligible for premium assistance in Covered California. You are obligated to contact Covered California and change your status. You may opt out your family from your employer coverage, but they will only be eligible for unsubsidized individual coverage.

Question: About a week prior to the deadline they gave me for my conditional 90-day acceptance, I mailed Covered California a monthly bank statement with the preface form they asked me to return, but I am not sure how/if this will truly prove my eventual 2014 income. What will happen if they still think this is not proof? Will they end my coverage completely, or give me another chance to help them determine what they need and re-establish my policy after a lapse?

Answer: No. Your coverage will not be ended. If your income verification is not acceptable, your premium assistance will be recalculated based on the best information available.

Question: I am currently enrolled in covered california, MediCal, for 2014. I have been job hunting for a while, and I believe that I may be getting a job soon that pays above 138% of the poverty line (the limit for covered california). If I get this job, will I be required to drop MediCal immediately? By the end of the year? Within a certain number of months? Thank you.

Answer: Yes. it is your responsibility to notify Medi-Cal of your change in income. You will no longer be eligible for Medi-Cal once your household income exceeds 138% FPL. However, if your new household income is between 139% and 400% of FPL, you will be eligible for premium assistance and perhaps cost sharing reductions through Covered California.

Question: Has Covered California officially decided to implement the Special Enrollment Period through July 1, 2014, whereby the Feds allow folks who currently are under COBRA to switch to ACA Marketplace health insurance plans?

Answer Yes. Covered california adopted the COBRA SEP guidelines regarding SEP exceptions for COBRA beneficiaries on May 15. The SEP enrollment period in California will extend to July 15, 2014.

COBRA SEP in CA?

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Question: Is the COBRA SEP adopted by CA the same as the feds?

Answer: No. The COBRA SEP in CA extends from May 15 to July 15 (SEP in fed exchanges ends July 1st)So people currently enrolled in COBRA coverage have until July 15 to apply for coverage through Covered California or off-exchange in a ACA compliant plan.

Question: I currently qualify for premium assistance, falling just under the income limit for our 4-person household. My son expects to attain a full-time job with employer benefits in August. Will this reduce the income level to 3-person, meaning no premium assistance? If so, would it be effective in August or retroactive to Jan 1?

Answer: You are committed to notifying Covered California when your son's coverage starts, so you will stop getting advance premium tax credits at that point - not retroactively. It remains to be seen whether the IRS system has the sophistication necessary to reconcile the annual tax credit to reflect the midyear change like this.

Question: What will happen if I have not sent proof of income and request for social security validation by stated deadline, for my 90-day conditional acceptance?

Answer: Your eligibility for premium assistance and enhanced benefits could be withdrawn.

Premium Locked For How Long?

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Question: If I purchased a Covered California health insurance plan for my family that was effective on May 1, 2014, will my premium stay "locked" at this level until May 1, 2015? That is traditionally how my health plans have operated in the past...with 1 Year Guarantees.

Answer: No. The rates for individual health insurance purchased in 2014 will change on January 1, 2015.

Question: I just got a rate increase on my grandfathered individual plan. It going up 24% effective July 1st. Can I still buy an Obamacare plan?

Answer: Yes. This is a qualifying event for a Special Enrollment Period (SEP). According to Covered California, “You have a health insurance plan outside of Covered California, and your renewal date is not between Nov. 15, 2014, and Feb. 15, 2015, or future open enrollment dates and you would like to switch to a Covered California health insurance plan instead of renewing your current plan.” Here’s how it will work: You can apply for coverage either through Covered California or directly with the insurer of your choice when your non-calendar-year individual plan renews. You can report to your insurer that you will not renew their plan up to 60 days before the renewal date. Your current carrier must provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014 to select and ACA-compliant individual plan. If you choose to enroll through Covered California, you will have up to 60-days from the renewal date to select a plan in the exchange. Reference: https://www.coveredca.com/coverage-basics/special-enrollment/qualifying-life-events/

SEP for COBRA Enrollees?

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Question: I got on COBRA when I lost my job last month because my former employer pushed me to do it. I didn’t look into Obamacare because I thought it was over. Can I still switch to a Covered California plan?

Answer: Probably, but not for sure yet. The Department of Health and Human Services is concerned that people newly-eligible for COBRA, as well as COBRA beneficiaries, may have had insufficient information to understand they only can enroll in the exchange during an open enrollment period, when initially eligible for COBRA or when COBRA coverage expires. So HHS is providing an additional special enrollment period based on exceptional circumstances so that persons eligible for COBRA and COBRA beneficiaries are able to select QHPs in the exchange. Affected individuals have through July 1, 2014, to select QHPs in the exchange. This is for federal exchanges. At this point, Covered California has not decided whether they will follow the recent CMS regs. Reference: http://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/SEP-and-hardship-FAQ-5-1-2014.pdf

Changing Doctors?

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Question: I live in Amador County and my only 2 options thru Covered CA were Anthem PPO or Blue Shield EPO. The doctors/imaging specialists I saw all last year were in network with my Blue Shield PPO. Despite telling me they would take the EPO, turns out they don't and they don't accept Anthem. Can I get a PO Box in Sacramento and use that as my (mailing) address so I can have the option of getting the Blue Shield PPO next time around? Or do you know of any other way around such a dilema?

Answer: Putting aside the fact that you would be breaking the rules, using a Sacramento mailing address to enroll on a Blue Shield PPO will not accomplish what you want. The "old" Blue Shield PPO network that was available in Amador County is not the same as the "new" PPO network available in Sacramento county.

I have no doubt that this will touch a nerve with some of my readers and I invite you to comment to this post with your opinions, but I wonder if keeping the same doctor and imaging facility you used last year is of such great value. Obviously, using a different imaging facility is no problem at all but what about the doctor? How much does he know about you that could not be passed on to another equally competent doctor? Seriously, what's the big deal?

Find Family Doc?

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Question: I need family doc for my plan - Anthem Blue Cross Silver PPO

Answer: To view a list of doctors that are in-network for your Anthem individual plan, go to:
https://www.anthem.com/health-insurance/provider-directory/searchcriteria?qs=*U+6hK7rK6dMu/ioZcqYOcg==&brand=abc
(Note: Copy and paste this link exactly as it listed here and paste it into the address bar of your internet browser. Other links will take you to a page that looks the same but is not.)
2a. Leave "Name" field blank
2b. Leave "Specialty" field set to "Family/General Practice, Internal Med"
3. Enter your city or zip code
4a. Enter state "California"
4b. Select the network called "Pathway X - PPO / Individual via Exchange"
4c. Select Plan "Anthem Blue Cross Silver DirectAccess"

Qualifying Events?

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Question: Back in December, I applied for an off-exchange Blue Shield plan because our household income was well over the income range for subsidies. But now we definitely are eligible for a subsidy, because my husband just lost his job a few days ago. Can I still apply through Covered California.

Answer: Yes. A change of income that affects your eligibility for a subsidy is considered a qualifying event that make you eligible for a special enrollment period of 60 days from the date of the change - in this case his employment termination date. Here is a list of other qualifying events:

  • Getting married
  • Gaining a dependent or becoming a dependent through marriage, birth, adoption, or placement for adoption
  • Permanently moving to a new area that has different health plan options
  • Losing other healthcare coverage that is considered minimum essential coverage.
  • A change in income that would affect an enrollee’s eligibility for financial assistance
  • Becoming a U.S. citizen
  • As a result of an error, misrepresentation, or inaction by a QHP or agent

How to Pay Kaiser?

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Question: We were told to pay kaiser but whe we went to pay they needed a number for the account we didn't know it how do we pay the payment.

Anawer: If you have not received an invoice by mail within 15 working days of your application, you can call Kaiser Member Services at either of these phone numbers: 800-464-4000 or 800-290-5000.


CoveredCA HSA Qualified Plan?

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Question: I signed up for an Anthem Bronze PPO plan in December. Although it is not designated as a HSA plan, it fits the IRS definition of an HDHP, i.e. it is $5,000/$10,000 deductible, out of pocket limits $6,350/12,700. I already have an HSA account set up from my prior insurance and I would like to continue to fund this for my expenses this year. Why would Anthem/CoveredCA not list this as an HSA compatible policy and would I be breaking any rules to claim my HSA contributions on my taxes next year?

Answer: Only one plan in the individual market is designated as an HSA qualified plan, the Bronze HSA Plan. Apparently, you bought the other Bronze plan. You can try calling Covered California at 800-300-1506 to see if they will accomodate you with a plan change.

Question: My Mom has been receiving health care under Covered California since January 1st. She can no longer afford the home she is in and must sell to continue to live. From the sale she will make some money which she will need to live. Will this be considered income even though this will be a one time occurance? If this is so, then she will become disqualified for assistance. Am I correct?

Answer: Any profit above $250,000 will go into her adjusted gross income for the 2014 tax year. (Your mom can exclude from tax up to $250,000 in profit from the sale of her primary residence or $500,000 if she's married as long as she has owned and lived in the home for a minimum of two years.) So selling the home will have no effect at all. If the sale of the home raises her AGI, the advance tax credits she has received to help pay her 2014 health insurance premiums will be reconciled by the IRS when she files her 2014 tax return. Any undue advance tax credits will be added to her 2014 taxes due. This should not be a problem for your mom since she will have the cash from the sale of the home to take care of the additional taxes if there are any. She is not "disqualified" for health insurance premium assistance and she will continue to be eligible for subsidized coverage or Medi-Cal the following year based on her 2015 income.

Employer Coverage Over 9.5%?

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Question: How do I go to Covered Ca if my share of employer sponsored insurance is greater than 9.5% and receive the advance tax credits?

Answer: Complete a Covered California application online before April 15th. When you get to the Health Care Information section and this question, "Does this person have or has this person been offered affordable minimum standard value health insurance for 2014?", answer "None of the Above".

Medi-Cal Application Lost?

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Question: My wife and I have been covered on a Blue Shield Obamacare plan since January 1st. Our two kids are supposed to be on Medi-Cal but we haven’t gotten anything from them yet. We called the county office, but they are no help at all. Should we apply again before the deadline on April 15th?

Answer: No. I recommend against applying again. It could really mess things up for you at this point. Your children’s MediCal application is probably not lost. About 800,000 people who applied for Medi-Cal coverage through Covered California still are awaiting approval because of software glitches. State officials say the backlog of Medi-Cal applications was caused by problems with a system that was supposed to link county and state computers to confirm applicants’ eligibility for the program. Even though the glitches have been fixed, workers at the county social services offices face a large backlog of applications. Unfortunately, if your Medi-Cal applications are awaiting approval you could be foregoing needed medical care for your children or paying out-of-pocket for health care services. You do have the option of requesting a temporary Medi-Cal card from county services but some MediCal providers might not accept them because of concerns about whether they will be reimbursed for the care.

Change EPO to PPO?

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Question: I currently have Anthem Blue Cross (Silver Plan) EPO and it's come to my attention that my regular doctors only accept PPO. I can use the EPO except the service would be considered out-of-network. Do I need to wait until the next open enrollment cycle before I can change to a PPO? And, when would this be?

Answer: You must make your plan change by April 15th, or wait until the next open enrollment period starting in November. Be sure to research the carrier provider networks for your doctor(s) before you change. Anthem Blue Cross does not offer both EPO and PPO plans in the same geographic area. You would have to select another carrier with a PPO available where you live.

Still Covered After 90 Days?

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Question: I received the conditional 90 day coverage from Blue Shield, through CC. I needed to verify my income, but was not able to pull together any of the required documents in time. I have been working as an independent contractor in this past year (for the first time ever) and am definitely on a learning curve for documentation. I have been billed (by Blue Shield) for the month of April, so I went ahead and paid it, but I am not sure if I am still covered from CC's point of view. I tried calling CC a number of times before the March 31st deadline to try to resolve the matter but was never able to reach anyone. As luck would have it, I have need to see a doctor now, due to injuries from a fall, but I am reluctant to proceed, for fear I will find myself without coverage and facing exorbitant bills which I cannot afford. Is there a grace period or a next step when the provisional coverage period ends?

Answer: Yes. You are still covered. Neither Covered California nor Blue Shield will cancel your coverage for failing to comply with a request for income verification. At worst, CC could take away your premium assistance, but that would not happen until you have been given additional opportunities to comply. For starters, they have to start providing adequate customer service before they can hold you to your reporting obligations. Wait until you can get through to 800-300-1506 and ask the Customer Service Rep for assistance in providing the necessary documentation.

How to Cancel CC Coverage?

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Question: I have enrolled and been conditionally accepted for 90 days and I have signed up and paid for a health plan. Now I am thinking of cancelling the plan and get out of the Covered Cal exchange altogether. How do I do that, and if I do, when will my current account with the insurance company end?

Answer: If you applied on your own, log into your CC account and select "Terminate Coverage". You can cancel your coverage as soon as 14 days from that date. If an agent signed you up, ask him or her to do it for you.

Is Employer Coverage Verified?

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Question: How does Covered CA obtain information from individuals who have affordable employer coverage and submit application for coverage through exchange.

Answer: There is no requirement for employers to supply information about their employees' health care coverage, at least for the 2014 tax year. Nor have I seen any verification requests from Covered California to applicants.

Wait Two Weeks to Reapply?

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Question: I had already applied and got a plan and payed, but my payment was not accepted. I had to terminate and wait 14 days to apply again, but this will take me past the march 31st deadline. Any advice? Can't get a hold of customer service.

Answer: After terminating your current coverage at least 14 days from that day, you can choose a new plan immediately using the same application. You do not have to wait 2 weeks to reapply. I think that misinformation may have originated in our Q&A comments section, but that person was wrong.

Question: I signed up for anthem ppo & paid for it on March 25 (which at that time appeared to be the deadline), then found out that my doctor has just been added as a provider on the blue shield epo. I am in the midst of some complex treatment issues and will be forced to pay out of pocket to see my current doctor about these matters (forced to put these payments on credit card because I am currently out on disability leave from my job). Is there a way to switch from Anthem to Blue Shield?

Answer: Yes. You can terminate your Anthem Plan effective April 30th and choose the Blue Shield plan you want effective May 1st. This is a quirky process in the Covered California online application system. I suggest you delegate a Certified Insurance Agent to help you with it.

Temporary Job and Subsidy?

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Question: I was unemployed and getting a generous subsidy through CoveredCA for my health insurance. I recently landed a 6 month assignment that pays just enough to have my subsidy taken away. I really can't afford the insurance on its own. Is there anyway to average out what ill make these 6 months for the year so I can still have a subsidy? My plan went form 59 a month to 263 a month because I took a 6 month temp job.

Answer: You could do nothing at all and save up for a larger than normal tax bill in April 2015. You could also change your Covered California account to reflect your new income from your temporary job by taking the total income for the 6-month job and dividing it by 12 if that would still make you eligible for premium assistance.

Special Open Enrollment

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Question: If a person is enrolled in an individual health insurance plan (not employer sponsored) outside the exchange and currently does not qualify for any subsidies because his or her income is above the threshold; what happens if he or she loses their job, becomes unemployed and now qualifies for subsidies, would this person be able to join Covered CA under the special enrollment rule and be eligible for advance tax credits?

Answer: Since your individual coverage is independent of your employment, losing your job will not trigger a Special Enrollment Period. If you were to apply for coverage through Covered California during open enrollment - by March 31st - even though your income makes you ineligible for premium assistance now, you could be eligible if you do lose your job later in the year.

Untaxed Disability Income?

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Question: I retired as a Police Officer due to an industrial disability. The money I receive monthly is tax exempt(Fed and State)except for a small portion (190.00 a year currently) and that amount is my AGI for taxes. What amount do I enter as income? AGI per taxes or the monthly amount that is protected?

Answer: Use your AGI of $190. You are eligible for Medi-Cal.

Mixed Immigration Status?

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Question: Husband stays in CA with a valid working visa. Wife and a child currently live in outside of the US and do not hold any valid US visa. They are going to come to the US with valid visa later this year. Can the husband apply for CoveredCA at this time? If so, should he apply as "single" or "married"? Should the income be calculated as 1 household or family of 3

Answer: The husband should apply as a 1-person household. His wife and children are not part of the household at this time. When they arrive in the US with legal residence status, he should change his application to reflect the new household status.

Question: I am trying to apply for Covered California health care. I am an adult (over 26) who is living at home with my parents. I am also listed as a dependent on my parents income taxes because they are helping to pay for my college tuition fees. Should I be applying as a household as 1?

Answer: No. Since your parents are claiming you as a dependent, you must apply as a 3-person household of with them on the application and opting out of coverage and using the entire household's income. If you agree to file your own tax return in 2014, you can apply as an individual using your own income. Here are some things to consider if you do strike out on your own: (1) Unless your 3-person household income is less that $50K, you'd be better off buying coverage for yourself off-exchange, (2) if you estimate your own income to be less than $15,500 in 2014 you will be eligible for Medi-Cal, (3) your parents will give up a $2,000 tax deduction.

Question: I have an individual grandfathered health insurance for my family. 1) Am I excluded from ACA tax penalty for 2014? 2) Can I change my plan in 3-6 months & get an ACA compliant insurance?

Answer: Yes, your grandfathered plan exempts you from the tax penalty for mandated coverage non-compliance. No you cannot change your grandfathered plan to Covered California anytime it suits you. After this open enrollment (OEP) period ends on 3-31-14, you must wait until the next OEP, starting 10-15-14 for 1-1-15 effective date of coverage.

Question: Family of 4 with an agi of $45,000. The Covered California online application says the children qualify for medi-cal. Family wants to pay the premium for their daughters. Can they still apply in Cover California for the four of them? If they receive medi-cal can they use it as a supplement for their Cover California policy?

Answer Yes. This family should apply through Covered California because the husband and wife will get a substantial subsidy. Be careful to indicate that the children do not want coverage, otherwise they will automatically be enrolled in Medi-Cal. Then they can apply for the children off-exchange in the plan of your choice. Yes you can have both Medi-Cal and private coverage.

Question: Phil please comment on the new CMS guidance on this subject. Here are the main points from the CMS bulletin:

  1. The health insurance exchange still is responsible for determining eligibility to obtain a marketplace plan and for financial assistance, and individuals must submit an application to begin the process.
  2. If an individual was unable to purchase a marketplace plan in time for the coverage to begin Jan. 1, the marketplace can set a date for retroactive coverage based on when the application was submitted.
  3. If an individual diverted the exchange and enrolled in a health plan directly through a carrier, and the health plan also is offered on the marketplace, the marketplace can treat the enrollees as if they made their arrangements through the exchange.
  4. In both of the above circumstances, if the enrollee also is determined to be eligible for premium subsidies by the marketplace, CMS will provide the tax credits retroactive to the policy start date directly to the insurance carrier. The insurance carrier would either credit or refund to the enrollee any claims or excess payments retroactive to the policy start date.

Answer: The CMS Guidelines are just that - guidelines. The devil is in the details and once the i’s are dotted t’s are crossed, I think you’ll see these guidelines are a nonstarter in California. But some state exchanges are really in deep doodoo. The “Cover Oregon” exchange still (March 1) does not have a working online application. Paper applications are reviewed manually by state workers wearing green eyeshades. So Oregon Governor John Kitzhaber worked with the feds to figure out a solution for Oregonians screwed over by his state’s disastrous Obamacare rollout. Realizing the need, the Obama administration opened up alternative avenues for states like Oregon (the CMS Bulletin to which your refer above) to make up for lost coverage time and federal tax credits caused by the technical problems at their state health insurance exchanges.

However, to answer your question directly: yes, applying through Covered California is still the only way to get a subsidy in California. To quote item 1 in the CMS Bulletin, “the health insurance exchange still is responsible for determining eligibility to obtain a marketplace plan and for financial assistance, and individuals must submit an application to begin the process.”

While the California exchange rollout was anything but smooth, the technology was adequate to get most of those who met the December 23rd application deadline covered on January 1. So item 2, does not apply in CA and it follows that item 3 does not apply here either. For item 4 to work, items 2 and 3 would have to be met, so that doesn’t apply either.

Admittedly, most of those January 1 enrollees were not able to actually use their health care coverage for most of the month of January for lack of insurance cards, but that was due to (a) extending the application deadline twice, (b) delays in handing off application data from the exchange to the carriers and (c) the carriers’ inability to get invoices out in a reasonable amount of time. Worst case, some people will have to go through the hassle of submitting claims to recover out-of-pocket costs after their effective dates of coverage. I guess we can be thankful, once more, that we don’t live in Oregon.

Coverage for Dependent Parent?

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Question: My mother (64) is an immigrant and lives with me and my family, and makes 0 income. I have claimed her as a tax dependent on my 2011 and 2012 returns, though she files her own returns with 0 income. When I created a CoveredCA account for her, I used MY income as the household income, which precluded her from receiving subsidized insurance either through the exchange plans or through Medi-Cal. The definition of household income here is unclear. Any insight on what's the right definition here for household income?

Answer: Assuming your mother has legal resident status, she is eligible for Medi-Cal. Her application has to be changed to a 1-person household with $0 income and she has to agree to file a tax return in 2014 as "single" status. You need to stop claiming her as a dependent. You can't have it both ways.

Undocumented DACA Immigrants?

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Question: I have a two-year work visa under President Obama’s DACA law but I am not a citizen and do not have a green card. Can I get California Covered?

Answer: You are definitely eligible for Medi-Cal, not sure about premium tax credits and or cost sharing reductions in Covered California. You have legal status under the Deferred Action for Childhood Arrivals (DACA) program and as such are eligible for Medi-Cal in California. Background: In 2012, President Obama developed DACA, which grants undocumented children legal status and authorization to work in the United States for two-year periods. To be eligible for the program, children must:

  • Have arrived in the U.S. before age 16;
  • Be under age 31 as of June 2012; and
  • Have continually lived in the U.S since 2007.

While the expansion of Medicaid under the ACA specifically excludes undocumented residents, California ruled that DACA residents are eligible for Medi-Cal.

Change Plans Now?

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Question: I began coverage on 1/1/14 on the Blue Shield Bronze PPO. Can I change to the BS Silver PPO now or do I have to wait til next year?

Answer: You can change plans until March 31st. After that you will have to wait for the next open enrollment period.

Question: My doctor wants to know how to get into the Covered California network.

Answer: Once again, there is no Covered California provider network. Your doctor must contact the provider services department for each qualified plan within Covered California - Blue Shield, Anthem Blue Cross, Health Net, Kaiser, etc. The Blue Shield Provider Services phone number is 800-258-3091. I try to get the other carriers’ numbers and post them here.

Deductibles Individual or Aggregate?

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Question: There are 2 members in my family, a 59 y/o and an 18 y/o out-of-state college student. We are looking at the BS Silver 70 PPO plan. If one of us is hospitalized, is the deductible $2,000 (individual) before the 20% starts or would it be $4,000 since we are a family? Likewise, is the same true for maximum out-of-pocket expense? If it is the $4,000, it seems wiser to go with the Gold 80 plan at $100 more per month rather than risk the deductible. Your thoughts?

Answer: Nearly all of the ACA-compliant individual plans (the only plans you can buy now), have individual deductibles. So in your example (if one of us is hospitalized...) once the $2,000 deductible is met the 20% coinsurance goes into effect. The Bronze HSA plan is the only plan in the new portfolio where the deductible is collective or aggregate, meaning the family deductible of $10,000 would have to be met before the 20% coinsurance goes into effect. The out-of-pocket maximum is individual as well. Also, the Blue Shield PPO is the only Covered California qualified plan that will cover your college student "in-network" while out-of-state.

Question: Hi Phil, if a husband is offered insurance through his job (employee portion paid at 100%) and the wife/kids waive because they are on Medi-Cal, would they be required to leave Medi-Cal immediately (or would they have to notify them) because they are offered affordable insurance through the husband's job? Or would they just wait until Medi-Cal says something?

Answer: Medi-Cal beneficiaries are obligated to inform that agency of any changes of status that will affect Medi-Cal eligibility. So yes, you would have to notify them though I don't think that being offered employer-based spouse and dependent coverage would exclude you from Medi-Cal eligibility by itself. But then I'm not a mediCal expert. Keep an eye open for comments to this post as I'm sure some of our Medi-Cal gurus will provide added perspective.

Covering Child with 50% Custody?

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Question: If a person has 50% legal custody of a their child, can the child be covered by both parents that live in different states?

Answer: No. The child cannot be covered by both parents. The child should be covered by the parent who claims the child as dependent for tax purposes.

Question: I (age 27) make 23K a year and I claim my Mom (age 58, 0 income) as dependent in my tax. Do you know why I am eligible for the plan(silver 94) but my Mom is not ? She was transferred to MediCal.

Answer: That's interesting. It seems that even though you claim your Mom as a dependent, her eligibility was determined on her $0 income rather that yours. Yet your benefit level (Silver 94) is based a 2-person household. In that case, it seems as if they are regarding her as if she were a dependent under the age of 18. Might be worth filing an appeal if your Mom wants off of Medi-Cal.

Income changes and CSR?

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Question: I'm currently on a Silver 94 PPO with Blue Shield. I'm sort of expecting to make more money than I anticipated around midyear. The way I understand it is that I have to report changes on income to Covered CA. Will this bump me out of the Silver 94 plan and force me to a plan with full deductible at mid year whenever I make the change?

Answer: Yes. Higher income will change your eligibility for cost sharing reductions (silver plan benefit enhancements) as well as advance premium tax credits (subsidy).

No Prior Tax Returns?

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Question: My daughter has not made sufficient income to be required to file tax returns. She is enrolled with a plan but has received a Covered California request for a copy of her W-2 or prior tax return, her birth certificate and social security card. We have the card and birth certificate. How do we respond to the request for proof of income?

Answer: I'm surprised they didn't ask for her high school transcripts? I mean, these CC requests for verification are wildly off the mark. Here's the scoop. You have 90 days to comply. Wait until you can get through to CC on the phone without waiting 30 minutes or more to talk to someone - probably another month. Once you can conveniently talk a CSR, he or she will sort out what you really need to provide and tell you how to submit it. They will also remove the unnecessary requirements from your account. As for your daughter not filing taxes in the past, that's not a requirement. She only has to agree to file taxes for the 2014 tax year and beyond.

Getting Off Medi-Cal?

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Question: I got onto Medi-Cal last year becuse I lost my job. My income will soon go up and I really want to sign up for Anthem or Kaiser, etc. My agent says CC will NOT let me sign up for a plan unless I "disenroll" first, from Medi-Cal. Is that true?

Answer: Yes. The CC system can now instantly access Medi-Cal data during the application process. Applicants currently on Medi-Cal will automatically be found ineligible for Covered California coverage, with or without advance premium tax credits. The individual(s) must get off the Medi-Cal system before becoming eligible for CC coverage.

Negative AGI?

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Question: How about a loss carry forward that comes from a theft loss? This creates a net loss on line 37 of our 1040. How do we enter it on the Covered California website or the Medical website. It doesn't allow us to enter a negative number for AGI.

Answer: The CC application asks for your current income whether W-2 employed or self employed. Jeeze Louise! What did you make last month? If you start making a lot more, or a lot less, you can correct later. After personally assisting on over 300 CC applications, I can tell you that for most people, the whole AGI thing makes things more complicated than they need to be. Fuhgeddaboudit!

Employer Mandate Delayed?

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Question: I read in the news that the requirement for employers to provide health insurance has been delayed another year, but when I got into the details I just got more and more confused. Help?

Answer: Under the latest regulations, only employers with more than 100 full-time workers will have to pay fines next year and only if they do not cover at least 70% of their workers. In 2016, when the full mandate takes effect, employers with more than 50 full-time employees will have to provide insurance to at least 95% of their employees.

Question: When I enrolled in Covered California Anthem Gold PPO in December, I first called all my doctors offices, twice, and asked what CC plans they would be participating in. Each time they all told me if I picked a “Blue PPO” I’d be fine. As Anthem is the only PPO available in Alameda County (Blue Shield is an EPO), I signed up for Anthem. Yesterday I looked on the website and my large internal medicine group had dropped. I emailed them and my doctor confirmed, saying it would “Be Prudent” for me to find a new doctor ASAP. What are my options? I could try to get back on my HealthNet high-risk pool plan ($1080/mo, $4000 deductible, cancelled Nov. 1 then reinstated, but it’s so infuriating when I’m eligible for a significant subsidy on the exchange. I work 3 jobs to be able to pay for health insurance. What do you recommend as a pathway to finding the cheapest insurance that does cover Alta Bates Medical Group, Hills Physicians Med Gp, Sutter East Bay Med Fndn, or multiple of those groups)? Advice welcome.

Answer**; You seem to be someone who is receiving ongoing treatment for multiple conditions. So I understand that changing providers is a bitter pill to swallow. However, think of it as a trade-off. You couldn’t even get regular health insurance a couple of months ago because of pre-existing conditions - paying over $1,000 monthly for a high deductible risk pool plan. Now you can get covered for the same rate as a triathlete. Now you are “eligible for a significant subsidy” making a no-deductible Gold plan available at a fraction of what you were previously paying for substandard coverage. Narrow networks are necessary to keep costs down - one of the trade-offs for all the good stuff you now enjoy. You welcomed advice - pick new providers in-network for the plan you selected and move on.

Question: My husband and I are both self-employed so our income varies. Likely we will fall around the $60,000 mark for 2014 and qualify for a subsidy. The problem arises because we would like to choose two different plans based on different medical needs. Both plans are offered on “Covered California.” We want to choose a bronze plan for him, and a platinum plan for me. According to some info on the web, this should be a possibility, if so how would we do it?

Answer: The CC online application allows for multiple plan selections for households with 2 or more applicants when applicants are eligible for CC coverage without subsidies. Ths plan selection screen Plan Selection.png (click image to enlarge) is in the Enrollment Section. This would require overestimating your income on the application so as not to be eligible for advance premium tax credits and getting full tax credit due when your tax return for 2014 is filed.

Question: There are 2 members in our household. I am self-employed, with an 18 y/o dependent, with an AGI of $55,000. My 18 y/o attends college out-of-state and has no income. She will turn 19 October 2014. My understanding is she will be covered out-of-state under a family plan if I purchase BS PPO Silver 70. What happens mid-year when she turns 19? Does she have to go on Medi-Cal? If so, will it cover her out-of-state? Would it be better to purchase a catastrophic PPO policy for her now and for me to get my coverage through CC?

Answer: No worries. Your income $55K is high enough that your dependent under 19 will not be eligible for Medi-Cal and your Blue Shield Silver 70 PPO Plan will provide her with excellent coverage out-of-state. When she turns 19 she would be ineligible for Medi-Cal in any case as long as she is included in your household as your dependent. If your income was below $38,775 (250% FPL), she would be eligible for Medi-Cal until age 19 with only emergency health care coverage out-of-state.

I need to change my plan. How?

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Question: I signed up for Blue Shield enhanced PPO through CC. But, my OBG does not seem to be getting paid from them so they do not take this insurance. How do I change my plan so I am covered with her? She is in the Cedars Network I believe.

Answer: From what you've said, It's possible that your doctor is in the Anthem Pathway network. In any case, you have to find your doctor in the right network before you change carriers. At this point-in-time, it is difficult to search the right carrier networks for a doctor. No offense, but you are not likely to do it right. You could use the assistance of a Certified agent. Go to coveredca.com, select "Find Local Help", then select, "Agents".

Catastrophic Insurance Over 30?

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Question: I am eligible for catastrophic insurance due to my old plan being cancelled and my inability to find a plan that I can afford. I have been trying since December to find someone to quote me a price for catastrophic coverage and have yet to find anyone who can do that. Any suggestions on how to break through the Obamacare firewall and access these plans?

Answer: No over-30 rates or online applications available yet. Carriers are just beginning to set up application processes to open off-exchange catastrophic plans to new or current individual members, 30 years of age or older to apply if the attest to their plan being cancelled due to the ACA, and finding other plans unaffordable. So far, no news from Covered California about opening on-exchange catastrophic plans. Background: In late December, HHS released guidance that allow individual plan members with discontinued policies to be eligible for a hardship exemption from the individual mandate and enroll in catastrophic plans that were previously only available to individuals under 30.

What's a Physician to Do?

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Question: I work for a private physician's office, and we have multiple patients switching to CC. How do we know if we can still see these patients? Do we need to contract? If so, how do we do that? Also, how do we set a reimbursment rate? None of this is clear on the website. Is there even a providers line to call?

Answer: Providers do not contract with Covered California directly, but with each individual carrier selling plans through CC. So you need to contact Anthem, Blue Shield, Health Net, etc. and inquire about getting included in their 2014 Individual and Family Plan networks.

Medi-Cal Asset Recovery?

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Question: I am hearing contradicting statements as to whether or not the new recipients of Medi-Cal are subject to recovery of assets upon death. Is there a definitive answer and how would it apply to a child only Medi-Cal recipient if the parents qualified for a subsidy while the child was placed on Medi-Cal.

Answer: Read the comments to this previous post on this question to get as definitive an answer as is possible at this point.

SSN Doesn't Match? Impossible

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Question: Why do I get a letter telling me that my husband's social security number doesn't match what they have on file? How can that possibly be?

Answer: At this point, Covered California's requests for verification are often nonsensical. I advise you to ignore this request for 2 or 3 weeks when hopefully you will be able to get through to Covered California on the phone and to remove this requirement from your record.

Question: I have an Anthem Platinum Guided Access cead plan. It says Pathway X HMO on the card. I can’t find a list of in-network providers anywhere.

Answer: Use this link: https://www.anthem.com/health-insurance/provider-directory/searchcriteria?qs=*U+6hK7rK6dMu/ioZcqYOcg==&brand=abc. The page looks like this Anthem Find a Doc.png (click image to enlarge). Section 4 is the important part. After selecting California, you will click on the Plan Type/Network selection and a drop-down menu will appear that looks like this Network.png. Scroll within the menu to find the Pathway Networks. The correct selections for your scenario would look like this Search.png. Now you are ready to click the “search” button and go.

Finding a New Doctor or Hospital?

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Question: Well, I need to find new doctors and hospitals and facilities as none of my current ones are in my plan. Does an independent and reliable ratings system for hospitals, facilities, and doctors exist? Blue Shield rates hospitals but it seems limited and maybe it is biased.

Answer: Believe it or not, YELP.com to be a great way to find a new doctor. The reviews are written by patients like you. Look for negative reviews retold by more than one patient. For example, I checked on a doctor I used to see. Several reviews complained about her staff being deliberately rude and incompetent, which was exactly my experience. As for hospitals, try a Google search for "best hospitals in (city or county name)" and read more than one search result. You'll get the picture.

Question: I am suppose to submit proof that I do not qualify for employer insurance. I have been paying for an individual Kaiser plan that is up to 270/mo , 80 dr visit, 1500 deductible. Income wise I qualify for a Kaiser enhanced silver plan but because my employer offers non kaiser insurance I haven't taken it because I've have cancer and psoriasis. I was provisionally approved by CalCov and paid $105. My individual plan expires in Feb since I haven't paid January and now I owe them $540 if Cal Covered doesn't go through. What am I suppose to do?

Answer: You say "my employer offers non kaiser insurance I haven't taken it". The ACA and the IRS are very clear on the fact that if you have access to employer-based health insurance, you will not be eligible for a subsidy. You have Covered California coverage for 90 days. Then you will have to decide between employer coverage or unsubsidized individual coverage.

COBRA with CC as Secondary?

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Question: I have COBRA coverage through March 31. I also applied for a Covered California plan, then found that none of my doctors are in-network with the new plan. Can I keep COBRA AND use the CC plan as secondary insurance?

Answer: No. You cannot use any ACA compliant health plan as a secondary plan. You can reapply for Covered California coverage before March 15 to replace COBRA coverage on April 1st.

Question: Please help me. I enrolled and was accepted. However, I selected the wrong health plan... I un-enrolled. I waited 3 weeks. I am now trying to re-enroll. The system recognizes me by my SS# and says I already have an account, and won't let me initiate a new one...HOW DO I CHANGE MY PLAN ONCE I'VE ENROLLED? Any help you can provide that will spare me the miserable phone wait would be much appreciated.

Answer: It is not necessary to create a new account and you misunderstood the part about waiting 2 weeks. Login in to your existing Covered California account and select "Terminate Participation" terminate.png (Click on image to enlarge.) You will directed to select a termination date that is a least 2 weeks from today. If you want the new coverage on March 1st, select a termination date of February 28. Now you should be able to select another plan effective March 1st.

More Income Verification Requests

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Question: I have already received my medical card from Kaiser, selected my primary doctor. I thought I am all set. Out of the blue, I received another letter from Covered California asking for more income verification. At what point do I know that I am approved? Will they send me a letter of approval? My current premium was based on my income in 2012. I told them that I may make less in 2014. They said that I can qualify for more subsidies if I can prove my lower income. How can I prove my 2014 income now? Should I ignore the request and just pay the higher premium. I understand that I will get tax credit if I turn out to make less in 2014,correct?

Answer: You are approved. At this point, Covered California's requests for verification are out of control. I advise you to ignore these requests until you get closer to the 90-day deadline when you will be able to get through to CC on the phone and get them to sort out which of these requests are really needed.

Decline Medi-Cal for Kids?

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Question: If a family is eligible for mixed health care coverage - the parents qualify for APTC and the children are eligible for Medi-Cal - are the parents still eligible for the APTC if they decline the Medi-Cal benefits for the children and enroll them in a private plan?

Answer: Yes.

Question: It is my understanding that individual carrier networks should mirror on and off the exchange as per previous posts. How do you then explain Cedar-Sanai hospital who is doing just that with their contract through Health Net and are specifying down to plan level what they are accepting.

Answer: My read on the Cedars’ statement below is that the Health Net network is broader and more inclusive at the Bronze and Catastrophic plan level than are other levels. This is not an on exchange / off-exchange issue.

From Cedars Sinai website; “If you choose to purchase your health insurance through the exchange and want the option of receiving full coverage for care provided by Cedars-Sinai Medical Center and its physicians, there are three Covered California plans that will work for you:

  1. Health Net Bronze PPO Plan (available to all)
  2. Health Net Catastrophic PPO Plan (available to people under the age of 30)
  3. Health Net Tribal PPO Plan (available to Native Americans and Alaska natives with certain income limitations)

Question: My wife and I are both self employed. We really have no idea of what our income will be in 2014. We based our application on our 2012 return; that all we can really do. Do they look at your returns each year and then adjust? Or send a bill? I am very worried about getting a large bill for a year past, that could break us. P.S. Our insurance costs have doubled from last year, for basically the same coverage. I am not a fan of Obamacare.

Answer: Covered California has access to your 2012 AGI from the IRS data hub. However, it is only a benchmark. If you feel that your 2014 income will be substantially more or less, use your 2014 estimate instead. To avoid the possibility of a big tax bill at the end of the year, you can choose to take only a percentage of your tax credit as a monthly advance. This step is in the online application just before selecting a health plan, if ignored it defaults to 100% advance tax credit monthly.

Question: I ... put my wife on Covered CA Blue Shield plan. My job opportunities fell through ...and believe I would qualify for assistance for my wife and myself. I need to add myself to the plan. The Covered CA website does not address this and the phone chat lines seem impossible to get through. Any suggestions?

Answer: "Terminate participation" on you wife's plan effective February 28th, then "withdraw" your wife's application (you'll find lot's of info in previous posts and comments on how to do this. Just search this blog for the keywords in quotes above.) After the application is withdrawn, log back into her account and click on apply now. All of the data previously entered will still be there as you go through page by page and you can make changes as needed including adding yourself and changing the income figures. Your new coverage will be effective March 1st. This same process can be used to change the plan selected, just don't take the withdraw step.

Question: I have a BS PPO family plan through Covered California. I have been told by UCLA Hospital & affiliated doctors that if you purchased BS PPO through CC then you are not in network. But if you purchased the same plan through an agency you are in network. When I asked the BS agent, prior to signing up at CC, about providers accepting BS PPO/CC I was told that if providers are in network with BS PPO then they're in network through CC. They said it was the same. Can you please explain this? The doctors offices are unaware and uninformed.

Answer: The provider networks of the health plans participating in Covered California, like Blue Shield, must match their off-exchange plans networks to their Covered California networks exactly. The are the same. However, the reverse is not true, these same carriers have other networks that do not match their Covered California networks. Examples of these are grandfathered individual plan legacy networks and group plan networks. So this statement "if providers are in network with BS PPO then they're in network through CC" is not accurate. Some doctors' offices are of the opinion that Covered California has it's own network and this is way not accurate.

No Tax Filing, No Subsidy?

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Question: Per IRS and Ca State law (I have letter from CA confirming I don't have to file ) I don't file yearly taxes... I was denied and the lowest cost is 16% of my monthly income...Why does it matter ? Why is everything centered on tax filing?

Answer: You remind me of the car crash driver who refused to stop because he had the right of way. How much are you will to spend to make a point? The Covered California application requires you to promise to file by 4/15/15 for the 2014 tax year, so why not file for 2013 as well, then you would be able to answer "yes" on both counts and be eligible for all that IRS money. Yes, IRS money: that's why they have a say in your eligibility for tax credits.

Tax Filing Requirement?

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Question: I am a tax professional and need to ask what happens, as with many self employed clients, if they don't file by 4/15/14, even though they signed up promising to do so. Will the extension rules be the same or are there addtional penalties?

Question: Filing for an extension by 4/15/14 should satisfy the letter of the law, but I would ask one of my legal-eagle commenters to find a citation for this.

Question: We recently received an e-mail from Covered California saying we have 90 day conditional approval. This is due to not verifying our SSN to our application. My wife and I are both lifelong California residents and had the same SSN for over 50 years. How could Covered California not be able to verify this? Also, I have Blue Shield now thru Covered California and have paid the premium. Could I lose this insurance after 90 days?

Answer: Covered California's enrollment processing system has some bugs, like making illogical requests for verification documents. You can clear this up once you can get through to a Covered California service rep on the phone. They can remove the requirement from your account. The CC phone situation should begin the loosen up this week but there's no rush to resolve this.

Pediatric Dental Required?

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Question: Do I have to select a pediatric dental plan for my kids through Covered California? Do I have to select one at all?

Answer: No on both counts (correction). (See very informative and detailed comments on this article)

Question: I managed to reach Anthem by phone and paid my premium for January. They processed the payment last week. I still have not received any membership information, card or number. My pharmacy will not honor this plan without a card. Will Anthem will reimburse me for these prescriptions when I file a claim?

Answer: As long as you pay Anthem by January 31st, you can use services covered by your health plan starting January 1. First, be sure the provider (a doctor or pharmacy) is participating in the Anthem "Pathway" network.Once you have proof of health insurance coverage effective January 1, 2014, you can submit the provider's bill to Anthem to process.

Question: I have a self-employed client who sent an affidavit for estimated 2014 and CC is still requesting for more "proof". I see a huge problem on the way if this is going to be their regular mode of operation. How in the world will any self-employed person "prove" their estimated income for the year?

Answer: If CC is still requesting more proof, it may simply be due to a recognized glitch in their system and not the fact they find the income affidavit unacceptable. They are making all sorts of unreasonable requests for documentation right now. I would wait a while before submitting anything else.

Question: Does the Maximum Out-of-Pocket of $6,350 include total cost to the consumer for any given care or is it limited to the insurance company's "negotiated rate" for a given treatment? In other words is the patient stuck with the costs above and beyond the negotiated rate and if so, will that cost go towards the "maximum out-of-pocket" or will it not?

Answer: The out-of-pocket maximum of $6,350 for covered expenses in a calendar year is based on the negotiated or contract rate. There is no patient responsibility beyond the contract rate for in-network expenses. Out-of-Network coverage has a higher out-of-pocket maximum and the patient is responsible for charges beyond the contract rate.

Question: I had enrolled in KP HMO Silver 87 Plan through Covered CA website. I received my first billing from Kaiser Permanente indicating that I was on their KP CA Silver 2000/45 Health Plan. I was charged the same premium as quoted by Covered CA for the KP HMO Silver 87 plan. Copays/Deductible for KP 2000/45 plan a lot higher. What should I do?

Answer: Don't be concerned. Kaiser knows that you are on an enhanced version of the Silver 2000/45 Plan as evidenced by the correct premium. They apparently lack the ability to reference the enhanced version of a Silver in their billing system.


Changing Insurance Company?

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Question: I have submitted payment to Blue Cross but have not received a card. In the meantime, I found out that my therapist only takes Blue Shield. (I thought Blue Cross/Blue Shield were the same company because this is my first experience purchasing in CA. Also some of their paperwork includes both names suggesting they are the same). I want to change carriers because I want to remain with my therapist, but I don't know if that is possible or what the smartest, most efficient process is to complete the switch. Do you have any helpful suggestions?

Answer: You can change plans or carriers within the open enrollment period, that is before March 31st. It can be done online by "terminating participation" (in your CC account on the home screen click on "terminate participation" at bottom left of page) in the previous coverage and selecting new coverage. It's important to get the dates right so that you do not have a gap in coverage or double coverage. The smartest, most efficient way to do this is to contact a Certified Covered California Insurance Agent.

Submitting Verification Documents?

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Question: There's a message on my eligibility page saying to check my manage verification page for new doc requests; of course, there's nothing new on the MV page. My eligibility states that unless they get whatever it is they need by Jan 31st, I will not be eligible for CSR and APTC. My question is whether they will cut off those payments if I can't reach them to find out what in the world they really want? Do I need to wait on hold all day or can I wait until after Jan. 31 - safely - to try to call?

Answer: The documents required for verification are available on your Covered California online account, you haven't looked in the right place yet. Look for a documents link on the left side of the home page. If you don't have an online account or can't get into it, you will have to call Covered California. I know. I know. But the phone situation should start getting better this week. Covered California puts out a variety of contradictory and seemingly random deadlines for this or that. You have 90 days from the date of your application to provide verification documents (probably more if you show that they contributed to your tardiness).

Group Coverage Without Dependents?

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Question: I have a group and want to exclude dependent coverage so my employees can apply and receive a subsidy on the individual plans for there dependents, spouse and children. Is that possible and is the system set up to handle those options. As I understand all the insurance companies need to include dependents.

Answer: Yes. It is possible through Covered California SHOP right now. The employer has the option of excluding spouses and dependents. Expect carriers to follow soon.

COBRA and Subsidy Eligibility?

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Question: I applied for coverage and have a COBRA plan that is way above the 9.5% of income, but when I answer on the application that I have COBRA it remove the subsidy? on the application how do I explain that the Cobra premium is above 9.5% and that a subsidy should be applied?

Answer: You are free to drop the COBRA plan and enroll in a Covered California qualified plan with eligibility for APTC anytime during the open enrollment period. Select, “None of the above” in answer to the question about other coverage, as if you had already cancelled you COBRA coverage. Dropping COBRA outside of open enrollment will not create a special enrollment period so you can’t be eligible until the next open enrollment period, COBRA was meant to protect individuals who lost their group coverage in a medical underwriting environment where they may not have qualified for individual coverage. The ACA did not intend for COBRA to be an obstacle for individuals desiring coverage and premium assistance through the exchange. Being held hostage by a costly COBRA plan because of preexisting conditions is one of the problems the ACA seeks to solve.

Pregnant Applicant Dual Eligible?

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Question: For a family of 2 earning $45,000 a year qualifies for PTC. Since the woman is pregnant, Covered California is forcing the woman into Medi-Cal? Why is this happening? Can she opt out and still get the PTC? This couple is far from poor why would this happen?

Answer: She’s not “forced into MediCal”. It is offered to her as another option. She is eligible for Medi-Cal due to pregnancy and income, but it does not prevent her from choosing a Covered California qualified plan with APTC and CSR for which she is also eligible.

Changing the CC Application?

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Question: I’m at the eligibility verification stage but realized I didn’t count some of my self-employment income. I need to go back and change my income amounts, but I can’t figure out how to do that.

Answer: If your eligibility was already determined using the original income figures, you cannot change the eligibility outcome by making changes to income. It will look like you successfully changed the income numbers, but the final outcome will not change. You will have to “withdraw” and restart the application.

Only Conditionally Eligible?

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Question: We signed up on 1/14/13. However, under the Eligibility tab, we’re told we’re only conditionally eligible for APTC (Advance Premium Tax Credit) and CSR (Cost Sharing Reduction), pending submission of documents verifying income eligibility. We’ve both been given until April 14 to submit the relevant documents. (1) Do we count as having applied in time for Jan 15 deadline for coverage beginning Feb 1st? (2) Will we have to pay the full premium without the APTC until we are no longer “conditional”?

Answer: While conditionally eligible you enjoy the full benefits of your coverage, including tax credits and cost-sharing reductions. If your application was completed by the application deadline (the 15th of the month), your coverage will be effective on the first of the following month.

Anthem "Find a Doctor" Confusing?

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Question: We enrolled for the Anthem Blue Cross Preferred Direct Access Pathway PPO plan. My PCP is part of Palo Alto Medical Foundation / Sutter Health. When I lookup his profile directly from Anthem’s website, the insurance plans he accepts show “Preferred Direct Access - CA”. He also shows the other tiers offered - Core, Essential, Premier Direct Access of the Pathway PPO and Guided Access HMO plans available through Anthem BC for 2014. But if I login to the Anthem website as a member, the search does NOT include my doctor s “In-Network” under the Pathway PPO /Preferred Direct Access Plan. This is true of most if not all doctors from PAMF listed on Anthem’s website.

Answer: The name “Preferred Direct Access” refers to gold-level plans in Anthem’s small-group plan portfolio and off-exchange individual and family plan portfolio. “Pathway” is the network name used by all individual plans effective 1/1/14 and later. “Pathway X” is for Anthem individual plans sold through Covered California. he Pathway X network is exactly the same as the Pathway network without the X. When using the Anthem “Find-a-Doctor” online app, select the Pathway network first, then the plan type and name.

Question: Under 65 and covered on Medicare Part A & B due to cancer, she would like to cover herself, husband and son through Covered California because they qualify for subsidy. Can all three enroll under Covered California and get Premium Tax Assistance, or will she be excluded?

Answer: Since she has minimum acceptable coverage through Medicare, she will not be eligible for APTC or CSR through Covered California. The rest of the family can be of course.

Question: With the much narrower networks in all EPO/PPO plans the chances of an out-of-network provider providing services to me on ER are high. Seems like in California, balance billing, where the out-of-network provider charges you the difference between what insurance pays and whatever rate they may please, has been banned for HMO plans since 2008. It is not so clear to me what is going on for PPO/EPO plans. Seems like consumers from PPO/EPO plans licensed by the California Department of Managed Health Care can't be subject to balance billing on ER visits according to this http://goo.gl/bqZBgf. Any idea if using the plans on Covered California one would not be subject to balance billing on ER visits?

Answer: No. Qualified health plans offered through Covered California are underwritten by private insurance companies licensed by the California Department of Managed Health Care or the California Department of insurance and as such all Covered California HMO, EPO, and PPO plans are subject to restrictions against out-of-network providers balance billing for emergency room services (not including ambulance services).

Question: My parents are US citizens, but they have lived in Europe for the past ten years. My mom is 63 and my dad is 76. They want to move back to California. Their combined income is roughly $40,000. Will they be able to sign up for private plans and use the Covered California subsidy, and get plans thru that. Or will they HAVE to use Medicare because of their age? They want to get the BEST platinum-level plan possible, and I am willing to help them financially. Will the Medicare best plan be comparable to the private level platinum best plan? I am concerned and want to know what their options will be, and what the BEST coverage will be through Medicare.

Answer: The ACA mandates that individuals age 65 and older to enroll in Medicare. If your father does not have fully insured status (40 credits) he will pay a premium of up to $426 in 2014. He may also have to pay a premium penalty for not registering at age 65 (not sure if there is an exemption for being out of the country). In your father’s case original Medicare coverage with a Plan F Supplement (an additional $200/mo) would be even better than Platinum private coverage (100% coverage with unlimited network). Your mother (age 63) is eligible for a premium tax credit of about $330/mo. Which she can apply to the purchase of a Platinum Plan through the exchange, leaving her a net premium of approximately $500 per month. The total monthly cost to accomplish what you outlined above is approximately $1,200 per month (assuming no Medicare premium penalty).

HSA Plan with Subsidy?

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Question: If I choose a plan with an HSA will the amount I deposit into it drop my AGI and therefore drop my subsidized insurance premium in the exchange?

Answer: Yes. Since HSA contributions lower your adjusted gross income, your eligibility for tax credits will be increased and your net premium reduced. Keep in mind when selecting any bronze level plan that you may be giving up substantial cost sharing reductions that may be available to you at the silver level.

Will Medi-Cal Take my Assets?

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Question: Will Medi-Cal take my assets to pay my medical expenses after I sign up.

Answer: Not while you’re alive. But the state of California may seek to recover medical and long-term care expenses paid for by MediCal from deceased clients who leave behind significant assets. This only applies to beneficiaries over the age of 55.

Can I Buy Off-Exchange Anytime?

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Question: I make too much to qualify for a subsidy. If I buy a plan directly from Anthem or another provider, can I purchase an individual plan directly outside the exchange after March 31?

Answer: No. You cannot purchase individual coverage outside of the open enrollment period without a qualifying event, on or off exchange.

No Blue Shield Member Card Yet?

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Question: I paid my premium on the blue shield website. Have confirmation # and case #. Have not received member ID card yet. Need to go to doc before card arrives. Doctor says they need Member ID # to confirm. What to do?

Answer: Blue Shield says that they send ID cards to clients 7 to 10 business days after the installation process is complete. You can also print an ID card at this web address: https://www.blueshieldca.com/bsca/registration/step-1-subscriber-id.sp?showError=true, but you must have a membership number to do that, so I’m not sure how helpful that is right now. BTW members ID numbers are 9 digits beginning with 900.

How to Change Plans?

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Question: I’m now enrolled on the Enhanced PPO plan of BlueShield but I’m coming to realize that their PPO network has been brutally cut back. In my region, San Francisco, it’s about 25% of the full PPO I had before. None of my regular doctors I have been with for years are in it and I’m looking at the correct provider directory on blueshieldca.com. Can I change still my plan to something else? (How does one do it in coveredca.com to change just the plan and nothing else?

Answer: Login in to your Covered California account and select “Terminate Participation” terminate.png Click on image to enlarge. You will directed to select a termination date that is a least 2 weeks from today. If you want the new coverage on February 1st, select a termination date of January 31st. Now you should be able to select another plan effective February 1st.

Question: I heard the premium payment deadline has been extended once again to 1/15/14. It that accurate>

Answer: Yes. True for all Covered California carriers. CC made announcement late yesterday.

Question: I’ve submitted my payment info twice on the Anthem payment landing page. Once on Dec. 13 and again on Jan 2. Both times I receive a confirmation email, but with no payment info or receipt. My credit card remains uncharged. Anthem call center says I’m in the system but says they are backlogged and I won’t receive a member number and card until the payment is processed. How can I access services for which I am supposedly insured as of Jan 1? I need to refill prescriptions. Is cash out of pocket and submitting a claim after I get my member info the only way?

Answer: The good news is they have you “in their system”. I don’t know how you made payment without receiving an application number. You will receive your application number by mail, then make an online payment at https://shop.anthem.com/sales/eox/payment/enroll/landing/CA or by phone at 855-634-3381. Assuming your coverage is effective on 1/1/14, you can recover the covered portion of any medical expenses you paid for by filing a claim (which is no fun, so don’t do that unless you have to).

Question: If a family’s estimated income for 2014 is just above the threshold of California Poverty Line that makes them eligible for premium assistance and cost sharing and in June 2014, it finds that its annual income is dropped below the poverty line making it ineligible for premium assistance and cost sharing. Please answer the following questions. a) Will this family’s health coverage be switched over to Medi-Cal in July 2014 or continued to the end of 2014? b) What will happen to its monthly premium assistance and cost sharing benefits availed of from January to June 2014? How those ones will be considered at the time of filing 2014 tax return? c) Also answer these question in vice-versa circumstances i.e a family’s estimated income comes under poverty line and in June 2014 its income increases making it eligible to premium assistance and cost sharing.

Answer: a) If this family were to report a change in income to the exchange that would make them eligible for Medi-Cal, for example becoming unemployed, they would be switched to Medi-Cal. The IRS would reconcile Advance Premium Tax Credits (APTC) received to that point on the family’s tax return. If the family’s income was below 100% of FPL for that year, there would be no recovery of APTC. (See previous entry on this subject). There is never any recovery of Cost Sharing Reductions (CSR). b) Conversely, increased income reported mid-year could move this family from Medi-Cal to subsidized exchange coverage. Again, the IRS would settle-up for the tax year.

No News on Mailed CC App?

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Question: Can I check online if I submitted my application by mail? I sent the paperwork by mail Nov 15, and I haven’t heard anything.

Answer: At this point, there’s a good chance your application has slipped into a black hole. I’d suggest that you complete a Covered California application by phone or online, before Jan 15 to be covered for Feb 1.

Question: I enrolled in a Blue Shield Silver PPO plan on Covered California’s website. That was 3 weeks ago. I can’t get through to Blue Shield on the phone. How can I make my payment to Blue Shield?

Answer: Your Blue Shield payment can be made online. To make your Blue Shield payment online, go to http://service.healthplan.com/blueshieldca/binder You will land on a login page that looks like this BSC Reg 1.png (click image to enlarge). You don’t have a login and password yet so you must register first BSC Reg 2.png. If you get this result BSC Registration.png, it means your application is not in their system. Blue Shield expects by January 3rd, 2014, to have everyone who applied by the Dec 23rd, 2013, enrollment deadline to be processed. Here is a direct number for Blue Shield (855) 836-9705. Hopefully you will get the account registration screen BSC Reg 3.png where you will create a username and password. Once the registration is complete, you’ll move to the payment screen BSC Reg 4.png where you should see the exact amount of net premium due . You can relax now, all that remains is is creating a payment account either electronic debit (EFT) or credit card (CC). Print the confirmation page and you’re done.

Can't Sign in to CoveredCA?

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Question: My husband and I have been working on our CoveredCa application & submitted ALL necessary IRS forms, etc. & qualify for the Fed. Tax exemption. We get to keep Kaiser as our insurance but at a much more affordable premium…however, I have tried both last night and just 10 min. ago to sign unto CoveredCa. website and I get sent immediately to a “page does not exist..blah, blah, blah”…I have my “username & password” but still get kicked off…what do I do?????

Answer: The coveredca.com website is down right now. Middle of the day on a Thursday. No warning, no explanation. Just wait I guess.

Question: Peter Lee is quoted in the Wall Street Journal saying if you made a good faith effort to start, you can finish up later. What is actually being offered in the way of an extension beyond December 23rd?

Answer: Covered California’s Certified Insurance Agents have been notified that they can continue to assist consumers to enroll for a January 1st effective date of coveragefor applications keyed into the CalHEERS system by 6:00 p.m. on December 28th.

Question: I just signed up for Health Net PPO - Enhanced Silver. I am confused by the conflicting info on provider networks. EG, on CC website California Pacific Medical Center (CPMC) is NOT in network. On HNet website, using CC-PPO as the filter, CPMC is IN network for 2014 for that plan. CPMC’s own website says it is “in process of negotiating” with Healthnet. Who do I rely on? When will I be able to know FOR SURE whether Hnet covers this hospital? Any guidance will be appreciated. Is it safe to think that Health Net will honor its OWN provider directory for its Covered California plans?

Answer: I can provide guidance, but not a definitive answer. In this scenario, the Health Net website listing of its Covered California PPO network is more likely to be up to date than the other choices. My guess, we won’t be “sure” about the accuracy of the carrier network listings until mid-January. As for Health Net “honoring” an inaccurate listing: they will not provide in-network coverage for a provider who was erroneously listed. You will however have the option of changing plans,including carriers, even beyond the open enrollment period if you erroneously picked a plan without your desired provider(s).

Question: What happens after my Covered California application is complete? I have received nothing from them?

Answer: You will not get any response from Covered California (CC) beyond what you can find in you online CC account. Login to your CC account. The “Progress Bar” is that horizontal line across the top of the page with checked boxes.

Confirm Enrollment: The “Enrollment” box should be checked. If not click on the “Eligibility” box and now you should see a check the enrollment box. If your application is complete, you will see an enrollment summary page with the health plan selected, effective date of coverage, and net premium due. You may want to print that page for your records. If you do not see your enrollment summary, your application is not complete. Complete it by going through the plan selection step again.

Confirm Eligibility: From the progress bar, select “Eligibility”. You will see a very busy page with your eligibility results. Each family member is listed separately and you may find that eligibility varies by individual. Most commonly, for example, parent(s eligible for APTC (Advance Premium Tax Credit - AKA Subsidy) and CSR (Cost Sharing Reduction) and child(ren) eligible for Medi-Cal. Do not be concerned if you see that you are “Conditionally Eligible”, that just means that you will have to provide verification documents within 90 days.

Once your enrollment is confirmed, your next contact will be from the insurance carrier you selected by automated phone message and mail, with instructions to pay your initial premium by January 6th.

How Long for Document Verification?

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Question: Only proof of citizenship was needed for my family - docs uploaded now 2 wks ago - when will verification of docs occur so that enrollment can occur? Thanks!

Answer: You are conditionally eligible now. What that means to you is you will have coverage on Jan. 1st. The conditional part is submitting the required verification documents within 90 days of the date of your application. I guarantee you that whatever you have submitted so far has not even been looked at. So don’t stress. You probably will not get any response to your submittal until well into January.

Applying with 0$ Current Income?

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Question: My son is going to be 26 on 1-3-2014. He is covered on my insurance until 1-31-2014. He is living at home and is between jobs and does not have income. Covered California does not allow him to enter information without showing an income. Also, askes for number of people in household. My husband and I have our own insurance so we would not be applying. How does he fill in this information. He does not need his insurance until 2-1-2014, however, he needs to be covered. We have both tried calling but to no avail as the system is super busy. Please explain how my son proceeds.

Answer: Your son should apply for coverage through Covered California anytime after December 23rd and before January 15th for his coverage effective 2/1/2014. He is a one-person household and since he is estimating his income for 2014, he must enter in income figure even though he is earning $0 today. A number under $16,000 will make him eligible for Medi-Cal. He must promise to file a tax return for the 2014 tax year. (I am assuming that his parents no longer claim him as a dependent.)

Question: I’m little confused about deductible for Bronze Plan.I understand I have to pay $30 each for primary care visit when I choose gold plan. Covered CA website also states that gold plan primary care copay is not subject to deductible. Health insurance benefits chart posted on Covered CA website states that Bronze plan cares copay are subject to deductible. What does it mean? I though copay is cost for services to which deductible does not apply. For example, standard benefits says specialty care visit copay is $70 and deductible is $5,000. Hospital charge me $300 for specialty care visit. Do I have to pay $300 before deductible $5000 met? And then pay $70 for specialty care visit after deductible met? Or do I have to pay $70 regardless of deductible?

Answer: The Bronze plans copays are not subject to the deductible for up to 3 office visits, including pre-natal and post-natal visits, mental health and substance abuse visits, and urgent care visit. What that means to you is you pay only the copay. The emergency room and ambulance copays only come into play once the deductible has been met for a given calendar year. So if you have already spent $5,000 in covered medical expenses for the calendar year and you go to the emergency room, you will pay the $300 ER copay only. Now let’s say you’ve already met the out-of-pocket maximum, having spent $6,350 for the calendar year, you will pay nothing for emergency room services or any other covered expense.

CC Pediatric Dental?

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Question: I’ve gotten conflicting answers about this (pediatric dental). Covered CA rep said they were required to offer it but I was not required to buy it. But Anthem won’t let me buy a policy through them without the added PD policy (its not included in the medical policy). Anthem rep says its the state law & that possibly Covered CA has an exemption even though they are offering identical policies. The State Dept of Insurance could not explain why the difference in answers. What gives!?

Answer: Months ago, Covered California decided not to require carriers seeking to participate in the exchange to include pediatric (-19) dental benefits in their medical plans offered through the exchange. So the carriers set their rates without accounting for pediatric dental benefits. Later, the exchange realized they made a mistake and are actually out of compliance with, at least, the ACA’s intent on this issue. Too late, the rates were set. In the meantime, the carriers’ off-exchange plan offerings learn must include pediatric dental. What a paradox, the exchange is not including pediatric dental and out-of-compliance with the law and the non-exchange got it right.

Question: What do I do if I’ve never accepted my employer’s health insurance and now I want to enroll for 2014 but the open enrollment period isn’t until July of 2014.

Answer: Interesting question! Since you do not have access to employer-based coverage at this point in time and you decided to opt-out of your group coverage before the ACA mandate was fully implemented, I believe that you can apply for Covered California coverage, answering “None of the above” to the question about access to other forms of minimum essential coverage. But remember, to be in compliance with the ACA, you have to accept your employer’s coverage at your company’s next open enrollment period and drop your Covered California coverage at that time.

Question: If my spouse and I each have different needs insurance wise, are we each able to select our own separate plans or must we sign up for the same plan?

Answer: The paper application (page 25) has always had the option for separate selections for each family member. There is no way to do it online. Some have said that a Call Center Rep can do it over the phone, but the outcome is unsatisfactory because the subsidy cannot be distributed properly.

No Invoice?

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Question: I enrolled in Blue Shield Silver PPO 7 days ago and have an applications number and a case number. Have not received invoice from Blue Shield. I called them and they said they have no record of my case and to call Covered CA. I called many, many, many times and they do not answer their phones nor do any of there Certified Counselors answer their phones either. Help!

Answer: It could be that your application data is still “in transit” between CC and Blue Shield. I would check to make sure your CC online account to see if your online application is complete. Login and click on the “Eligibility” tab. You will see a summary of your eligibility status for CC coverage, APTC, and CSR. If that looks OK, click on the “Enrollment” tab and you should see the plan you selected. If your Covered California online application is complete, continue checking with your carrier until they have it in their system. Call your agent if you don’t understand what the heck I’m talking about.

Question: My two sons had been on Healthy Families, their annual review is this month. I submitted proof of income and now received a letter requesting proof of property, and then another stating they have been approved for medi-cal with a $4800 share of cost. Should I not submit the info. they requested and just apply through Covered CA? ( I’m applying for coverage through CC for my husband and myself and the calculator shows they qualify for medi-cal). I’m worried if I complete the annual review we’ll be stuck with that share of cost.

Answer: Right. Ignore the proof of property request from Healthy Families and apply through Covered California for the whole family. The kids will be on Medi-Cal but your assets will not be considered if you apply through CC.

Pay Premium with HSA?

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Question: Can a person make payments of premium of ACA plans through its health saving accounts and claim deduction of its share of premium?

Answer: No. HSA funds cannot be used to pay premiums. HSA withdrawals are not taxed if they are used to pay for qualified medical expenses that does not include insurance premiums.

Question: Is there a tax penalty for opting out of pediatric dental? We have one 2 year old and a baby on the way. We bought the whole family insurance on the exchange but it did not come with pediatric dental. The add-on PPO dental plans are very expensive for what they include and our beloved dentist does not take any HMO plans (which are the cheaper options). It seems it would be far less expensive for us to pay for dental check ups out of pocket than to buy the insurance… at least for the next few years while the kids are very young.

Answer: Insurance works best and rates are lower for all, if everyone is in the pool. That’s the reason behind making pediatric dental mandatory. There is no penalty for not taking it, but you will not be able to get medical coverage without it if you have a child under 19.

Unmarried Parents Household?

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Question: We have a son that is not currently covered, are never married parents living together. Do we have to include both incomes in the household? Or just the head of household?

Answer: It depends on whether you file taxes jointly. Remember, "if you file together, you buy together".

CC Application Pending?

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Question: I submitted my prior year taxes, which do not reflect current income (had some stock sales) but I appended an explanation in the comments. My verification is “pending”. However, it says all documents must be submitted by 12/23 and I don’t know if they need anything else since they have not reviewed it or contacted me. Is it okay to just wait and see what happens for APTC and CSR as long as I attempted to provide supporting documents?

Answer: If your application is “pending” it’s because it’s not complete, not because of verification issues. Login and see what you need to do to complete it. If you need help call one of the agents in our Find-a-Pro Directory. It’s not because they don’t like your verification efforts. I can safely say that the documents you’ve submitted so far won’t be looked at for some time. You actually have 90 days from the date of your application to submit verification documents and you can be covered in the meantime.

Subsidy Without Income Verification?

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Question: Covered CA has a paper app that does not include income info(online you click that you do not want help from the government). If a person bypasses the income information but applies thru Covered CA…can they still qualify for a tax credit at end of the year if their income was such that they would have qualified for a subsidy?

Answer: No. They must provide income information (and verification if requested) in order to be eligible for the tax credits retroactively. So, the long form of the paper app would be required in order to keep the option for tax credits.

Question: Can a senior citizen who is paying for Part A of Medicare because he has not worked in the US cancel Medicare and sign up ACA to take advantage of qualified subsidy?

Answer: This question was answered earlier in the CAHBA Q&A Forum by Premier Agent Max Herr. He is Max’s unedited answer.

Courtesy of the PPACA, persons age 65 and older are now required to enroll in Medicare unless covered by another health plan (generally employer-sponsored). As a result, no one over age 64 is eligible for premium tax credits regardless of income.

The exception to the Medicare enrollment is based on residency. Legal immigrants over age 65 are eligible for enrollment in Medicare if they have been in the US at least 5 years. Prior to that, they must obtain “minimum essential coverage” in some other manner.

Persons over age 65 who do not have fully insured status (40 credits) pay a premium of up to $426 in 2014 (less than 30 credits, the premium is reduced for persons with 30-39 credits). Failure to enroll in Medicare Part A when first eligible (at age 65 for most, or when the five-year residency threshold is crossed if later) means a 10% premium penalty for twice the length of time a person was not enrolled in Part A.

The Part B premium penalty remains a lifetime penalty. The 1% per month premium penalty for Part D is also a lifetime assessment.

So the temporary solution for this German couple, if they have not been in the US for five years is to obtain any form of minimum essential coverage. Once eligible for Medicare Parts A and B, the monthly cost, even at the maximum of $426 for Part A + $104.90 for Part B, is likely to be a lot lower than a Gold plan for a 64-year-old (or older) person.

At $75,000 income, they are well below the joint MAGI threshold for a Part B premium “enhancement”.

Life Triggering Event?

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Question: In final disclosure when purchasing plan, it states that I can’t change plans unless a life triggering event occurs. Does this mean I am wedded to this plan forever or just for the year. Also, what constitutes a “life triggering event”?

Answer: I believe you are referring to a “qualifying event”. Conception would be a “life triggering” event. Just kidding. There are certain qualifying events that must be met in order to be eligible for special enrollment (outside open enrollment) in Covered California. The length of the special enrollment window is 60 days after the qualifying event. If you do not meet one of these qualifying events, you must wait until the next open enrollment period. Here is a list of qualifying events that will trigger (there’s that word) a special enrollment.

  • Lose Minimum Essential Coverage;
  • Gain a dependent or become a dependent;
  • Become a U.S. citizen, U.S. national or lawfully present
  • Cancellation or lapse of coverage in a Covered California is unintentional, inadvertent, or erroneous as a result of an error, misrepresentation, or inaction of Covered California or Health and Human Services.
  • Covered California substantially violated a material provision of its contract in relation to the enrollee.
  • Become newly eligible or newly ineligible for advanced premium tax credit (subsidy) or has a change in eligibility
  • Employer-sponsored plan will no longer be affordable or provide minimum value.
  • A permanent move
  • Recently released from incarceration.

Insure Child Only?

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Question: I want to sign my son up for child only insurance. i cannot find any information on how to do this on this very confusing site.

Answer: Create an Covered California account, list all household members, all members except child decline coverage.

Can I Switch Insurance Company?

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Question: I have completed the CC application process and have selected Anthem Blue cross Silver. Is it too late for me to switch to Blue Shield?

Answer: No. You can login to your Covered California account, withdraw your application, and select another carrier’s plan. You can do this anytime within the open enrollment period.

Mid-Year Household Change?

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Question: My son will graduate from college in June 2014 and expects a full-time job with employer health care. How will this impact my family’s eligibility for ACA subsidy that we otherwise will meet.

Answer: It is your responsibility to notify Covered California when your son has coverage. Covered California will recalculate your subsidy at that time. If your son files his own income tax return in 2014 and you do not claim him as a dependent. You will continue to pay your same “fair share” of the premium for the remaining household.

Fair Share?

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Question: If you look at the income chart on CoveredCA, it looks like a household of 3 will qualify for a subsidy as long as their household income is under $78,120. But only one family member of the household needs coverage. According to the shop and compare tool, this family member does NOT qualify for a premium subsidy. If I recalculate and say that all three members of the family need coverage, then they do qualify for a subsidy. What gives?

Answer**: “Your fair share” of the premium is established as a percentage of your income. For a 3-person household with an income of $78,000, your fair share is 9.5% of income. That equates to about $620 per month. This number is a constant regardless of who is to be covered. If all three members of the household need coverage and the premium is $1120 per month, you’ll get a subsidy of $500 per month to cover the difference. If only 2 people need coverage, your fair share is still $620, and if the premium for 2 people is $720, you’ll get a subsidy of $100 to cover the difference. But if only one person needs coverage, your fair share is still $620, but the premium is only $300. So you pay the $300 without a subsidy.

Out-of-Pocket Maximum?

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Question: Nobody at Covered California can tell me what my out of pocket maximum would be. The website says 2250 per my income and plan choice, but when I call Healthnet directly they told me my out of pocket max could be up to 12K if I go out of network. Nowhere is any of Covered CA does it state that. What is the right answer?

Answer: Apparently your income makes you eligible for an Enhanced Silver Plan with an out-of-pocket maximum of $2250. That's a great deal. If you are smart about utilizing your benefits, you should never have an out-of-network bill of any kind much less have to worry about the out-of-network annual maximum, but the Health Net rep was right, you would have to spend $12,000 out-of-pocket before you are covered 100% out of network.

Can Over-65 Get PPO Off-Exchange?

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Question: Could German couple 79 & 77 making $75k get any subsidies with Blue Shield PPO? would a short term plan make any sense. They’re coming from $1800/mth Health Net 3000ded PPO.

Answer: Based on their income they are not eligible for subsidized coverage in Covered California. I suggest they shop for replacement coverage off-exchange. They can get better coverage with Blue Shield or any carrier including Health Net for less money.

Question: I am at the last stage of the enrollment process and for some reasons I receive a message - “Your enrollment could not be processed at this time. Please try again later.” I have been trying for 3 days now and the problem still remains. Two of my friends also have the same situations. We all choose Blue Shield Silver 70 PPO. We are not sure this is a Covered CA technical issue or Blue Shield related.

Answer: This is definitely a Covered California issue, not Blue Shield. Despite the error message, if you were able to select a plan, it is quite possible that your application is complete. Check with Blue Shield at 855-836-9705.

Question: How and when will I be notified by my insurer in order to make the first premium payment? My Covered California registration for Anthem BC Silver is complete. It says my first premium payment is due December 26. Will Anthem mail me an invoice, or will they contact via email? Since there appears to a noticing backlog to insurance carriers, will the payment date be extended?

Answer: Yes. The initial premium payment deadline for January 1 coverage has been extended to the second week in January. I recommend calling Anthem customer service at 866-820-0765. If you are in their system, they can take your premium payment online.

Covered for 90 Days?

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Question**: If I applied for Covered Ca and came back pending verifications for either Magi or APTC and am told to wait for a letter in the mail. Is it true that I am eligible and covered for the first 90 days and if verifications are not submitted I can will be discontinued?

Answer: Yes. You are approved for APTC for 90 days of coverage. APTC beyond 90 days is contingent on providing the requested income verification.

Will I Have Coverage January 1st?

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Question: Considering that Blue Shield does not know that I selected them as my insurance carrier, what happens come 1.1.14 for those of us who have completed all we’re supposed to do on our end? Hopefully there are no medical issues in early January but with not a lot of time remaining to receive an acknowledgment notice from BS and premium statement to make a payment by the 1st ~ where does that leave us “if” we do need medical services come 1.1.14?

Answer: Although I believe Covered California will find some way to make sure everyone who applied on time is covered on January 1st, nobody can guarantee it at this point. Claims can be handled retroactively if necessary.

Plan Selection Deadline?

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Question: My eligibility results say this: “You must choose a health plan by December 07, 2013.To choose a health plan, click the “Choose a Health Plan” button below.” I do not understand why I have to choose a plan by Dec 7th. I thought the deadline for coverage to start on Jan 1 2014 was Dec 23rd. If open enrollment lasts until March 31st why do I have to choose by Dec 7th? If I don’t will I lose my chance to enroll in a plan for 2014?

Answer: Upon conditional approval, you are given 30 days to select a plan. (That may account for the first date - Dec. 7th). By design, 30 days was thought to be more than enough time to select a plan. Now that the application deadline for January 1, 2014 coverage has been moved back to December 23rd, a person applying today has 16 days to select a plan and complete their application. A plan must be selected before your application data can be forwarded to the appropriate insurance carrier - Anthem, Kaiser etc.. It’s the carrier’s responsibility to collect your initial payment, so they’d like to have that done ASAP. It was intended that your coverage would not start until you had paid your first premium. Given the first month or so of the open enrollment period was FUBAR, the date for collecting the initial premium for 1/1/14 coverage was extended into the 2nd week in January. So, yes you can drag your plan selection to Dec 23rd and be officially covered on Jan 1 (though I don’t know why you’d want to create that kind of stress), but don’t expect to get your insurance card until late January. If you do not complete an application by March 31st you will lose your chance to be covered in 2014.

Question: Can I purchase a qualifying “metal” plan outside of CoveredCA (e.g. directly from a carrier or through a broker) for 2014 and claim a premium subsidy when I file 2014 taxes in April 2015, if my 2014 MAGI qualifies me for a subsidy? May I retroactively claim at 2014 tax filing time a rebate on overpayment of other expenses (copays, deductibles, etc.) on Enhanced Silver plans, if my 2014 MAGI would have qualified me?

Answer: No. A person cannot retroactively qualify for tax credits on a health plan purchased outside of the Exchange. The exchange determination of subsidy eligibility entails more than simply verifying income, for example there’s residency, household size. and employment status as well, things the IRS can’t do as part of your tax return.

Refuse Agent Delegation?

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Question: In terms of paper applications submitted to Covered CA by agents; if the agent doesn’t accept the online agent delegation, will Covered CA still process the application for the applicant minus the agent? We are loosing confidence in CC, and are considering our options including cutting ties, but want to make sure our clients applications are properly processed.

Answer: If you submitted a paper app for a client and then refuse the delegation online, you would be doing your client a great disservice. There’s no telling how long that application would remain in limbo if you refuse to enter it online. Not matter how you feel about Covered California, you know you have to put the client first.

Doctors On and Off-Exchange?

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Question: Some of the doctors listed on Healthnet site say they are only on the ON - exchange Bronze PPO plan, but not on the OFF exchange Bronze PPO plan which is more expensive and the same coverage. Can Healthnet have a distinction of doctors covered if you buy the same exact plan just off the exchange?

Answer: No. Health Net’s provider network for any given plan is the same on-exchange and off-exchange. That’s true of all carriers that are part of the exchange. The provider network issue is like quicksand right now. There’s no solid ground on which to make a decision because carriers are still inn negotiation with medical providers to fill out their networks and like most negotiations, they come down to the wire - Dec 31st. The networks that the carriers are presenting to the public are confusing too. You could be looking at Health Net’s current provider directory and comparing it to their 2014 directory. You can’t get reliable information from your doctor either. For example, you doctor says they are in the on-exchange network, but not the off-exchange network. Do they even know what on-exchange and off-exchange means. They could be comparing their small group network with their individual network. It may be February or March before the providers networks are resolved to the point that a consumer can make an accurate comparison between provider networks among carriers in the individual marketplace. Until then it’s a crapshoot.

Wait for Subsidy?

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Question: With variable investment income, I decided not to wait for income verification. If I pay the full premium thru 2014 and then my 2014 Income Tax Return is below the income level, can I receive the subsidy on a retroactive basis?

Answer: Yes. In fact that would be the ideal way to handle your variable income issue.

How to Handle Paper App Backlog?

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Question: I have submitted over 100 paper applications by mail and fax since Oct 1st. I have yet to get confirmation or any other response from Covered California. What can I do?

Answer: You should start seeing them as new delegation notices in your agent account on Covered California in the next day or so. Covered California staff are are creating online accounts for applicants who already submitted paper applications. All CC is doing is creating the account and delegating the writing agent. The agent will have to complete the applications online from their copy of the paper application. A Covered California spokesperson told me that if delegation notices are not showing up in an agent’s portal by Friday morning, “agents should create a new account for that applicant and enter the entire application online”.

Question: We applied on the CoveredCA website on November 1st and still have not received an invoice from Blue Shield. Should we contact Blue Shield directly or what other actions should we take to determine our status. Covered CA website indicates that our enrollment is complete.

Answer: Covered California has yet to install a working data link to the carriers to transfer applications to them. The carriers get a report from CC on the number of applications processed for them, but CC has yet to send application one. So in your case, Blue Shield does not know that you have applied, much less be in a position to confirm your coverage and send you an invoice. This will get resolved eventually, but it’s a huge bottleneck, particularly because so many paper applications have been submitted.

Don't Want Kids on Medi-Cal?

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Question: I have clients whose kids are ending up on Medi-Cal, but because they are attending college outside the state, they don’t want Medi-Cal. Is there a mechanism by which they can have their kids on their plan and avoid Medi-Cal? Covered California suggested calling the County and refusing Medi-Cal, but most counties have no idea what I’m talking about.

Answer: The family’s household income must exceed 266% of FPL (approximately $52,000 for a 3-person household or $64,000 for a 4-person household) for a family’s kids to qualify for a subsidy in Covered California rather than Medi-Cal. If your 2014 income estimate is under that threshold, the kids cannot qualify for a subsidy in Covered California and are expected to enroll in Medi-Cal. If that is unacceptable for any reason, I think the best way to avoid it is simply not to apply for Medi-Cal for the kids. They can purchase their unsubsidized coverage either in Covered California or off-exchange directly from a carrier. In this example, there is a potential advantage to purchasing through the exchange. If the household income ends up being greater than expected and places the family over the 266% FPL threshold after all, then the family would receive additional tax credits retroactively for the portion that was not advanced for the kids in that tax year.

Question: Has Blue Shield re-priced their Exchange Plans? A month ago their Platinum (aka Ultimate) PPO was $1631/mo. That price was the same, in and out of the Exchange, and was the price quoted to me within Covered CA when I submitted my application. Meantime, I log into Covered CA and guess what - that $1631 is now $1777. It’s still $1631 on the Blue Shield site for the regular market. What’s up with that?

Answer: Blue Shield did not raise its 2014 rates. The first rate adjustment will be 1/1/15. Covered California rates can differ from off-exchange rates in some cases, but that usually involves pediatric dental and if so the off-exchange rate would quote higher not lower. I’m cannot account for the results you describe. Include your email address and personal information - age, zip, number of family member - for a more specific answer and send it to info@cahba.com.

Question: My estimated AGI (2 person household) for 2014 is $20,000. In 2012 I cashed out of an annuity and had an AGI of $70,000. I was considering cashing out of another annuity in 2013 which would lead to a similar AGI. Can I obtain the reduced rates (AGI $20,000) for my 2014 premiums? What's the best way to proceed?

Answer: Since your estimated 2014 income is way less than the 10% allowed without verification, your best option is to submit an affidavit explaining that you will not be cashing out another annuity in 2014. You should also submit documentation showing the annuity income. Feel free to cash another one for the 2013 tax year. It will not affect anything at this point. If you do so, you will probably have to do this again when you renew for 2015 to explain why your income in 2013 if higher than your 2015 estimate.

Question: I read an article in USA today advising that people who do not qualify for subsidies were finding it easier to shop on authorized web-based agent sites. I took a look at www.cahba.com and found 11 CIGNA plans which are bronze/silver/gold compatible, but are not on CoveredCA. They are more expensive than Blue Shield's 2014 plans, but they appear to have the broadest choice of providers I have seen offered. Why are these CIGNA plans not on CoveredCA and is there any danger of being deemed not to have MEC if I buy one?

Answer: Health insurance carriers had to apply and compete to be accepted as qualified health plans offered by Covered California. CIGNA chose not apply, so their plans cannot only be offered off-exchange. However, CIGNA plans offered after January 1, 2014 must be ACA-complaiant. So there is no danger of them not having minimum essential coverage. You are right on about there being no advantage to consumers who are not subsidy eligible to buy through Covered California. In fact, there are more advantages to shopping off-exchange and dealing directly with the insurers. For example, there are more choices off-exchange, like CIGNA plans, and the application process takes only a fraction of the time it takes to enroll through Covered California.

Question: The Covered Calif. application says “Person 1: Has this person been offered affordable full-coverage health insurance for January 2014?” What is the definition of affordable? Will people who answer yes be denied a subsidy?

Answer: People who answer that question “yes” will generally not be eligible for a subsidy in Covered California. To be deemed “unaffordable”, the coverage offered costs an employee more than 9.5% of the annual household income.

Question: In order to prove that I qualify for premium assistance, I had to upload evidence of my income. I uploaded the required documents a couple weeks ago. How long does the verification process usually take? Should I go ahead and “check out” with a health plan even though I don’t know how much premium assistance I will be getting?

Answer: You can safely assume that you will be getting the subsidy for which you were conditionally approved. Go ahead and select your health plan. Covered California could take up to 90 days to “verify” your income estimate for 2014.

Conditionally Eligible for 90 Days?

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Question: My wife & I are retired; most of our income is from investments. We received notification today from CoveredCA that we were approved for only 90 days of coverage until we show proof of income. But we don’t know how to show proof of income, since our 2014 income will be considerably lower than our 2012 or 2013 income. (This is because we had been converting portions of our traditional IRAs to Roth IRAs, artificially raising our income each year.) What are we supposed to do to “prove” our 2014 income? Thank you!

Answer: There’s no app for that :-) I suggest you write an explanation in a bit more detail than you have above and include any documents that back it up - e.g. IRA withdrawals and Roth deposits . If they are not satisfied with that, let them request something specific.

Question: Can I apply for a Children’s Dental plan on the Covered CA site or do I have to call the dental plan company directly? I do not see where to do it on the CoverCA site.

Answer: Covered California just added pediatric dental plan selections to the online and paper applications. You’ll find the “Choose Pediatric Dental Plan” and “Choose Health Insurance Plan” on Attachment D. page 25 of the Single Streamlined Application and in in the enrollment section of the online application.

How to Buy Dental Plan for My Child?

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Question: I would like to sign up for the Delta Dental PPO plan listed in the CovererdCa Dental Plans for Children document. I called Delta, they said they don’t sell it. How do I apply for this dental policy?

Answer: Delta Dental is one six selected companies including Anthem, Blue Shield, Health Net, LIBERTY Dental, and Premier Access Dental - offering dental plans in covered California. You can select Dental Dental’s plan on your Covered California health insurance application either online or by paper application. The dental plan selection was added to the applicaqtion very recently.

Can I Stay on COBRA?

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Question: I enrolled in COBRA when I was laid off from my previous employer in September, 2013. I have received a letter from the insurer stating that my policy will not be available after December 31 as it does not meet new federal requirements for 2014. Employees will be offered a choice of new plans to chose from for 2014. Will I be able to chose from one of these plans as a prior employee with COBRA coverage until my 18 months of COBRA coverage expires? The current premium with COBRA coverage is less than any of the quotes I have received from the current market exchange offerings.

Answer: Yes you can stay on COBRA if you prefer, but you will have to reevaluate your decision once you see the premium for the new ACA compliant group plan you are offered. The rate will probably be higher than the non-compliant plan.

Question: I have been told by Blue Shield that I will be able to stay in it until March 31 2014. The new Bronze HSA plan is 50% more expensive for almost identical coverage to me, so I plan to want to stay in the existing plan. However, as I read the IRS website, that means I could be liable to paying the “individual shared responsibility” penalty for the first three months of 2014, which at my income level would more than offset the premium savings. Can you please clarify whether I would be liable to the penalty or not?

Answer: No penalty. You get transition relief from the shared responsibility payment because your coverage ends in 2014. The transition relief begins in January 2014 and continues through the month in which the 2013-2014 plan year ends, March 31st in your case.

Grandfathered Plan Rate Increase?

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Question: If someone has a grandfathered individual plan, will the rates be locked in till open enrollment next year or can they have increases mid year that may be unfavorable? Which means the client is locked in till open enrollment or does that open a window to make a move to another option?

Answer: Your grandfathered plan rate is only locked in until the policy renewal date, which is the anniversary of the policy”s original effective date of coverage. If that date falls outside off an open-enrollment period, you cannot choose to change plans regardless of the rate increase. That is not a qualifying event. You will not be able to change your plan until the next open enrollment period - Oct 15 to Dec 7 of that year.

Premium Subsidy for Retiree?

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Question: An earlier response here (from Oct.) indicated that retirees under age 65 who are eligible, but not enrolled in employer-sponsored coverage, can obtain premium subsidies in 2014 to purchase coverage through the CA exchange, even though they have access to a employer-sponsored health plan. I would like to take this approach. (I’m 62 and on a retiree plan for 2013 that I can continue next year if I wish. Instead, I’m contemplating a switch in Jan. to a plan on the CA exchange & planning to get a subsidy.) However, in registering, the website asks if I “have or have been offered affordable, minimum standard value health insurance for 2014?” The answer to this is “yes”, but someone at coveredca told me on the phone that if I answer “yes” it will disqualify me from any subsidy. I believe I’m entitled to the subsidy, but it appears the website will not allow it. What can I do?

Answer: If you have access to affordable employer-sponsored coverage, even for retirees, you are not eligible for as subsidy. Look at it this way: since your former employer offers you a group health insurance plan to which they contribute at lease 50% of the cost of coverage, you already have “subsidized” health insurance. Federal subsidies are for people who do not have that option.

Household Size with College Student?

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Question: My son is away at college in New York. I claim him as a dependent on my taxes. He also earns enough to file his own tax return. I would like to purchase a policy for the two of us with subsidies through CoveredCA. Can I do that? Do we report our incomes separately?

Answer: Think of your household as everyone in your tax family. Your son at college in New York, whom you do claim on your taxes, is considered part of your household. And if that son happens to hold down a part-time job while attending school and earns enough money to file a tax return, you’ll need to include his earnings as part of your total household income. So you can purchase a policy for the two of you through Covered California. Your eligibility for premium assistance and cost savings reductions will depend on your aggregate income for a household of two.

Question: I have signed up some clients with incomes that qualify them for Medi-Cal. Since we will receive a $58 commission, I have continued the application process. When I look on my individual listing for these clients they show as “ineligible”. Does this mean they are ineligible for a subsidy? Also, will the application be forwarded to Medi-Cal?

Answer: Yes. If the applicant’s income makes them Medi-Cal eligible the application will be handed-off to the county for further processing. The “ineligible” tag you see in your CC agent account means the applicant is ineligible for Covered California coverage. If your client designated you as agent of record you “should” eventually get your one-time $58 sign-up fee.

Why Are Rates Higher in Northern CA?

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Cost Comparison by Regions.jpg click_image.png

Question: Rates are considerably higher in the northern part of the state than in SoCal. What’s up with that? I understand San Francisco being higher because everything is costlier there, but even the rural areas of the north counties are pricier than LA and Orange County. Can you make sense of it?

Answer: In a nutshell, it’s about population and competition. More population means more hospitals, large medical groups and other providers. That means more competition with more providers willing to contract at lower rates to get a leg up. That translates to a 48% difference in premium rates between San Francisco and Los Angeles for a 40 year old buying the 2nd lowest priced Silver Plan - $373 vs $252.

Why are Networks Restricted?

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Question: There has been much talk about restricted provider networks in the Covered California plans. If the plans have to be the same as those offered outside the marketplace, how are they restricted? Or all all individual plans restricted in comparison to group plans? Can you shed some light on this subject?

Answer: Individual plan provider networks have been "narrowed" for 2014 as a way of controlling costs. That's because a smaller number of medical providers are willing to agree to lower contract rates. Carriers who offer qualified health plans in the exchange must "mirror" those plans (including networks) outside of the exchange, so the individual plan networks are identical in the exchange and off the exchange. Group plans will generally have broader networks than individual plans, if not the same as pre-2014.

Who Sets Prices?

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Question: Does the ACA set prices for procedures etc or are insurance companies allowed to charge anything? Also, which insurance company has the best record for not overcharging for procedures?

Answer: The ACA does not set prices for medical services, nor for that matter does the law set health insurance rates. Insurance companies negotiate with health care providers - doctors, hospitals, etc.- to set a contract rate for each medical procedure or service. There is considerable variance in medical costs between insurance companies for the same service or procedure and also between providers within the same insurance company network, because negotiated contract rates are lower with some providers than others. There is no transparency for the consumer in this system so there is no way to compare the contract rates among carriers.

Continuation of Non-ACA Policies

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Question: I got a letter from Blue Shield that my existing policy would be terminated Dec 31st 2013, and I would be switched over to some new bronze ACA plan for the next year. A few weeks ago I received another letter and that states my current policy can continue until March 31, 2014. What is the significance of March 31st deadline? Has this something to do with the administrative directive Obama administration issued regarding individual mandate? The above letter was before the more recent development of the administration allowing non-ACA policies to continue till the end of the year. In light of that, should I expect yet another letter from BlueShield extending the current policy until Dec 31, 2014?

Answer: It is possible that Blue Shield will extend current non-grandfathered plans for another year. If so that would be a result of the recent mea culpa announcement by President Obama. The initial Blue Shield extension was ordered by the Department of Insurance because Blue Shield allegedly did not give policyholders sufficient notice of cancellation.

Covered Care & AGI

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Question: I’m having a hard time understanding how to enter my income on the Covered Care application. I’m self-employed, so my monthly salary does not include withheld taxes (I pay those quarterly). On the Covered Care application, if I enter the amount of the monthly check I receive, it looks like my salary is greater than it really is. There is no place on the application to enter a yearly AGI. Should I divide my AGI (line 37 of my income tax) by twelve, to show the monthly salary I actually end up keeping? And also, because I have a home office deduction, and there is a place on the Covered California application to list self-employment deductions, am I supposed to enter that amount on the application? Thank you. I’ve tried e-mailing Covered Care, but they still haven’t answered my questions. (You can click the chart to enlarge it.)

Answer: Yes. I think your idea of estimating your AGI for 2014 then dividing by 12 is a good way to report your income on a monthly basis. Perhaps this chart will help to deterring what part of your income counts toward AGI. (You can click the chart to enlarge it.) MAGI Chart.jpg

Get Subsidy From My Carrier?

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Question: In case a participating carrier cancels an existing plan as it does not comply with ACA and offers different plans that comply with ACA to insured, are those offered plans same or different from the plan offered under Covered California. Is the insured entitled to premium assistance and cost sharing help If the insured buys directly from the carrier?

Answer: Insurance companies who participate in Covered California (Anthem, Blue Shield, Health Net, Kaiser), must offer the identical plans off-exchange though you’ll find they use different plan names off-exchange (just to add a bit more confusion). You can select an on-exchange, Covered California, plan from one of these participating carriers after you have enrolled through Covered California and are eligible of a subsidy and / or cost sharing help.

How Do I Submit Proof?

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Question: After 45 days of working my way through a minefield, I was finally able to choose a health plan today and get a confirmation printed out. However, the way I understand it, I will have to submit proof of US citizenship for myself and my wife, either by uploading the documents or by mailing them in. I can’t find the online link anymore, so what would you suggest me to do?

Answer: Try logging in to your Covered CA account and check your “Secure Mailbox”. CC will send a formal request for proof of citizenship, including the reason for the request, examples of the types of acceptable proof and instructions on how to submit it, and your appeal rights. CC does not correspond by regular email for privacy reasons. Unfortunately, they don’t explain this sufficiently and secure mailbox messages go unnoticed.

Question: I just kind of wonder whether I will be able to keep my current non-ACA Anthem Blue Cross insurance plan until the end of 2014 after Obama's announcement today.

Answer: President Obama announced today that he (the federal government) will not require insurance companies to cancel ACA non-conforming individual plans on Jan 1, 2014, but would allow them to continue through 2014. Effectively, this presidential gesture passes the decision to cancel or not on to the insurance companies participating in the federally facilitated exchange. Here in California, where more than 900,000 cancellations have been sent out, Insurance Commissioner Dave Jones called on insurers to extend the policies being scrapped. Neither Obama nor Jones will have the final say, because Covered California requires insurance companies to cancel non-grandfathered health plans on 1/1/2014. The next CC board meeting is scheduled for November 21st and they will probably discuss the option to reverse the cancellation mandate for 2014. It seems unlikely, in my opinion, that they will overturn their mandate. It would cause chaos in the marketplace and they believe that the roll-out is going OK here.

Over 65 No Medicare or Medi-Cal?

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Question: I understand that seniors (new immigrant) over 65 without medicare or medicaid can purchase insurance through exchanges. I assume they won’t be able to get any federal subsidies, right? So should they actually purchase through off exchanges?

Answer: The immigrant you describe would be eligible for a subsidy in Covered California if income is under 400% FPL if “legally present”.

Question: I applied to Covered Cal and am eligible for Medi-Cal in 2014 (just under the income limit). I received nothing for a month until the county uDPS office sent me a note wanting income and residency proof. Is CC forwarding all Medi-Cal apps over to counties and are the county agencies not able to access the Federal Data Hub for verification info?

Answer: Correct. Medi-Cal eligible applications pass through Covered California to the County Office of CA Dept of Health Care Services. Access to the Federal Data Hub may or may not be working right now, but it would be typical to approve an applicant conditionally until proof of income and residency is received.

Anthem BlueCard Access Out-of State?

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Question: In your answer to a question about getting coverage in FL or CA, there was mention that Anthem Blue Cross would not be honoring Blue Card for ACA-compliant plans. However I looked in the brochure for both the on exchange and off exchange Anthem Blue Cross plans and they both mention Blue Card access (Page 4 of PDF mentions accesss to Emergency and UrgentCare coast to coast using BlueCard. Could you clear up the discrepancy?

Answer: Here is the quote from the brochure to which you referred: “When you’re traveling for work or on vacation, going to the ER or urgent care is probably the last thing you want to happen. However, our plans cover emergency and urgent care in every state through the Blue Cross and Blue Shield Association’s BlueCard® Program. This means you and your family have emergency and urgent care coverage from coast to coast.” The fact is that the Anthem Blue Card formerly covered non-emergency care from any BCBS network provider in another state for the same benefit coverage as if the cardholder were in-network in their home state. I would say that Anthem is a bit disingenuous in stating this as an extraordinary benefit since out-of-network emergency care is covered by all plans.

Question: I got notified by Anthem that my plan is canceling on Des 31. I’ve been trying to apply for a new plan at Covered California. So far I have been able to find out that I am not eligible for tax credits and that’s about all. I created an account, but I don’t see why I have to give them my financial information if I know I won’t get a subsidy. Is there another way?

Answer: Without a subsidy, there’s no compelling reason to enroll on the exchange. You should shop for off-exchange plans where you’ll have more plan options and the process is 3 times faster and you won’t be required to disclose your financial information. You can shop and compare off-exchange plans in seconds o this website. Your licensed insurance professional can also provide you with an off-exchange quote, advise you on plan selection, and make your enrollment easy. See Covered California is Not for Everyone

Question I have not been able to find out how the Medi-Cal eligible kids are being handled. An organization that I am working with was instructed by Kaiser to include a denial letter wit the application, if the kids qualify for Medi-Cal. I have not been able to get any information on the plans, who qualifies or what to do with all these kids.

Answer: In California, the income limit for adult eligibility for Medi-Cal is 138% of Federal Poverty Level (FPL) and for children it’s 266% FPL. That’s why you can have parents eligible for a CC subsidy while the kids are eligible for Medi-Cal. If the kids are eligible for Medi-Cal a “denial letter” won’t work. If they pass on Medi-Cal when eligible, they cannot be eligible for a CC subsidy. As for how to handle it? Complete a Single Simplified Application for the family and let CC sort it out. Medi-Cal Expansion Chart.jpg

1099 for Subsidy Income?

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Question: I heard that individuals will receive a 1099 from the Federal govt for any tax credits and/or subsidies they receive and will have to report it as income for state and federal tax purposes. Can you confirm?

Answer: No. The advanced premium tax credits (“APTC”) and cost sharing reductions (“CSR”) are not types of income and therefore are not likely to be reported on a form 1099. However, it is likely that qualifying individuals will receive a statement at tax time reporting any subsidy received. This statement will be used to help reconcile the APTC received (based on estimated income) with the APTC that should be received (based on actual income) at tax filing time. The APTC/CSR are not considered income and are not taxable regardless of how they get reported.

Thank you Steven C Stasoiski, Health Insurance and Tax Professional from Seal Beach, CA for this answer.

Risk Adjustment and MLR?

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Question: The insurance companies do not have any history with the exchange and are probably guessing the risk-profile of the customers. I understand that there is some mechanism built-in to make them whole if they guess wrong and lose a lot of money. (please correct me if I am wrong). My question is, if they find that they were too conservative and make too much profit — i.e. spend less than the stipulated percentage in patient care — are they still forced to give it back. Will it be refunded to the individuals, or to the government, or split equitably based on the subsidy amount.

Answer: The ACA law includes a “risk adjustment” provision that provides a behind-the-scenes mechanism to correct for market imbalances that occur if some insurers attract pools of subscribers whose expected medical costs are substantially greater or less than market-wide averages. It helps to accomplish this by subsidizing insurers that end up with a disproportionate share of high-cost patients and assessing competing insurers that — either through strategy or happenstance — end up with a better selection of health risks. Conversely, there is no mechanism to recover revenue from an insurer who does a better than average job of risk assessment. There is however and Medical Loss Ratio (MLR) regulation in the ACA that requires health insurance issuers to submit data on the proportion of premium revenues spent on clinical services and quality improvement. It also requires them to issue rebates to enrollees if this percentage does not meet minimum standards - at least 80% or 85% of premium dollars on medical care. If they fail to meet these standards, the insurance companies are required to provide a rebate to their customers.

Question: Not knowing what my income is from year to year, I could estimate my income to be lower than the actual amount. If it turns out the IRS says I owe them money because they paid me too much subsidy, will I also be charged interest, penalty, or fine?

Answer: No. There is no penalty or interest, because the IRS will recover the subsidy overpayment as part of your federal tax payment for that tax year. it would not be overdue.

Question: If someone has a giant loss carry forward, like 500K, it’s going to take a while for that to no longer show on line 37. So would that person virtually be on Medi-Cal forever, or for subsidy eligibility, do loss carry forwards only count in the year in which the loss occurred?

Answer: Loss carry forwards do not only count in the year in which the loss occurred. There are two types of loss carry forwards and I am not sure which one you are referring to. A net operating loss (“NOL”) can be carried forward to offset future operating income for up to 20 years following the NOL year. A capital loss can be carried forward to offset capital gains or reduce ordinary income by a maximum of $3,000 per year indefinitely. As such, a NOL carry forward like $500,000 could count for 1 or 20 years whereas a capital loss like $500,000 could count for 1 to 167 years. Both types of loss carry forwards reduce a household’s modified adjusted gross income which is used to determine subsidy eligibility.

Thank you Steven C Stasoiski, Health Insurance and Tax Professional from Seal Beach, CA for this answer.

Enrollment period

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Question: Obamacare tutorial says,”If you don’t sign up for the subsidized plan during the initial open enrollment period—-October 1, 2013 to March 31, 2014—-you will have to wait three years before you can enroll into a subsidized plan unless you have a qualifying event. Since the law will require you to have coverage, you will need to shop on the open market or at a private exchange.” Does it mean that you shall have to wait for three years if you miss the current enrollment period of March 31,2014?

Answer: You’ve got a very misleading tutorial. If you miss the initial open enrollment period ending March 31, 2014. You will have to wait until the next open enrollment period starting October 15, 2014 for coverage effective Jan 1 2015.

Separate Returns = No Subsidy?

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Question: What if a married couple is filing separately? Based on our individual incomes, my husband would qualify for Medi-Cal and I should be eligible for a subsidy. But the exchange told me that in order to receive premium assistance spouses are required to file a joint income tax return. Is that true?

Answer: Yes. The law says if you file as married filing separately, you will not be eligible for any premium subsidy at all, regardless of income. Only domestic abuse, abandonment, or other special circumstances (pending divorce?) may be exempted from the requirement to file a joint return in order to qualify for the premium subsidy. Reference TD 9590, IRS

What is MAGI? Revisited

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Question: What’s added back into my AGI at the end of the year? For example is my rental income, retirement account withdrawals, etc. included in MAGI.

Answer: I have received many questions like this and have answered few, mostly because I wasn’t sure of the answer myself. The problem is official web sites such as the Healthcare.gov site or IRS.gov tend to focus only on earned income and do not provide much guidance as to how to handle other forms of income or various tax deductions when it comes to calculating MAGI (modified adjusted gross income) for purposes of determining subsidy eligibility under the ACA. I can now refer you to an authoritative source. We just published an article by guest author, A. Marshall, in our News and Commentary section, titled MAGI - What It Is and What It Isn’t. Check it out and bookmark it.

I Applied. What Now?

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Question: I submitted an application 3 weeks ago to Covered California for a Blue Shield plan. I have heard nothing from either CC od Blue Shield. Should I apply again?

Answer: No. Do not enroll again. If you completed and submitted an application to Covered CA. They will need to verify eligibility for premium assistance and that will take awhile. I would suggest a follow up with CCA later in the month when they can verify eligibility. If you made a binder payment with your application, their coverage will be pending until the binder payment is processed.

Penalties After January 1?

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Question: When does the clock start on penalties for not having health insurance? Is it January 1 or March 31, 2014?

Answer: Originally, the ACA the minimum essential coverage provision stated that an individual must pay a penalty if he or she does not have coverage for more than three consecutive months in a year. But the feds just published an FAQ concerning the open enrollment period for individuals purchasing qualified health plans. The guidance states that individuals will be able to enroll throughout the entire enrollment period, which lasts through March 31 2014, and not be subject to the individual shared responsibility payment. A person enrolling after March 15th will not be covered until May 1st, well over the three consecutive months rule.

Drop COBRA for Exchange?

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Question: Can I drop my COBRA plan and buy a Covered California plan on Jan 1, 2014? If so, can I get a subsidy if my income qualifies?

Answer: A person on COBRA will not be eligible for coverage in Covered California unless their COBRA premium is “unaffordable”, that is, it fails the 9.5% of income test (read Bad News …. In that case you are eligible for Covered California coverage and also eligible for a federal subsidy if your income qualifies you. A person whose COBRA coverage is “affordable”, can drop their coverage and enroll in an ACA compliant off-exchange plan as of Jan 1, 2014.

What Happens to My HSA Account?

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Question: I currently have a large amount of money in a HSA bank account. If I choose a non-HSA plan, what does this mean for my HSA account and use of the money for medical expenses?

Answer: If you choose a health plan other than a HSA-qualified plan, you can no longer make pre-tax contributions to your existing HSA account. The HSA account itself does not change and you may withdraw money from the account to pay for qualified medical expenses on a tax free basis as well.

Household Includes Grandparents?

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Question: 40 year old and 2 kids live with both parents/grandparents. 40 year old is currently unemployed with no income. Parents do not claim the 40 year old or the kids as dependents as she intends to work again soon. The question is, are there 5 in the household or 3 if the parents/grandparents do not claim the others as dependents? If the answer is 5, are we supposed to obtain income information from the parents/grandparents even though they have nothing to do with the insurance coverage?

Answer: The mom and 2 kids apply as a household of three and use her income alone for eligibility determination. Remember this general rule, “If you file together, you shop together”.

Question: I retired early and my former company offers a group plan for retirees. I cannot aford it so I opt out. Will this keep me from getting a subsidy on-exchange?

Answer: No. Retirees under age 65 who are eligible but not enrolled in employer-sponsored coverage can obtain premium subsidies next year to purchase coverage through the exchange, even though they have access to a employer-sponsored health plan.

Question: If a person that wants to enroll on Coveredca uses a paper application, where can they indicate their plan selection?

Answer: Simon just pointed out that there is a place plan selection on Attachment D of the application. Thanks Simon.

Can't Get Medi-Cal?

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Question: I am 51-years old, a self-employed gardener and in good health. Due to pride and principle, I’ve never had Medi-Cal. According to my attempt to enroll, the Covered California website said I qualified for Medi-Cal. However, I filled out paperwork and the department informed me that I cannot get Medi-Cal, because I have a self-employed IRA. It’s only around $19. I was told to close it out. We can’t live long on that and I will never retired. The department told me that I’d have to liquidate my IRA before I could be eligible for Med-Cal. I will not. That IRA is all my wife, who is disabled and on MediCare, and I have to retire on’ if I ever could. What should I do?

Answer: Obamacare changed the Medi-Cal eligibility rules. Your assets are no longer a factor. Apply through Covered California. They use the same application, whether online or paper as for exchange coverage. Medi-Cal applicants who are going directly to county health services offices are still being put through old application process (apparently with no explanation that things will change on January 1). For verification of my answer see CA Dept of Health Services online FAQ. Many thanks to Freelancer for pointing out this source.

How to Designate Agent Online?

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Question: I heard that client can enroll online and designate a agent. Do you know where I can input agent information on client online application? I go all the way to submit but I don’t see it. Thank you.

Answer: Once your client has created an account at the exchange portal, they can login, click on “Find Help Near You”, select “Find Agents” to designate an agent. Here’s what the online designation looks like:

Agent to be Designated: “Agent Name”

I grant this Agent permission to access, enter, and update information in my online application. I further grant permission to the Agent to submit my completed application, including activating an eSignature on my behalf.

I understand that I may end my partnership with this Agent at any time through my account dashboard or by calling 1-800-300-1506.

I grant permission to the Agent to enter payment information in my online account. I understand that the insurance premium that I am quoted will be charged to my account.

Signature

Applicant Name

Applicant E-Signature

Type your full name here as your electronic signature.

Today’s Date

Question: When applying for coverage, do you claim the number of dependents on your tax return or by the number of family members that need health coverage? We are a family of four, but one dependent son is covered by a university scholarship that offered health insurance.

Answer: For the purposes of determining your eligibility for premium assistance, your household size is considered to be four persons. Your son who is away in college has “minimum essential coverage” through his school, so the three other household members get a larger subsidy based on a four-person household.

Question: Is there a minimum income level I need to meet before I can purchase a Gold plan with tax credit assistance?

Answer: No. Anyone who is eligible for premium assistance in the Exchange may apply the subsidy amount to a Gold plan if they wish.

Where Does Agent Sign App?

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Question: Step 3 on page 15 of the paper application allows the insured to choose an authorized agent. Is that where the certified agent is confirmed OR on page 18 in the Certified Enrollment Counselor/Entity section. Thank you.

Answer: Step 3 on Page 15 of the “Single Streamlined Application” (gotta love that name) is for Authorized Representatives not agents. Agents sign on page 18 where is says “Certified Insurance Agent” not counselor or entity.

Eligibility is Conditional?

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Question: I have completed the process of applying online through Covered CA. My Eligibility Results page says: “Your eligibility is conditional. To receive the Advance Payment of Premium Tax Credit benefit, you must submit the following by January 31, 2014 (1) Proof of Income (1) Proof of Minimum Essential Coverage.” So my question is two fold. About the income verification, what will be required? And secondly, what is the Proof of Minimum Essential coverage about? Thank you for being literally the only resource I have found for this type of Q&A and shared information.

Answer: Covered California already knows that your income in 2012 was significantly lower than your 2014 estimate since they are connected to the IRS data hub. More than likely you will be asked to provide current income documents like pay stubs. The minimum essential coverage requirement is proof that you have ACA-compliant health insurance on January 1, 2014.

Question: Who’s going to buy health insurance when they don’t know if their doctor takes it or not? When will the Covered California post an accurate provider directory?

Answer: Covered California will probably try to get a consolidated provider directory back online as soon as possible, but it will remain somewhat inaccurate. That’s because the exchange gets provider data form the carriers and the health plans participating in the exchange are still negotiating rates with providers and health care systems. The narrowing of networks, compared with employer-based coverage, is causing more tension than usual between carriers and providers during negotiations. In some cases, the negotiating will go on right up to the Jan. 1, 2014 starting date.

Question: How are they going to calculate the income for domestic partners? I understand if people are married, it’s going to be both salaries. But if you are not - like, we are in a domestic partnership - then how are they going to calculate this?

Answer: Usually, if you file taxes together, you shop for insurance together. Since California does not recognize domestic partnerships for opposite-sex partners (unless over the age of 62), each can apply on the exchange as an individual. Whether one or both partners qualifies for a subsidy, depends on his or her income alone.

Question: If a consumer overestimates their income in order to stay out of Medi-Cal and when they file their taxes it is determined they should have had/qualified for Medi-Cal, is the consumer penalized? Or what happens?

Answer: The consumer is liable for repayment of any excess tax credit received in the year. In your scenario, that would be the entire annual subsidy. However the amount of the”clawback” provision is limited by the household income according to the ACA law. If the household income (expressed as a percent of poverty line) is :

  • Less than 200%, the amount of the clawback is limited to one-half of $600
  • At least 200% but less than 300%, the amount of the clawback is limited to one-half of $1,500
  • At least 300% but less than 400%, the amount of the clawback is limited to one-half of $2,500.

Question: I have completed my enrollment process (on the exchange) and designated an agent and picked a plan/carrier. My question has to do with submitting income verification. The CC website says, “You can use this page to submit electronic copy of the required verification documents in order to insure eligibility… Please submit all required verification documents within 30 days.” This has me worried. Do you think the 30 day stipulation is just boilerplate and does not have to be taken seriously at this time? When I asked a Covered CA person about this, they put me on hold, tracked down a supervisor, and came back and told me that what was required would be spelled out in the Notice of Action correspondence I’d be receiving from Covered CA “sometime in November”. Should I be more proactive than just sit back and wait?

Answer: Sit back and wait a while. You actually have 90 days to meet the income verification requirement in California.

What Did I Just Enroll In?

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Question: I enrolled my husband & myself in the Kaiser HMO Bronze Plan and based on our income we qualify for a subsidy. We currently have a high-deductible HSA compatible plan with Kaiser. Is the Kaiser plan I just enrolled us in an HSA compatible plan? The deductible is very high.

Answer: The Kaiser HMO Bronze Plan has a family deductible of $10,000. It is not an HSA compatible plan. The Kaiser Bronze HSA plans are available in $7,000 and $9,000 family deductibles. The HMO plan cannot be used with a health savings account.

Any Agents Certified Yet?

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Question: Have you heard from any agents who have been certified yet?

Answer: Yes. I just started hearing from agents who are certified. Ron Herzog in Carlsbad is one of those certified. He said, “I never got an email to say I was certified. You have to sign into your Covered California agent account and then click on “My Profile” and then on “Certification Status”. Your certification number is a 10 digit number that starts with a 5 (not to be confused with your agent number that starts with a 2). Then go to the Covered California portal Start Here > Find Help Near You > Find an Agent and search your zip code or name. You should be there if your certified.

Question: As far as I know in order to buy a plan from the exchange one needs to be either a citizen or a permanent resident. Does this condition still apply to the mirrored plans outside the exchange? Can anyone regardless of citizenship status still buy the mirrored plans outside of the exchange if not a citizen or permanent resident but are lawfully in the USA (visa workers, students..)?

Answer: Yes. The rules regarding immigration status are the same off-exchange. However, the range of eligible immigration statusess is much broader than you think. The Covered California paper application contains a long list of eligible immigration statuses (Attachment E, Page 26). Here are some of the more common types.

  • Lawful Permanent Resident or Green Card Holder
  • Lawful Temporary Resident (LTR)
  • Non-immigrant status including worker visas and student visas.

Can I Keep My Plan into 2014?

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Question: Do people with existing “non-grandfathered” plans have to enroll in an ACA plan by March 31st or can they get a Special Enrollment when their plans renew after March 31st? Also can people with “grandfathered” plans get Special Enrollment if they want to enroll after March 31st?

Answer: All Carriers in the individual Exchange, chiefly Kaiser, Anthem, Blue Shield, Health Net - will end non-grandfathered coverage December 31, 2013 and migrate those members to ACA compliant plans on January 1, 2014. CIGNA is the only “big” individual health issuer in California not in the exchange, so they do not have to migrate their individual customers until their 2013 coverage expires in 2014. At that time, these policy holders will qualify for a Special Enrollment Period (SEP) if expiration of coverage is outside open enrollment. If people on grandfathered plans don’t voluntarily enroll in an ACA compliant plan before March 31, 2014, they have to wait until the next policy renewal date to to trigger a SEP.

How to Submit Paper Application?

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Question: Since all licensed agents are temporarily certified for October, we are taking paper applications. What is the fax number to submit these applications?

Answer: Licensed agents are NOT temporarily certified for October. Sorry, but I take the lions’s share of the blame for publicizing that fallaciousness. So don’t submit any business to Covered California until they notify you that you are certified and are given a unique identifying number. Fax to 888-329-3700 Mail to: Covered California, P.O. Box 989725, West Sacramento, CA 95798-9725.

Question: Does Covered California require payment with the application?

Answer: Covered California plans to accept premium payment online through a third-party that will be integrated with the CalHEERS system. They have announced that won’t be ready until January. In the meantime, enrollees are directed to carrier-specific URLs at the completion of the enrollment process. That allows the enrollee to make a payment online and provides instructions on how to make a payment offline. Carriers will send an invoice within five days of receiving the enrollment confirmation from Covered California if payment is not received online. Payment modalities for all carriers include: personal check, cashiers check, money order, credit card, debit card, and EFT/ACH. Some plans even accept cash.

Networks Bigger Off-Exchange?

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Question: I just read today that in-exchange networks are different than off-exchange networks. For example, if I buy a plan from Blue Shield, they offer one network. If I buy the same plan with Blue Shield from Covered California, that network is much smaller. Is this true, and for what insurance companies?

Answer: No. Exchange carriers offer “mirrored” plans off-exchange that exactly match the Exchange plans including networks. Blue Shield offers only mirrored plans off-exchange. Anthem will offer alternative plans in addition to their mirrored plans off-exchange. Alternative plans are allowed by the ACA to foster innovation and and since they are not required to match exchange plans exactly some may offer broader networks.

Question: Filled out an online app that requests financial assistance. “eligibility” section says: “Your application is pending. To receive benefits, you must do the following: proof of California residency and proof of income” OK - how?

Answer: You can submit supporting documents to Covered California by fax, e-mail, or regular mail. They apparently are not ready to collect those documents so you may be on pending status for a while.

Question: I’m currently covered under CalCobra. That will expire at the end of March 2014. I will be eligible for Medicare in July 2014. Can I enroll in the the exchanges for the period Jan-1 thru June 30?

Answer: You can voluntarily quit COBRA or Cal-COBRA at any time. You can sign up for for a new off-exchange plan effective January 1, 2014 and stay on it until you go on medicare on July 1, 2014. To buy your new plan through Covered California, your COBRA coverage would have to be “unaffordable”, that is the former employee-only premium exceeds 9.5% of household income.

Question: In Covered CA, do members of a family/household have to choose the same plan or can members choose different plans, whether they receive premium assistance or not?

Answer: Yes. Covered California can enroll “split families” (family members enrolling in different products and plans) with or without tax credits. Currently, the online system does not support split-family processing. These enrollments will need exception processing manually until Jan 1, 2014.

Question: It seems complicated to switch from my private pay option—i.e getting involved with the tax returns, etc. Is there a way for me to avoid that?

Answer: Yes. You can apply for an off-exchange plan which mirrors exchange plans and rates exactly. And because you are not seeking a tax-credit, there are no questions about your income. Also, the application process takes only a fraction of the time as Covered California application.

Question: Using my 2014 income projection, I will qualify for the enhanced silver plan. If the exchange uses my 2012 income, however, I will not qualify for that plan. If I’m not allowed the enhanced plan due to 2012 income, will my extra co-pays be refunded to me when I file my 2014 taxes?

Answer: Your estimated 2014 income is what counts in setting your initial subsidy eligibility. Your 2012 income is a benchmark. If those two numbers are significantly different, you will explain why. As for the cost-sharing reductions for which you may be eligible, there is no repayment nor refund at the end of the year. It is your responsibility to inform the exchange during the year if your income changes.

Question: Concerning Individual Plans purchased through Covered California: if I sign with a carrier for 2014, can I terminate the plan and switch to the same tier with a different carrier, if the new application is processed prior to 3/31/2014 the end of the open enrollment period? Assume there is no life-changing event, such as the loss of a job, death of a spouse or birth of a child. Am I allowed to terminate and switch because I don’t like the network coverage or I don’t like the carrier’s customer service?

Answer: Yes. One can terminate coverage and buy a new plan during the open enrollment for any reason.

Question: If someone has dual citizenship and lives in the United States for 3 months out of the year, are they exempt from the Individual Mandate? If they would like Covered CA insurance for those 3 months, how would that work? I was told that if they have MEC outside the US then they are exempt from the mandate, but as far as applying for coverage with premium assistance, that seems a little confusing. Does filing taxes play a role?

Answer: You are not considered a California resident if you live in the state less than 6 months a year. Therefore you would not be eligible for Covered California coverage with or without a subsidy for the time that you are in the state. An American citizen who lives outside the country is exempt from the individual mandate, however.

Question: I’m disappointed by the providers in the exchange plans’ networks. My question is will there be any companies selling private Individual/Family plans on the open market outside of Covered California for 2014, particularly PPO plans?

Answer: Anthem, Blue Shield, Health Net and Kaiser will all offer off-exchange PPO plans that exactly mirror their Covered California exchange plans so same networks as well. So far, only Anthem has announced that they will have some alternative off-exchange plans. Those plans may offer broader PPO networks, but we haven’t seen them yet. Covered California just announced that it will have an easy-to-use composite (all carrier) provider directory available on Monday, October 7, 2013.

Question: Can a lawfully present visitor get premium assistance when he purchases insurance from the exchange if his income is within the federal poverty level guidelines?

Answer: Yes.

Question: Our student has university insurance through August 2014. At that time his projected income will qualify for him for subsidies. Does he need to apply BEFORE March to get them? Or when should he apply for this? Can’t find this anywhere!

Answer: No. He can wait until his school insurance expires in August or September and apply for exchange coverage then. The loss of his current coverage will qualify him for a special enrollment period to apply for new coverage.

Question: Like many others, I have been trying to find out if my current doctors will be in-network for the exchange plans. I noticed the on the Blue Shield web site, they have finally included what they call “2014 ACA Metal” plans, i.e. Bronze, Silver, etc. in their list of plans to select when searching for providers. Can we assume that this will be the same as for Blue Shield plans bought through Covered California? That is, if I found my doctor on the Blue Shield site as in-network for the 2014 ACA Silver plan, then she would also be in-network for the same plan bought through the exchange?

Answer: Yes. Carriers must mirror exactly their off-exchange plans to those they offer on Covered California right down to the including to identical provider networks.

Question: I understand that if I under-estimate my income, I may have to pay back some portion of the subsidies that I have received. Is there any problem with over-estimating one’s income for the year. I am thinking of a case when your original estimate does not put your 18-under kids onto Medi-Cal, but your actual income would have.

Answer: Yes. There could be significant tax consequences for your household. When you pay your taxes for that year, and your income would have qualified your children for Medi-Cal, the entire amount that you drew in advance tax credits could be due with the filing of your return.

Agent Agreement Available Today!

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The agent agreement is available and Covered California is notifying those agents who have completed training and passed the exam with the following message by email.
Agent Agreement Final Instructions.pdf

Question: I didn’t quite understand your recent answer regarding Medi-Cal and kids. My daughter is 18-1/2 and I would prefer her to be covered under the same plan as the rest of the family. If I declined Medi-Cal for her, would we simply pay the un-subsidized price for HER, or would the whole family become ineligible for receiving a subsidy ?

Answer: You would pay the un-subsidized rate for your daughter only. The rest of the family can be eligible for a tax credit.

No Agent Agreements Yet?

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Question: Since we have no agreements available to sign yet, will agents still be able to sell come tomorrow? (October 1st?)

Answer: As it stands now, no agent is fully certified to sell on Covered California because the official agent agreement is not ready. The Exchange says that they will provide an agreement for signature and bill the $58 fee to all agents who have completed the training and passed the exam, about 1,500 agents, this week. In the meantime, the only method available is ton complete a paper app and hang on to it until you are certified.

Question: Is there a penalty for under-projecting the income? Are they planning to charge interest on the subsidy difference? All I have heard is that one has to replay the subsidies, but nothing the interest or penalties. Also. I understand that in addition to the direct subsidy on the premium itself, one may qualify for a reduced co-payment and deductibles based on income. Assuming that is true, how will they claw that back if the actual income turns out to be more than the projected income. Based on the answers for the above, wouldn’t it make sense to always undershoot?

Answer: Correction: (I misread this question first time around.) There is no penalty for taking more advance tax credit than you are eligible for except to repay the excess advanced. The cost sharing reductions are not subject to repayment.

Provider Networks?

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Question: How do you compare plans? I cannot find any info as to if my primary is in network or not?

Answer: Covered California will have a consolidated provider directory on their site at some point. Individual carriers will have provider directories on their sites as well. Some carriers have still not finalized their networks so there will be some gaps when this thing launches tomorrow.

Must My Kids Take Medi-Cal?

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Question: If a family of four has an income of $32,735 - $58,875 they seem to fall into a bracket where the parents would have an exchange plan with subsidy and the children would be offered Medi Cal. In this scenario is it mandatory for the children to be placed on Medi-Cal, or can they opt to be included with their parents on a family exchange plan with subsidy?

Answer: If the any family members (children in your scenario) are eligible for public insurance they may choose not to apply for coverage and enroll in Covered California, but they are ineligible for a subsidy because they have access to public health insurance.

Question: I can’t find this anywhere! My brother will be in China this school year, including the first half of 2014, which is what the financial assistance for premiums will be based on. He didn’t have any other income in 2013. His income in 2013 will all be excluded because he pays taxes to the Chinese government as a teacher and he is under the $90k or so foreign income exclusion limit. Yet, he’ll be low income, probably fitting in the less than 200% of the FPL. We can’t figure out if he qualifies for the financial ACA premium assistance. Most people drop insurance when they go work overseas, but since he is returning and wants to remain with the HMO and his doctors, he wants to pay while he is teaching this school year in China. Thanks.

Answer: Your brother is exempt from the mandate to purchase health insurance while he lives out of the country. He couldn’t enroll in Covered California while out of the state anyway. When he returns, he will qualify for a special enrollment period and can enroll in the exchange. His eligibility for a premium assistance at that time will be determined on his projected income. He can probably find a plan that will include his current providers if not the same carrier he has now.

Dissolve Small Business Coverage?

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Question: I am a small business with under 40 employees who has always paid 100% of employee and family medical coverage since 1977. With the changes in healthcare coverage would it be more beneficial to me to have my employees go individually under California Coverage or would it be cheaper for me as an employer to continue cover them as a business under my current provider?

Answer: You’r right to reconsider the decision you made in 1977. Things have changed. There are so many elements to be considered that this decision lends itself to the classic Ben Franklin weighing of pros and cons. If you continue to provide a group plan with 100% coverage for your employees you get loyalty, employee good will, easier to recruit new employees, a big tax-deductible expense. On the con side a you get a huge business expense that will only continue to grow beyond your control. If you dissolve your group plan, there are many other considerations. How many of your employees will qualify for subsidies in the individual exchange. Will you provide extra compensation to “sweeten the deal” particularly with your higher-paid or key people? What are the tax consequences to your business and your employees? It’s complex and illustrates why you need a knowledgable professional insurance broker to guide and advise you.

Question: I own two homes in two different states (California and Florida) - and I live at each one 50% of the time (this is how I file my California State Income Tax - Florida has none). Which state health exchange do I purchase? How can I ensure that I am able to see Doctors in both states?

Answer: (1) It sounds like you probably are not going to be eligible for a subsidy based on income, if so there is no reason to enroll through the exchange in either state. (2) The best way to get access to in-network providers in both states is to purchase a Blue Shield of CA plan or a BCBS of Florida plan that will provide access to the “Blue Card” which is the BCBS national coverage plan. At no extra charge, it will allow you to get in-network coverage in both states. Anthem Blue Cross in CA will not honor the Blue Card for individual ACA-compliant plans.

Question: How will covered California know if your employer offers coverage?

Answer: The employer is not required to provide that information in 2014, so there is no routine way for the Exchange to verify access to employer-based coverage. If you’re thinking you get a free pass to subsidized exchange coverage in 2014, you may want to consider this: the IRS will have access to that information for the 2015 tax year and could possibly check your status in 2014…just saying.

Can Rates Be Changed During the Year?

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Question: Because the (plan, rate, network) information is going to be made available only at the time the website is going to open for business (Oct. 1), my guess is that they are going to be quite a bit off (up or down)in their projection regarding the number of sign-ups in each bucket. Can the insurance companies revise the prices up or down going forward?

Answer: No. The rates both on exchange and off-exchange are now set for 2014.

Any Private Insurance Left?

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Question: After Jan 2014 will there be any private insurance left to choose from, or is everything under Covered CA and do we know if our doctors will be on any plan we choose and will they be required to accept all insurance plans?

Answer: Covered California has contracted with 12 private insurance companies to offer plans in the exchange marketplace, so all Covered California plans are private insurance as opposed to Medi-Cal which is public insurance. Covered California says it will have a consolidated provider directory including all private insurance company networks on their website on October 1 so you will be able to see which private plans include your doctors.

Question: I read … that Blue Shield has significantly reduced its doctor network (shrunk around 50%) and excludes the UC system (UCSF, UCLA) for their ACA/metallic/exchange plans. Those UC medical centers are available to me in my current non-grandfathered plan … If I am unable to keep my existing non-grandfathered plan, how do I keep my existing network?

Answer: Blue Shield refers to it’s existing PPO network as the “legacy” network. Your description of the new Shield individual network is accurate. Members on non-grandfathered plans can keep their plans with legacy networks until the next plan renewal date. Small Group plans will continue with the legacy network. Incidentally, Covered California says it will have a consolidated (all carriers) provider directory on their website on October 1st.

Question: I pay 20% more because I have a preexisting condition. If I decide to keep my current plan into 2014, will they take off the extra premium in January?

Answer: No. If you choose to keep your current plan until the renewal date rather than enrolling in an ACA-compliant plan during the open enrollment period, your plan will continue to have pre-existing condition rating until its renewal date.

Can I Still Buy a Child-Only Plan?

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Question: I live in Nevada and pay for health insurance for my 8 year-old who is living with my ex in California. Will I be able to buy Obamacare for my kid? Also can I get a subsidy?

Answer: Yes. You will still be able to buy child-only Covered California coverage for your child in California. She may be eligible for a subsidy depending on the income of the household of which she is a part.

Question: If my Cobra coverage ends during the year, what proof would I need to show to be able to get coverage in the subsidized exchange? Would I be able to seamlessly have coverage start the day after Cobra coverage ends?

Answer: When your COBRA coverage expires you will receive a certificate of creditable coverage from your COBRA insurer. That will serve as proof. You will then qualify for a Special Enrollment Period (SEP). You will be able to coordinate the effective date of your new coverage on the first of the month after the end of COBRA coverage. By the way, if you are eligible for a subsidy, there is no need to wait for the expiration of your COBRA coverage. You can enroll in the “subsidized exchange” during the initial open enrollment period.

Does He Lose Grandfathered Status?

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Question: If a family is on a grandfathered plan and the 26-year-old ages off to his own policy with same plan, does he lose grandfathered status?

Answer: Yes. Because grandfathered plan status in the individual market is based solely on effective date of coverage. It must be before March 23, 2010. In your example, when the 26-year-old purchases his own policy, he will have a new effective date. Likewise, any plan transfers or plan downgrades since March 23, 2010 would have resulted in new effective dates thus loss of grandfathered status.

Question: Regarding premium costs, do you know the difference and the meaning of the ‘8% of income’ rule, and also how different than the ‘9.5% of income’ rule?

Answer: The premium threshold for an exemption from the individual mandate is 8% of income, while 9.5% of income is the “fair share” premium threshold for premium assistance.

Income Under 400% FPL But No Subsidy?

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Question: I plug-in earnings of $45,000 for the year. Age 46, in Los Angeles county region 16 (zip 90036). Covered California calculator says I am not eligible for a subsidy. The note says: “For your income, age, and location, the cost of health insurance is below the “fair share” amount called for under the Affordable Care Act. This means you will pay less for coverage than people living in areas with higher insurance costs or people who have higher costs due to their age.” Do you know what “fair share” is and if indeed this “fair share” also affects my subsidy eligibility?

Answer: The ACA considers your “fair share” to be anything less than 9.5% of your income. This converts to $356/mo. for an income of $45,000. The premiums for a Silver Level plan in the scenario you provided are below $356/mo., so even though your income is less than 400% FPL, there is no subsidy available because the premiums are low enough for your fair share.

Can I Upgrade My Coverage?

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Question: If I purchase Covered Cal PPO insurance and I find that I am not covered enough due to a horrible illness, can I then purchase private PPO insurance or will I be denied?

Answer: You cannot upgrade your coverage, either in-exchange or off-exchange, once the initial open enrollment period ends on March 31, 2014, until the next open enrollment period beginning 10/15/2014.

Question: Wondered if you watched the webcast of yesterday’s Covered California Board Meeting. If so, anything we should know about.

Answer: I did but I was late tuning in. Readers should comment with takeaways of their own, particularly in the first hour or so. Anyway, Here are a few items I picked up on.

  • Quality Ratings could be included by the Exchange as early as mid-November. Kaiser is pushing for it as they look good in the data. Other carriers who don’t look so hot say no “the data is old and no longer relevant”. I believe consumers would be well served to have this information included in the decision making process, no matter how imperfect.
  • Agents may be paid for Medi-Cal sales. Peter Lee is behind it, so I’d say it’s likely at some point.
  • Single Streamline Application is 35 pages long. The Exchange says that only 3 pages need to be completed by a single applicant. Check it out. Single Streamline Application.pdf

Rate Increases after Jan. 2014?

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Question: How often can a carrier raise rates? Will in be only during open enrollment or any time during the year provide they give a 60 day notice?

Answer: Rate adjustments will occur once a year with the new adjustment coming in January 1 each year going forward. Also, an adult having a birthday during the year, will see the adjustment in January as well.

Can We Split Our Family Enrollment?

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Question: … if one person in a three person family unit decides to opt for insurance without any subsidy inside or outside the exchange, do the other two automatically forfeit any subsidized insurance through the exchange because of that fact? Does it matter what the family income level is?

Answer: The eligibility for premium assistance in this scenario would be based on the income for a household of three. If the household is eligible for a subsidy, two members can enroll in Covered California while the third chooses unsubsidized coverage off-exchange. If not eligible for a subsidy, you could also enroll two members on exchange and one off-exchange, but there would be no benefit in so doing. In this case, it would be easier for all three family members to enroll off-exchange and split the enrollment among family members in any which way.

Worried About Clawback

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Question: Let’s say - A household’s current income is at 150% FPL and takes the advanced subsidy through the Exchange. During 2014, the income dips below 138% but they forget to apply for Medi-Cal when this happens. Will they be subject to “clawback” come tax time since they qualified for Medi-Cal but has taken the subsidy instead (in which case the charge back amount can be substantial)?

Answer: There is no reimbursement or “clawback” required in this scenario. Remember it is your responsibility to notify Covered California of changes of income.

Question: My work provides medical insurance for families (3+ persons), however the rates are going up for 2014 and I will have to pay the difference. Can my 22 year old who works move to a Covered California plan, thus reducing my cost at work for 2 people only?

Answer: Your 22 year-old dependent can opt out of your group plan to purchase individual health insurance in Covered California or off-exchange, but she will not be eligible for a subsidy because the she has access to group health insurance through your employer.

Question: Will this new Technical Release stop me from offering employers with less than 50 employees a reimbursement plan for their employees to buy subsidized coverage in the exchange?

Answer: Yes. To quote the DOL Technical Release #2013-03, “…an employer-sponsored HRA cannot be integrated with individual market coverage or with individual policies provided under an employer payment plan, and, therefore, an HRA used to purchase coverage on the individual market under these arrangements will fail to comply with the annual dollar limit prohibition…”. HRA’s integrated with fully insured small are still in compliance.

Can Married Couples Apply Separately?

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Question: If there is a married couple with out children, each has their own income, can they apply as singles? If so then as far as income verification is it just their own income not household income?

Answer: No. Household income is the usual rule. A married couple would have to show that they lived apart for the entire year to qualify separately.

Question: A recent news release from the DOI quotes Insurance Commissioner Jones saying: “The license approval for Covered California also provides a more efficient way for licensed agents to help consumers and businesses purchase health insurance through the Exchange, by allowing the agents to affiliate with the Exchange as opposed to obtaining appointments from each carrier selling health insurance products through the Exchange.” That seems so say that agents don’t have to worry about getting appointed with some of these lesser known carriers. Can you confirm?

Answer: Unfortunately I can’t confirm your assumption. I believe the Commissioner was referring to the SHOP exchange in the news release from which you quoted. In the SHOP, the Exchange pays the agent directly, so it stands to reason that being appointed with them is all you need. It would be tremendously helpful if the exchange provided a single path to appointments with all carriers in the individual Exchange as well. In fact, I’m pretty sure they said they would do so, but it was some time ago and I haven’t heard anything since.

Question: I am single making $50,000 ( I do not work) and the insurance cost is $7320 which is 14.6 percent of my annual income. The 14.6 percent exceeds the 9.5 percent affordability rule yet I am not eligible for tax credits as my income is a bit too high. Do I misunderstand something, or are options available?

Answer: While you are not eligible for a subsidy because of your income, your lack of affordable coverage does provide you with another option - access to a Catastrophic Plan, which is normally reserved for individuals under 30 years of age.

Provider Networks Ready?

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Question: Many have asked when Covered California provider networks will be ready for publication.

Answer: Here’s The exchange’s answer to that question posed by Chris Price via Twitter:

Provider Networks.png

Question: My income is very low right now as I am only able to find part-time work. I hope that will change sometimes but i don’t know when. How can I keep from owing them money at end of the year?

Answer: You can avoid advance tax credit repayments by reporting income changes as soon as possible. the government figures if no families report income changes during a single year, 38% of those receiving subsidies would owe the government a median of $857 each. If families report income changes in a timely manner, only 23% would owe money to the government and those that do would pay a median of $343 each.

Do I Have to Apply as a Family?

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Question: Currently I have my son on a child only plan, so that he can be on a richer plan than me and my wife. We are on a bare bones high deductible plans — that too individually thanks to the grotesque state of current individual insurance market place. We had to take what we could get. All the calculators I have seen so far want to treat the three of us as a group. When the exchange finally opens up are we going to have a chance to buy ala carte? How will the subsidies be calculated and applied? Thanks, Bated Breath.

Answer: If your household income qualifies you for premium assistance, you will have to choose family coverage in the exchange, but if you are not eligible for a subsidy, you can buy your coverage off-exchange and choose different coverage for each family member if you wish.

Question: I was totally confused and frustrated by the exchange certification process, pre-registration, registration, pending, and so on. Now I’m finally ready to take a class and there’s nothing available until the end of the month. What if I can’t get certified by October 1?

Answer: Covered California will temporarily certify all licensed agents for the month of October. That’s because the Agent Agreements won’t be ready for signing until sometime in October.

The Affordability Test for Families

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Question: If I include my wife and children on my employer’s health insurance, the annual premium will be above 9.5 percent. If i drop my employer’s plan and purchase my own for the family, am i still eligible for tax credit?

Answer: No. The 9.5% affordability test applies to the net employee-only cost of coverage. It does not include the cost of insuring spouse and or children. Therefore, you or your family members are not eligible for a subsidy in Covered California. This is not a Covered California decision. It is an IRS rule.

A Plain Vanilla Marketplace?

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Question: If all of the plans on and off the exchange are the same - benefits and rates, then there’s no competitive advantage except in the networks. Am I right?

Answer: You’re partly right. If a carrier participates in Covered California, they must also offer the same plans or “mirror” those plans off-exchange. But, participating exchange carriers can also offer some alternative plans. For example, Anthem will offer 8 Bronze plans and 4 Silver plans off-exchange that do not mirror the exchange plans. Of course, they still have to be ACA-compliant and conform to the actuarial values for each level. Blue Shield, on the other hand, will be offering no alternative plans off exchange, only mirrored plans. Cigna, who does not participate in Covered California, will be offering only alternative plans off-exchange. So, the 2014 marketplace is not quite a plain vanilla as we first thought.

Question: I have a small group client with key personel working for the company living in another state. How will we enroll these types of groups?

Answer:If this small group is off-exchange, nothing changes. Remember the group has to have 51% of eligibles residing in California. As for the SHOP, where the employees have a choice of carriers, the out-of-state employees would obviously have to choose a SHOP carrier with a presence in their state. The best choice will generally be Blue Shield, as they have the best national coverage through the BCBS Blue Card Program.

Dependent in Another State?

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Question: Parents with dependent. Parents claim on taxes. Dependent is 23 and out of state. How to handle this? Insurance where parents are or kid? Separate? State or fed program?

Answer: As mentioned before, Covered California has yet to publish comprehensive guidelines for “household” determinations, but I’ll go out on a limb for you. If your “kid” is a full-time resident of another state, he or she may apply that for state’s exchange coverage and be eligible for premium assistance. You would not count this kid as part of the household in California regardless of tax status. Your kid must be a full time student or disabled to be claimed as a dependent over age 18 and that expires in the year he or she turns 24.

SHOP Agent Commission

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The following is the schedule of agent commissions for new SHOP business effective January 1, 2014 and later.

  • 1st Year 6.5%
  • 2nd Year 6.2%
  • 3rd Year 5.9%
  • 4th Year 5.6%
  • 5th Year 5.3%
  • 6+ Years 5.0%

MAGI and HSA contributions

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Question: I have had an Individual HSA plan for years and probably will select one if available in Oct. When I estimate my MAGI for 2014, should I include my annual HSA contribution in the figure or will this not be tax deductible anymore?

Answer: Thanks to Max Herr’s very informative comment on my previous HSA entry. I have your answer. Your 2014 HSA contribution will be added back onto your AGI to make up your MAGI for the purpose of calculating your tax credit. That will lower your credit and may even cause it to disappear. So I’d recommend that you do not take your tax credit in advance and you may find that you have an unused tax credit once you do your 2014 taxes. That pleasant surprise would be easier than paying the tax man a surcharge.

HSAs and Subsidies

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Question: If I select a HSA individual plan can I also qualify for a subsidy for the premiums?

Answer: I haven’t read anything definitive on this question from the IRS. If anybody else has please let me know. You have the option to apply your subsidy toward the purchase of a Bronze plan which the HSA is, but I doubt the IRS will not allow a double tax benefit. They may come to some accommodation for a partial reduction of the HSA contribution.

2014 Commission News

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Question: I saw where Blue Shield announced agent commissions at 4% on individual business. Any news on other carriers?

Answer: Yes. Shield announced 4% first year and renewal for ACA-compliant individual business effective 1/1/14. Anthem also disclosed their commission: $18 per member per month first year and $12 pmpm renewal. Looks like Kaiser will be staying at a $100 flat fee. Anybody heard from Health Net?

Question: I don’t understand how you will quote plans available for Oct, Nov, Dec effective dates, while also quoting ACA compliant plans with a January effective date. It could be very confusing. Any ideas?

Answer: Carriers are taking steps to handle the potentially confusing overlap you described. Blue Shield announced today that they will stop accepting online applications for their current portfolio of plans on September 25th and will begin displaying and quoting ACA-compliant metal plans on September, 26th, with October 1st the first day to submit applications for ACA-compliant plans. Only paper applications for the existing portfolio will be used between 9/26/13 through 11/15/13 with the last effective date 12/1/13.

Household 4, Insured 1 or 3?

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Question: My husband is on Medicare. I am not. In addition we have, twin sons age 20 who are college students and have student health insurance. The boys live with us. Our household income is about $50,0000. Do we count the household income if only I need coverage? Can my sons stay on their college insurance after January 1, 2014?

Answer: Yes. The household income is used regardless of the number of members to be covered and you can enter only one person to be covered. Your sons can stay on their college insurance because it qualifies as minimum essential coverage. Go to the Covered California Shop and Compare calculator enter 4 for number of people in household, household income of $50,000 and for our example enter zip code 90045. Enter age 50 for our example and leave the number of people to be covered at one. The options presented at the Enhanced Silver level have net monthly premiums ranging from a low of $256 to a high of $289 after premium assistance. But wait we’re not done. As an added bonus, we’re going to add your 2 sons to the same Enhanced Silver coverage absolutely free. That’s right, you can cover 3 family members for the same cost as one person. How in the world is that possible? Because of the little known fact that there is a premium limit is based on income. What that means to you is the amount you pay is set by your income, in this example approximately 7% of $50,000 - or $290 per month. What happens is the subsidy increases to cover the added gross premium for 3 family members versus one. Wow! What a deal.

SHOP Options for Employees

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Question: If my employer chooses a Bronze anchor plan with Kaiser can the employee pick a Gold plan with Anthem and pay the difference?

Answer: No. The employees may select from any plan, including different carriers, but only from the metal tier selected by the employer - Bronze in this example.

Question: My significant other & I share a home. We have income of $11,000/yr. I believe that qualifies us for Medi-Cal but we have substantial assets for our retirement. Are you still eligible for medi-cal with over $750k in bank accounts and mutual funds for retirement?

Answer: Yes. You are eligible for Medi-Cal. Assets are no longer considered in determining your eligibility.

Can Group Dependents be Subsidized?

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Question: Are small & large employers required to offer coverage to dependent children under 21? I know they don’t have to offer to spouses so they could go to the exchange, but if they are required to offer to dependent children then that could mean alot of children who’s household incomes above 250% could be with out coverage since they would not be eligible for tax credits on the Covered California Exhchange, therefore the parents may still not be able to afford coverage for their children.

Answer: Neither small nor large employer-sponsored groups are “required” to offer coverage to dependent children, but currently all small groups in California do and most large groups do as well. The same is true of spouses. And, yes, since spouse and dependent coverage is “offered”, even without an employer contribution, the family is not eligible for premium assistance in the exchange. This is an IRA ruling not a Covered California decision.

Employee/Single only coverage?

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Question: Will employers be able to elect to provide employee only coverage in the SHOP Exchange so spouses/dependents can go to the individual exchange and be eligible for a premium subsidy?

Answer: At least one of the major carriers is considering it and that would be for off-exchange small groups as well if it does happen.

Why No Training Date?

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Question: I called Covered CA—told to wait for e-mail you mentioned last week. So far, no e-mail to pick in person training. What can I do?

Answer: I’ve had some agents tell me that their status had changed from pending to eligible but they have not received the login info for training. In the meantime, here’s the training schedule. Click image to enlarge.

Agent Training Schedule.png

Opt Out of Student Insurance?

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Question: I am a graduate student and wondering if I can waive the plan offered by school and purchase outside. I have about 22000 income this year which should be qualified me for some subsidy. School plan is not my best choice because it is way more expensive. My question is will the school plan an accessible coverage for me which might prevent me from buying one outside myself ?

Answer: Yes. You can waive the plan offered by your school and enroll in subsidized Covered California coverage. Having access to school coverage will not disqualify you from receiving premium assistance in the exchange. At MAGI of $22k, your subsidy will cover approximately 50% of the Silver Plan premium.

Tax Credits with No Income?

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Question: My wife and i draw a salary from our s corp Total salary 24,000 for both in a year. Our adjusted gross income on tax return is a loss. Do we qualify for credits?

Answer: No. Since you are eligible for Medi-Cal, you do not qualify for advance tax credits.

When Will Coverage Begin?

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Question: If I apply during open enrollment, for example on January 22nd, and go to the the doctor that same day, will be my coverage begin that day? Will that doctor visit be covered? Or, does coverage always begin on the first of the month following application?

Answer: The earliest coverage will start is the first of the following month, but you must enroll by the 15th of the previous month. In your example, enrolling on January 22nd, your coverage would not start until March 1st. Any medical expenses you would incur between January 22nd and March 1st would not be covered.

Mom and Pop Business

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Question: I am the sole shareholder and employee of my home-based marketing services business, set-up as an S-corporation. I pay my husband, as an independent contractor, sales commission (about $30k/yr) for projects he brings to the company. I have been buying individual medical insurance for our family of 4 (incl 2 small kids) from Anthem. For 2014, should I buy insurance through the small business exchange, or as individual insurance? I am confused as to whether the small business tax credits are a better “deal” than the subsidy. I anticipate a $50k 2013 household income and perhaps $60k for 2014.

Answer: Your only option is the individual exchange. Covered California SHOP has ruled that at least one employee must be on payroll to be eligible and that employee cannot be a family member. See comments for additional details.

Question: If the difference between PPO and HMO is diminished, it seems the choice among various insurance plans comes down to one important factor: network. But this piece of information is nowhere to be seen. Certainly Covered California already knows what they are, so what’s the delay?

Answer: Right. Provider networks and price are the only differences among plans on the exchange. When can we see them? Certainly by October 1st. Where? Definitely on the individual insurance company websites and hopefully it will be available during the plan selection phase of the enrollment process on the exchange.

Question: So far all we have is “teaser” rates for single 40 and 25 year olds. When will we be able to get quotes for actual household sizes?

Answer: Right now. Covered California introduced a new rate calculator on their website yesterday. Something to watch out for: they only show 4 plans in their comparison and not always intyellegintly. For example, in my region the show 2 Anthem plans and no Kaiser plan. As for the rates, I’ll let you form your own opinion.

PPO vs. EPO for My Daughter?

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Question: I live in Santa Cruz and currently have double insurance. Medicare(disability) and Blue Shield Stand-Alone PPO SMall Group. I needed to keep the PPO because I have a minor daughter and Medicare does not cover minors. I noticed that Blue Shield will only have an EPO. My daughter will be going off to college next year. What is the difference between an EPO and PPO? I want to be able to select my own drs. I do not know where my daughter will be going to college but it will be in CA. Should I consider getting her a separate plan ? What plan would you recommend for me? Will the small group business plans continue under Blue Shield?

Answer: Your daughter’s best option is a PPO because that would give her access to any PPO provider throughout the state. The EPO is only good for the local network with emergency-only coverage out-of-network. Your employer sponsored Blue Shield plan will remain a legacy (full) PPO network until the next plan renewal. At that time your employer can choose a Health Net narrow network PPO if the Shield EPO network is not satisfactory. Your employer could also choose SHOP coverage through Covered California, which would allow each employee to choose either Health Net PPO or Blue Shield EPO.

Question: When the #$%*& are we going to get trained?

Answer: I got mine this afternoon( see below). Once you login you will be instructed to create a new password. Once on the homepage, click on “My Upcoming Training” then you’ll be able to choose a training location and date. Here’s what the Response to your Certification Registration will look like.

Subject: Account Information for Covered California
From: HelpDesk@covered.ca.gov

Dear Agent,

An administrator for the Covered California Learning Management System created an account for you. To log into the system, you will need to know the following:

Site URL: http://learning.coveredca.com/
Your login ID: XXXXXXXXXXX
Your temporary password: XXXXXXXX

Before you can access features in the system, you must log in. You may be required to enter and confirm a new password. Email the System Administrator at mailto:HelpDesk@covered.ca.gov if you have any questions.

Income Guidelines for Adult Child?

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Question: I am a self-employed single parent with health benefits provided by VA for a service connected disability. I have a 19 year old son living with me and going to college. He has no income. Will he qualify for Medi-Cal? Is eligibility based on his income (none) or total household income?

Answer: Your son's eligibility for Medi-Cal or premium assistance in Covered California will depend on your household income. Your VA benefits are not a factor in the determination.

Question: Does marriage qualify for a special enrollment period? If so how soon can the newly married individuals be covered in Covered California.

Answer: Yes. Marriage is SEP triggering event. This means that, if a qualified individual gets married, he or she has the chance to either enroll in a QHP - in-exchange or off exchange - for the first time, or add a spouse to the plan without waiting for the annual open enrollment period. If the exchange is notified before the last day of the month when the marriage occurred, coverage will begin the 1st of the following month. If a marriage occurs and the exchange is notified after the end of the month when the marriage occurred, coverage will begin the 1st of the month following the notification. Covered California would need to be notified within 60 days of a marriage for a spouse to be covered. If the 60-day deadline is missed, the spouse cannot enroll until the plan’s annual open enrollment period.

Question: I am currently on Cal COBRA and it will go until July 2014. The plan renews in May 2014. At that point I expect the rates to go up, would that be considered a qualifying event that would allow me to enroll at that time? Are the qualifying events off and on the exchange the same?

Answer: You can keep COBRA coverage until it expires in July and would then qualify for a Special Enrollment Period extending 60 days from that date. If you drop COBRA coverage between April and June you will have to wait until the next open enrollment period starting October 15, 2014 to enroll in an individual health plan either in-exchange or off-exchange..

Newborn Coverage?

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Question: I am pregnant with a due date around March 20th. How much time do I have to get my baby covered? What if the open enrollment period is over? Will they cover a newborn back to the date of birth?

Answer: The effective date of coverage for a newborn can be the date of the birth as long as the Covered California is notified within 60 days. If the 60-day deadline is missed, the baby cannot be enrolled until the next annual open enrollment period. Premiums would be pro-rated for the month, based on when the child was added to the policy. The same rules exist for the adoption of a child.

Stepchild Part of Our Household?

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Question: My wife’s child with her previous husband lives with us, yet is claimed as dependent on her father’s taxes. Can my wife’s daughter be covered under our family plan (whether we take a Covered California plan or not), or must she be covered under her father’s health plan?

Answer: While Covered California is still wrestling with regulations for families that will specify issues like this, I will go out on a limb and say that your step-daughter will be included as part of your household is she lives with you for over half the year regardless of IRS issues.

Can Enrollment be Changed?

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Question: If a applicant enrolls early in open enrollment in Health Plan A can they later in open enrollment decide to change to Health Plan B? If so what happens to the agent of record?

Answer: Yes. An individual can change their plan selection multiple times within the open enrollment period. The agent of record could change each time as and the last one would win.

Question: Can someone’s dependents qualify for Medi-Cal or subsidies for coverage if the parent has coverage through a small employer that offers affordable coverage and meets minimum standards?

Answer: Dependents under 19 with access to employer-based group health insurance can qualify for Medi-Cal assuming other requirements are met, but those dependents cannot qualify for a subsidy in Covered California.

Question: We are all hearing that for IFP applicants they must enroll during the annual open enrollment unless they have a qualifying event. In a meeting today, and maybe it was just the way it was phrased, a representative of Covered California made it sound like if someone wanted to apply outside the open enrollment, without a qualifying event, they wouldn’t be ‘guaranteed issue.’ SO, would someone potentially be be able to enroll outside of OE, subject to medical underwriting? Thanks!

Answer: No. There will be no more non-guaranteed issue or underwriting after January 1, 2014. The only way to enroll outside of open enrollment is to have a qualifying event.

The Commission Guessing Game

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Question: Have IFP agent commissions been announced yet?

Answer: I get that question every day and it’s time I deal with it. So here we go. They can’t stall much longer. A highly placed spokesperson for one of the “Big 4” IFP carriers told me that they will announce IFP agent commissions within the next 10 days and their commission will be between 4% to 6% of premium with renewals at the same rate. We cannot assume, however, that all carrier commission rates will be the same. In fact, we could see some pretty dramatic variations in commission rates among carriers. I know this because, carriers had to include agent commissions in their DOI Rate Filings for 2014 and though they are not bound by the fillings, you can assume that’s what they targeted in order to meet their MLR goal. The range among carriers is surprisingly wide: from a high of 7.6% of premium to a low of 2.5% of premium. By the way, I don’t mean to imply that all carriers will pay on a percentage basis. We will probably see some carriers paying a flat fee per member per month. While IFP commissions used to be 4 times higher on average, selling will be a lot easier. Even so, agents may feel like the famous discount seller. When asked how he could afford to sell so cheap, he answered, “I lose money on every sale, but I make it up on volume”.

2014 Rates?

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Question: When do the grand pooh-baa’s of this slow motion train wreck plan on actually publishing the rates we poor serfs will be expected to pay? Certainly Covered California already knows what they are, so what’s the delay?

Answer: You’re right. The 2014 California insurance rates have been available at the California Department of Insurance website for several months. You’ll have to do some digging but her’s the link to get started - https://interactive.web.insurance.ca.gov/apex/f?p=102:2:0::NO::: As you’ll see they are not in a format that is accessible to consumers. One thing I’ve learned about government agencies is that they are total control freaks. They have to control the process. The public will see the rates when they are ready for the public to see the rates.

Exempt from Individual Mandate?

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Question: I understand most of the exemptions from the Individual mandates but need clarification on these. Individuals who cannot afford coverage (i.e. required contribution exceeds 8% of household income,) Individual in a hardship situation, and individual with income below the tax filing threshold threshold.

Answer: Here is the list of exemptions from the individual mandate:

  • coverage is unaffordable (excedes 9.5% of household income;
  • they do not meet the filing threshold for purposes of income tax filing;
  • they are Native Americans;
  • they have a short lapse in coverage (less than three months since they had minimum essential coverage);
  • they have suffered a hardship;
  • they are a dependent; or
  • they reside outside of the United States.

Question: I pre-registered for the up coming agent training. I haven’t received any emails from covered California. Will they contact me when it’s time to register?

Answer: I don’t think any agents have received a heads-up email from Covered California, but don’t wait. Agents can register for a Covered California account as of today. Begin by creating an account with CC. Go to https://apply.coveredca.com/apspahbx/ahbxanonym.portal and click on “create account” at the top right. Once your CC online account is completed, you’ll be in pending status until approved. Then you should be able to select a training date and location.

Question: I live in San Diego, and have been leaning towards Blue Shield (PPO) versus Anthem (EPO) since I don’t like the idea of NO out of network coverage. However, my daughter will be going off to college at UC Santa Cruz in the Fall, and I notice that in Santa Cruz’s region, it is reversed, i.e. Blue Shield is an EPO whereas Anthem is a PPO. Does this have any unusual implications in my situation? My interpretation (assuming we have Blue Shield as a family) would be that in Santa Cruz, she would need to use a provider who was in-network for Blue Shield in Santa Cruz. Is this correct, or would she be able to transfer the “PPO-ness” of our San Diego Blue Shield policy up to school with her? I realized that this only matters if she really needs to see someone who is not in-network for Blue Shield up in that region. Is this an important enough reason to purchase her own policy vs. being part of the family ? And, in general, how will it work for ANYONE who travels to a different region (or out of state, for that matter) where the type of policy that your provider offers is different in the area that you are visiting ? I hope the question is clear, thanks for the service that you are providing.

Answer: The solution is for the family to buy the Blue Shield PPO because PPO members can access EPO providers, but EPO members are unable to access PPO providers. EPO members can only access other EPO providers in other counties. You are correct, no out-of-network coverage for EPO members except for emergencies. PPO members will have out-of-state coverage through BlueCard. EPO members will not.

Medi-Cal for Kids?

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Question: Can someone still enroll children in Med-Cal if they have affordable and minimum value coverage at their employment?

Answer: Families with children who would qualify for Healthy Families now will qualify for Medi-Cal for children (Medi-Kids?).

Out of Pocket Caps Delayed?

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Question: Say it isn’t so! Can you please clarify on this delay? I heard something on Anthem’s webinar yesterday that it only affects those using separate service providers? Needing better clarification. Please advise.

Answer: OK, it may not be so. What we’re talking about here is the individual annual out-of-pocket limit (OOP) set by the ACA at $6,400 per year including prescription medication. The feds waffled on this, setting an additional OOP limit of $6400 on prescription drugs, for a total annual OOP limit $12,800 for 2014. But hold the presses, California may again outdo the feds. If Senate Bill 639 by Sen. Ed Hernandez is passed by the Legislature this year and signed by the governor, it will make the total OOP $6400 after all. It may not even matter, as Covered California has already set the OOP at $6,400 as originally intended by the ACA. They are checking now to see if they would have to follow the Feds.

Question: Do Insurers who offer plans inside the Exchange have to offer a similar plan outside of the Exchange?

Answer: Yes. Carriers with qualified health plans inside the exchange have to offer the identical plans outside the exchange. However, they can offer additional plans off-exchange as long as they meet ACA guidelines.

Out-of-State Dependents

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Question: I have 3 kids, the two older kids will live in another state for school. Do they have take that state’s ACA-compliant Marketplace plan, or can they be on our Covered California family PPO plan? Is the dependent-through-age-25 rule only a consideration if the child is filed as dependent on taxes?

Answer: Your “children” between the ages of 19 and 26 can be included in your family plan (PPO) with Covered California even though they are out of state and/or are not claimed as dependents. However, that may not be your best option financially. Let’s say that your older child attends school but has a low-income job and maintains a residence off-campus. He or she may qualify for Medicaid or highly subsidized exchange coverage individually.

Question: In regard to children staying on the parents plan until age 26, does this still apply to the exchange family plans? If so, would their income be part of the household income calculation then?

Answer: Covered California will include dependents between age 19 and 26 in family coverage. If they reside with the family over 50% of the year, their income will be included in the household total for premium assistance purposes. Total family premium is computed by adding their age-rated premiums onto the family premium of parent(s) and children under 19.

No Dependent Coverage

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Question: My large employer does not offer dependent coverage. Can my wife and kids get coverage in the exchange with subsidies.

Answer: Employers with 50 or more employees are required to offer coverage to full-time employees and dependent children up to age 26. They are not required to offer coverage to spouses. So, if that is the case, your spouse could get Covered California and if your household income (MAGI) is under 400% FPL, she will be eligible for subsidized coverage. Your children on the other hand will not be eligible as they have access to employer-based coverage even if they are is not enrolled.

Question: I know the exchange has an open enrollment but will plans off the exchange have one too in 2014? If not, will the only penalty for late enrollment be on your tax return ($95 or 1 percent of income).

Answer: No. Individual and family enrollments off-exchange will be subject to the same enrollment requirements as the Covered California plans.

What is MAGI?

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Question: Regarding individual insurance subsidies,is there more information on how Modified adjusted gross income will be calculated? For instance will rental income be included?

Answer: All taxable income contributes to your Adjusted Gross Income (AGI). You will find that number on line 37 of your last Form 1040. Modified AGI or MAGI will always be the same or higher that AGI because it adds back onto the AGI certain deductions you may have taken. These deductions include:

  1. Student loan interest
  2. One-half of self-employment tax
  3. Qualified tuition expenses
  4. Tuition and fees deduction
  5. Passive loss or passive income
  6. IRA contributions, taxable social security payments
  7. The exclusion for income from U.S. savings bonds
  8. The exclusion under 137 for adoption expenses
  9. Rental losses
  10. Any overall loss from a publicly traded partnership

Question: Will the SHOP allow a Pre Tax Benefit (sec 125) for share of cost on coverage? I believe the answer is no for Individual but interested in SHOP. Thanks

Answer: Yes. Section 125, Premium Only Plans (POP) still facilitate the pre-tax benefits for the employee’s share of the premium in the SHOP. In addition, POP plans can facilitate the pre-tax purchase of individual health insurance “off” the exchange. And POP plans can also facilitate the pre-tax payment of an employee’s share of premiums for large employers that purchase group coverage “off” the Exchange. The new Code section 125(f)(3) is intended to prevent employers from using cafeteria plans to allow employees to make pre-tax purchases of individual health insurance coverage from an Individual Exchange.

Take Their Word for It?

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Question: Are you saying that the Exchange is going to accept whatever the applicant tells them without verification? That’s crazy.

Answer: Depending on an individual’s specific circumstances, the Exchange can verify the information, from the following sources:

  • Social Security Number (SSN) (Social Security Administration [SSA]) (An individual does not have to provide an SSN if he or she does not have one.)
  • Residency data
  • Citizenship status (SSA and Department of Homeland Security [DHS])
  • Immigration status (DHS)
  • American Indian or Alaska Native status
  • Household size (IRS)
  • Household income (IRS, SSA, Equifax, potentially other sources)
  • Access to other coverage (Medicaid, CHIP, Medicare, TRICARE, Department of Veterans Affairs, Peace Corps, other Marketplaces, the SHOP, and potentially other sources)

Finally, the Exchange can and will ask an applicant to fax a copy of a pay stub, utility bill, green card, etc. After all that, the Exchange may have to “take their word for it” and let the IRS sort it out at tax time.

Question: How and when does the agent’s number get attached to an applicant during the Covered California enrollment process?

Answer: I dug up a Covered California document listing in detail the Proposed Application Data Elements that will be required in the Covered California application process. SingleStreamlineApplication_Elements.pdf This is not the online application which is not yet released, but a list of all the information to be collected in each section. Assuming the actual online application follows the sequence of information gathering depicted here, then the agent information is added at the very beginning of the application process.

PPCA Delay?

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Question: There was no notice that the PPACA Small Business Insurance Market Delayed a Year. I believe this is for the Federal Marketplace. Will Covered CA delay?

Answer: The one-year delay in implementing ACA employer requirements does not apply to the small group market, only employers with over 50 employees. The delay for those employers affects all states.

Question: Can I do anything about getting certified in the California exchange now?

Answer: Yes. I recommend that all agents who want to get certified in Covered California pre-register for training at https://coveredcaagent.pinnacletpa.com/preregistration.

Question: To become certified to sell insurance through the Exchange in October, must an agent also be appointed with the insurance companies that are selling the plans in the exchange? For instance, if I, as a licensed agent and certified through the exchange, help enroll a client with a Blue Shield plan, must I first be appointed to sell Blue Shield outside the exchange?

Answer: Yes, otherwise you won’t get paid for Covered California business enrolling with Blue Shield.

Any Family Rates?

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Question: The teaser rates released so far do not show any family rates. Will there be any?

Answer: Yes. These are the Federal Marketplace Family Rating Standards. I’m assuming Covered California’s will be the same.

  • Families include 1 or 2 parents and up to 3 family members under 21.
  • Family premiums are based on the premiums for each family member’s age.
  • Only the premiums the first three children under 21 contribute to the total family premium.
  • Family total premiums can include per-member rates for children to age 26.

Question: My large employer said that before 2015, they will start offering coverage that costs less than 9.5% of income for self-only, but how will my employer know how much income my husband has? Is my employer allowed to ask employees to report or prove their household income? I think it is in my interest to have the company calculate 9.5% of just the employees wages…if the company adds the income of our husbands/wives, 9.5% could be much more expensive. Thanks for your help!

Answer: Your household income(employee and spouse) will be included in the affordability limit of 9.5% income.

Question: There is a new website for agent training. Is this for CA agents or do we wait for covered Ca to get training and is just for the states without their own exchanges?

Answer: The Federal Facilitated Marketplaces (FFM) launched their online agent training for their exchanges in 33 states last Friday. California agents can take the training and be certified to participate in the FFMs, but it will not count for Covered California certification. The entire FFM training and exams can be completed online within 4 hours. Which raises the question: why is Covered California making is so difficult and why are they not making the training available sooner? You don’t have to be paranoid to wonder if they are deliberately constraining the number of agents able to participate, at least in the early going.

Question: Will all plans bought from the exchange direct be assign to a broker in the area of the client. for servicing purposes? I am referring to SHOP as well as Individual.

Answer: Wouldn’t that be nice. No, Covered California will not pass on direct sales to agents. Additionally, individual leads beyond the call centers’ capacity will routinely be passed on to Assisters not agents. A spokesperson for the SHOP said that they would pass leads to agents. The SHOP depends primarily on agents for employer enrollments, so that makes sense, but we’ll have to wait to see how it works.

Question: My “domestic partner” and I live in the same household (male and female), but we file individual tax returns. He has medicare, I do not. Can I apply as a single person with my own annual income, which was about 22,000 for 2012?

Answer: Since you filed your taxes as an individual, you’ll be eligible based on your individual income, so you will qualify for highly subsidized Covered California coverage and lower cost sharing amounts.

Question: People can be exempt from the (individual mandate) penalty if they have income below the tax filing threshold. But why people would want to be exempted but not just go into Medi-Cal and get full benefit?

Answer: Right. It doesn’t make sense to pass up free health care insurance, yet many people do. Many thousands of legal California residents who are currently eligible for Medi-Cal do not sign-up. I most cases it’s because the powers that be have not been able to get the message to them. Covered California has committed enormous outreach resources to get to these people in the next few months.

Grandfathered Plan Rates

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Question: I have a Blue Shield grandfathered health plan with a very high rate, especially in that it is rated higher because of a health condition upon initial application and approval (can’t get lower tier now either). I am looking at my health plan options to lower my premiums. Should I decide to keep my grandfathered plan come Jan 2014, will the Tier rating rate-up automatically be eliminated (and therefore my rate reduced), or can Blue Shield still keep the higher rating in place regardless of the ACA mandate to not rate on health or medical conditions?

Answer: Grandfathered benefit plans (benefits have not changed since March 23, 2010) are not required to meet ACA standard benefits, I believe that would include the premium rate-up for preexisting conditions. That means your current premium will not be reduced in 2014. You will probably want to change to a ACA compliant plan.

Question: The Small Business Fact Sheet on the coveredca.com website states that the SHOP exchange is for businesses with 50 or fewer full-time equivalent employees. On the CoveredCA agent webinar #2, Michael Lujan says that the FTE calculation is only used to determine whether or not a group is subject to the pay or play mandate and that the SHOP is open to any business with 50 or fewer full time employees, not FTE employees. Which is correct? I’ve sent two emails to folks at CoveredCA but have yet to receive a response.

Answer: The FTE method of calculating employees should be used in both cases that you mentioned according to the ACA: (1) to determine group size in the exchange and (2) to calculate the play or pay penalty if any. I don’t doubt that Mr. Lujan may have mistakenly said otherwise with all he had going on. But the exchange itself is inconsistent in their published information on this issue.

Insurance Agents Compensation

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Question: With CoveredCalifornia, how do health insurance agents receive compensation if the individual has to go through the exchange?

Answer: Agents placing individual health insurance business in Covered California will be paid by the carrier who gets the enrollment, just as they do now. The commission amount has not yet been made public, but it will vary somewhat from carrier to carrier. In those cases where the commission is calculated as a percentage, it will be based on the entire premium amount - including federal premium assistance. Agents will have to be certified by the exchange and appointed with the carrier in order to get paid.

Small-Employer Benefits Issues

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Question: I have 25 employees and currently pay 65% of health insurance premiums. The (small business) tax rebate is non-existant for my company, so we are considering ending our coverage but paying the employees more, using some kind of bonuses/special compensation.

  • Can the employer demand proof that the insurance was bought?
  • Is it feasible to ask for this every month, or is the employee locked into an insurance contract when they first sign up?
  • Can the employer only give the “bonus” money to insured employees or are all employees entitled to it?
  • Under what circumstances can an employer give pre-taxed money in their paychecks?
  • Can the amount vary by employee?

Answer: Thank you for sending in your question, because these issues will be faced by most small-business owners over the coming year. I must start with a disclaimer: I am a licensed insurance agent, not a tax accountant or HR professional. Have said that, I believe I can answer most of the issues you raise.

  • Yes, you can ask for proof of individual insurance coverage as often as you like. The individual is insured on a month-to-month basis. They can cancel their coverage or lapse it by not paying their premium.
  • Doesn’t bonus compensation usually has strings attached - performance goals for example? I see no problem with requiring employees to maintain uninterrupted coverage as a condition of qualifying for the bonus.
  • There is no 100% safe way to withhold pre-tax money from an employee’s pay to reimburse individual health insurance premiums. Some claim that a Health Reimbursement Arrangement (HRA) can be used for this purpose, but I believe this will have to be tested with the IRS, before we can safely do it.

Household with Disabled Spouse

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Question: I have a client who is earning a relatively small income and has a disabled spouse who is collecting disability income. When looking at this situation, is the income he receives from his disability payments considered part of their annual income?

Answer: To the extent that the disability income is taxed, that portion is added to the spouses income for total household income. The 2-person household income dictates the subsidy amount for the able-bodied spouse even though the disabled spouse is not enrolling in Covered California.

Elderly Resident Coverage?

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Question: My mum recently immigrated her, she is 79, and we currently have coverage until end of year through travel. She is a legal California Resident and I wish to apply for covered CA for her. She lives with me, but her income individually is low, at a pension of around $1000 per month. What are the steps to take. Thanks.

Answer: Your mother does not qualify for public health insurance, either Medicare or Medi-Cal. Since she is a legal resident, she does qualify for Covered California coverage regardless of her age. She may be eligible for premium assistance as well. She can apply during open enrollment starting October 1 for coverage effective January 1, 2014.

Licensed Staff Certification

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Question: As a broker who has 5 licensed support staff members, will they have to be Certified to help our current clients or prospective new clients with enrollment in to the Exchange or SHOP?

Answer: Yes, if licensed staff actually enroll people in Covered California they must be certified. No, if they only provide assistance and the Certified Agent does the “enrolling”.

Subsidies Recovery at Tax Time

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Question: Our family income for 2013 is likely to be very low, since we started a new business earlier this year — probably between 100 and 250% of FPL. I expect however that our income in 2014 will be higher, likely exceeding 400% of FPL, the level at which the subsidies phase out. A couple of questions: 1. If our 2013 income is low enough to qualify us for Medi-Cal (instead of subsidies) for 2014, can we still purchase health insurance on the exchange? Is there any good reason to do so? For example, I’ve heard that many providers don’t accept Medi-Cal and that the quality of care available may be subpar. 2. I know that if we get subsidies for 2014 based on our 2013 income, they will have to be paid back during tax time if our 2014 income makes us ineligible. But what about the reverse? Suppose we subscribe to a plan in the exchange and pay for it in full, but it turns out that we were in fact eligible for a subsidy based on our actual income. Can we then claim this subsidy amount as a credit when we file our 2014 taxes? Many thanks for your help.

Answer: (1) If your income qualifies you for Medi-Cal, you can choose not to apply for Medi-Cal and enroll in Covered California without premium assistance. And no, there is no good reason to do this, since you would be passing up virtually free coverage for unaffordable coverage - end of story. (2) If you enroll in a Covered California qualified health plan and your premium assistance is underpaid, you can recover what you were due at tax time.

Covered CA and Medicare

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Question: My husband and I are retired and enrolled in Medicare Part A and B. We also have Kaiser Senior Advantage. We pay a total of $395 for Medicare /Supplementary insurance per month. Our only income is Social Security totaling $27000/year. According to calculator it would be cheaper to join Covered CA. Am I missing something?

Answer: People who are eligible for public health insurance, such as Medicare or Medi-Cal, are not eligible for premium assistance in Covered California.

Question: I am working in Europe and plan to return to the US in May 2014. I assume I can enroll with a Covered CA plan when I return? Will I face a tax penalty for the months I was out of the country for not having health insurance?

Answer: Being out of the country exempts you from the individual mandate so there will be no penalty. You will also be eligible for a special enrollment when you return in May 2014.

Agent Ad Rules

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Question: What can agents advertise regarding our role the exchanges?

Answer: You cannot call yourself “certified” until you are. You may only use the approved logo link on your website or e-mail marketing messages. Otherwise you can advertise and prepare clients for enrollment without restriction.

HSA Update Redo

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Answer: According to Michael Lujan by e-mail today, “Covered California will offer HSA-compliant high-deductible plans in both individual and SHOP product portfolios”. It was less than 2 weeks ago that another Covered California spokesperson was quoted as saying there would no HSA qualified plan in the individual exchange, so I hope this is for real.

Question: Phil, don’t get me wrong, I think your website is great and you really know your stuff, but I sent in a couple of questions and you didn’t answer. What’s up with that? A fan

Answer: Here are some reasons not all questions get published answers in this Q&A blog: (1) your question is very specific to you and other readers won’t get anything out of it. I will send you a private answer if you include your e-mail address in the body of the question. (2) I just answered that question or one very much like it recently. The Q&A blog has a search function that you can use to find an answer. Try that first. and (3) I won’t publish political opinions, left or right.

Any HSA Plans?

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Question: I was reviewing the standard plans on the Covered California site and couldn’t figure out which, if any, of the plans are compatible with health savings accounts. Do you know?

Answer: Correction 7-24-13: “Covered California will offer HSA-compliant high-deductible plans in both individual and SHOP product portfolios”. according to Covered California spokesperson Michael Lujan.

Subsidy Fraud a Red Herring?

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Question: It looks like the media has bit into the “subsidy fraud” issue and is chewing on it like a dog with a T-bone. Do you think it’s really going to be a big problem for Covered California?

Answer: They’re barking up the wrong tree by focusing on fraud by applicants who claim lower incomes than actual. At best, they will be getting a loan for 12 months because any excess tax credits will be recovered by the tax collector. The real danger is that people who don’t guess their income correctly will have a painful surprise when they get stuck with a big tax bill on April 15.

Question: I see that prices for subsidies vary substantially between pricing regions. Will I be able to see doctors outside of my pricing region with the plans offered in the exchange?

Answer: Yes. You will be ale to see doctors outside of the pricing region. Provider networks are completely independent of pricing regions. Just to clarify, subsidies DO NOT vary between pricing regions. Your subsidy (premium assistance) amount is a fixed amount based on a percentage of your income. It does not vary by pricing region. The premium rate does vary and thus the net out of pocket payment for those receiving premium assistance varies by pricing region.

Question: Employer sponsored insurance is considered affordable if what the employee pays toward the employee-only premium does not exceed 9.5% of his income. But individuals are exempt from the individual mandate if the cost of insurance would exceed 8% of their income. Wouldn’t that mean that people who contribute more than 8% of their income to the employee-only premium of their group plan are exempt from the individual mandate?

Answer: Yes. Individuals are exempt from tax penalty if the premiums for a bronze policy cost more than 8 percent of their income or their income is below the tax filing limit. Your academic point, while accurate, would be applicable to a statistically negligible number of employed individuals who could decline employer-based coverage, remain uninsured and avoid paying a tax penalty. You must be an attorney :)

Question: Given your recent Q&A regarding no web based interface for Covered CA for the initial open enrollment, what impact will this have on agent online quoting and enrollment services like Quotit, Norvax or HealthConnect? Agents need to know what restrictions this places on those services beginning in October. The service I use refuses to discuss or provide any information as to whether or not they can even provide quoting much less online public access and app/enrollment options.

Answer: They’ll still be in business. Covered California will provide their rates to online quoting services such as those you mentioned, so the those vendors will be able to provide online quoting services to brokers for both exchange and off-exchange plans. However, Covered California will not supply an interface, so their services will lack the functionality to connect to Covered California’s online application or subsidy eligibility process. The way I see it at this point, the consumer who arrives at your website can be interactively engaged with online quoting, but then they will have to be guided or linked to the Exchange website to be logged in with your certified agent ID (perhaps automatically) and complete the tax credit eligibility process there. It is my understanding, that plan selection and enrollment can either take place at the exchange site or a carrier’s site, but we’ll have to see how that works. Stay tuned. For those consumers who obviously not subsidy eligible, you should be able to quote and link to carrier online apps just as you do now.

Question: What’s the latest on agent certification?

Answer: If you missed the Covered California Agent webinar yesterday, here’s the latest on Certified Insurance Agent Training & Certification. - Registration for Training begins on August 19. We will provide a link to the registration form as soon as it’s available. - In-Person Training (8 hours min) begins in September (no date yet). The in-person sessions are expected to be 8 hours in length followed by a 4 hour online course and exam. There will be multiple locations training throughout the state. Training sessions will continue throughout the year. - Entire certification training online training course won’t start until November. - Expect to pay about $60 for the training and you’ll get CE credits. - You’ll need to get 80% or better on the post-training exam to get certification.

Question: I currently purchase my own plus spouse individual health insurance (both retired less than 65). Premiums are terribly high. Will we be eligible to purchase individual insurance from the Health Care exchange plans through Covered California?

Answer: Yes, of course you can. I don’t know why you would think not. Unless there is another question implied. Will you be eligible for premium assistance? Some younger retirees with substantial assets will qualify for premium assistance based on their taxable income alone. Assets are not considered. If you do not qualify for premium assistance, your premiums will be at least as high as they are now but the coverage will be somewhat better.

Is Pediatric Dental Required?

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Question: If I buy on the Exchange for my family, am I required to purchase a standalone pediatric dental plan from the Exchange if I have kids? I have heard it’s one of the essential benefits but it will not be “bundled” with the health benefits.

Answer: So far, no. Standalone pediatric dental coverage is optional. However, there could be more changes coming. As you say, pediatric dental is one of the essential benefits but Covered California chose not have it bundled with the health benefits. Many consumer advocates and others have pushed back saying this is not the intent of the law. Covered California may feel compelled to make an adjustment, but it appears to be too late to have the carriers imbed the dental benefits and submit new rates. We’ll see how the exchange board handles it at the next board meeting in August.

Question: The carriers know exactly what the commissions are for 2014. Why haven’t they released them?

Answer: The carriers submitted their proposed commission plans for approval by the state governing bodies - DOI and DMHC - about 2 months ago. They probably thought that they would be rubber stamped in short order and that’s why they told us that we would see commission schedules in June. But approval was delayed, and at least one of the primary California carriers was told by the DMHC that their commission plan was unacceptable. That took place just 2 weeks ago. So for at least one Covered California insurer the agent commission is yet to be determined. I expect all carriers will release their commission rates together to prevent unfair competition while changes can still be made.

Agent Commissions for 2014?

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Question: What will be the commissions paid to agents selling individual plans in the exchange and out of the exchange in 2014?

Answer: Agent commissions have not been announced yet.

Question: I read today CoveredCa will not partner with for profit web base brokers. Dose this mean they will not certify them or allow them to place business through the exchange?

Answer: No, any licensed agent who completes the required training and passes the certification test can be certified to place business through Covered California. Only individual agents can be certified - not business entities or agencies. The fact that an agent operates a web-based business does not affect his or her eligibility for certification. Covered California has decided to delay, for at least the initial open enrollment period, the electronic interface that would allow web-based agents to connect to the exchange with full functionality. Such functionality would allow an applicant to complete the entire application and enrollment process without leaving the web-based agent’s web site. Federally facilitated exchanges (33 states) plan to provide this interface this year.

Question: How do consumers choose between agents and assisters? It looks like they do the same thing.

Answer: Some things are the same, they will both educate and inform people about options available to them. But you choose an agent because you want to ask the agent bottom-line questions like, ‘What do you think I should do?’ If an unlicensed assister is asked that question they’re going to have to say, “I can’t tell you what to do.” Also, agents do much more than sell insurance. Agents explain critical differences in plan designs and provider networks. This usually involve substantial fact-finding about the client’s needs. Back to your question, these differences will not be obvious to consumers. It’s out job to tell them.

Question: Any chance the Covered California and other individual state sponsored health plans will be pushed back to 2015 too?

Answer: No. Covered California will begin enrolling individuals for health coverage on October 1, 2013 for coverage effective January 1, 2014. If other state-run exchanges are not ready to launch, they will default to federally-run exchanges.

Question: What’s to stop anyone from lying about their income to claim a subsidy?

Answer: The system has two safeguards: (1) During the application process, the applicant’s income will be compared to tax filings, social security data, and income reports; (2) the IRS already has mechanisms in place to recollect subsidies that were overpaid.

No Income Verification?

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Question: I just read that the exchange will accept the applicant’s “word” regarding their household income. Is that true?

Answer: The Feds released a new rule Friday that grants state and federal facilitated exchanges the “discretion” to accept an applicant’s attestation of projected annual household income “without further verification” during the first year of operation - 2014. The rules also allow only random, rather than comprehensive, checks on income eligibility in 2014. Covered California may continue with its plans for comprehensive income verification regardless. We will probably learn more about this at the August board meeting.

Question: If my employer is not required to report which employees are covered under our grou plan, how will the Exchange know if I apply for a subsidy?

Answer: Until now, Exchanges had to verify whether new applicants receive employer-sponsored insurance benefits through random checks. But in final regulations released on Friday by the HHS Department, 16 states, including California, which are setting up their own exchanges, until 2015 to begin random sampling of enrollees’ employer-insurance status. However, California may choose to follow through with random sampling.

Subsidy for Silver Only?

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Question: If the Silver Plan is the only level available for the subsidy, what would be the purpose of applying for any other level of coverage inside of the exchange?

Answer: While the dollar amount of the premium assistance is computed based on the Silver Level, you can apply that amount to any level plan. Those who know they are going to have major medical expenses might opt for the Platinum and those with no health issues might apply their subsidy to a Bronze plan for a lower net premium.

Question: From my understanding, the carriers that are participating in the exchange have to offer the same plans outside of the exchange which are IN the exchange and nothing more. Is this correct?

Answer: Off-exchange, carriers have to offer the standard plans offered inside Covered California without modification. But they are free to offer other benefit designs off-exchange as long as they conform to ACA guidelines such as essential health benefits and actuarial values. This should allow for a little innovation. Also all HSA-qualified plans will be off-exchange.

Question: Cigna (CA) tells me that I can keep my current plan through 2014. Doesn’t everyone have to change to Obamacare on January 1, 2014?

Answer: There is currently a loophole in the ACA that enables health insurers to extend existing policies for nearly all of 2014, thereby avoiding changes under the healthcare law. In california, some carriers, like Cigna, who are not included in the Exchange, are providing individual and small group clients an option to change their policy date to December, 2013. If you accept this option, you will keep your current level of coverage (at a new December 2013 rate) through November 30, 2014. The potential benefits are to lock in a new December 2013 premium through November 30, 2014, a premium that could be less than a 2014 ACA-compliant plan. When coverage comes up for renewal in November 2014, the plan will be closed. The loophole could close because carriers participating in Covered California, such as Blue Shield, Kaiser and Anthem Blue Cross, are lobbying state lawmakers to require individual policies to comply with the federal law by Jan. 1, 2014.

Question: How does the Supreme Court ruling on DOMA affect gay and lesbian couples, married or not, in eligibility for Covered California coverage in 2014?

Answer: The U.S. Supreme Court on Wednesday struck down the Defense of Marriage Act, or DOMA, ruling that legally married same-sex couples are now entitled to the same federal benefits as married opposite-sex couples.

This has implications for Covered California premium assistance. For example, same-sex partners who each have an income of $35,000 may be eligible for the premium assistance tax credits under the ACA - but only if they remain single. If they marry, then they would lose eligibility because their income would be over the threshold 400% FPL for a household of two.

But marriage would be a benefit for couples who have significantly different salaries. For example, say one spouse is unemployed and one earns $50,000. Separate, the unemployed person would qualify for Medi-Cal, but the $50,000 earner would be ineligible for premium assistance. Together, their combined earnings are now low enough to qualify both of them for a Covered California tax credit.

What is a Private Exchange?

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Question: What are Private Exchanges?

Answer: In the most general sense, a private exchange is any website that offers comparative quotes.The term is most often used by various marketers offering agent websites with online interactive quoting. In my opinion, the most legitimate use of the term are those private exchanges set up by very large employers for their employees to dealt with enrollment and claims over multiple carriers offering many plans. California Choice is also an example of a actual private exchange as it offers a choice of carriers and plans but also provides aggregate billing and other administrative services.

Question: When will certification training will be available for Agents?

Answer: I get this question almost every day and we finally got some clarification. Last Friday, Michael Lujan, Director of Sales and Marketing for SHOP announced that registration for Covered California Certification will open August 19 with actual in-person training to take place the first week of September (dates and locations to be announced). Online Certification will follow, but no specific date was offered. Lujan also made it clear these timelines may change.

Question: You have a person who’s on the Exchange with family coverage gets a job with affordable ee not affordable for family coverage “what happens to spouse/children” can they stay on the Exchange?

Answer: In this scenario, the spouse and/or children could continue in the Exchange, but they will no longer be eligible for premium assistance once they have access to employer-based coverage. It does not matter that the family coverage is “not affordable for you. The employer would have to exclude all spouses and children from coverage in its group plan for the dependents to be eligible for subsidized coverage in the Exchange. It is only when the insured’s employee-only cost exceeds 9.5% of income that the coverage is deemed not affordable, making the entire family, including the employee, eligible for premium assistance in Covered California.

Why No Family Rates?

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Question: Does everyone come to the Exchange as an individual? Or, does family pricing exist to offer more advantageous pricing for households?

Answer: Not sure if family rates will be available. They have not been released yet. The sample rates that have been released so far are for individuals only. That was done in the interests of simplicity.

Over 65 - No Medicare

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Question: I’m a US citizen and just brought my foreign citizen mother to the US to live with me (by sponsoring her to become a permanent resident) after my father passed away. She is well over 65 and I’m paying $1600 per month for her health insurance alone with a one year waiting period for many treatments. Can she qualify for the exchange plans if she is well over 65? She does not qualify for Medicare.

Answer: Your mother will be eligible for Covered California coverage once she is a permanent resident. Though she is over 65, she will be eligible because she does not have access to any public coverage - Medicare or Medi-Cal.

Split Subsidy with Employees?

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Question: I employ three people at my small company making what I believe is between 200-300% FPL based on what I know about their family situation. I offer them health insurance as part of their compensation (so that the premiums are paid pre-tax) but have decreased their salaries accordingly. Can I just cut-off their health coverage and send them to the exchange subsidies ? (I would propose them a salary increase equal to half the subsidy they’d get from the state, in essence drawing a new subsidy and splitting the benefit between them and myself? Seems almost certain that we would both benefit and thus find the arrangement attractive).

Answer: A few points you should consider; (1) You can stop providing group health insurance. There is no requirement for groups with less than 50 full-time employees to provide health insurance benefits, (2) The employee’s premium assistance (subsidy) is their private concern. If you base their salary increase on their premium assistance you will be infringing on their privacy in requiring them to disclose it to you, (3) Splitting their subsidies with you is a bad idea and may even be illegal.

Let’s be candid. You are not providing any employee benefit now because you have decreased their salaries equal to the cost of the benefits they are receiving . As a result, they do get a a portion of their incomes pre-tax, but we taxpayers are providing that benefit not you. You would be doing them a great favor by dropping your current health plan at the end of the year and replacing the wages you are withholding.

Question: I recently attended a webinar on Covered California eligibility and they used an example where the mother was eligible for Covered California and the child was eligible for Medi-Cal. How is that even possible?

Answer: The eligibility upper limits for Medi-Cal are different for adults and children - for adults it’s 138% of Federal Poverty Level (FPL), for children it’s 250% FPL. So if the parents’ income is between 138% and 250% FPL, then you’ll get s split public / private eligibility as you described.

Is Obamacare the End of COBRA?

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Question: As I understand it, when the ACA goes into effect, that is effectively the end of COBRA. If you lose, or resign from, a job mid-year (not during the yearly enrollment period), are you allowed to purchase insurance through the exchange at that time?

Answer: If you loose access to affordable employer-sponsored group coverage outside of the annual open enrollment period you will be eligible for a special enrollment period during which you can purchase coverage in the individual exchange. While this eliminates the need for COBRA, the Department of Labor has ruled that COBRA will continue to be available in 2014. One scenario where a person could benefit by staying on COBRA is that it is cheaper than Covered California individual coverage would be.

Acupuncture Covered?

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Question: Will Obamacare cover acupuncture?

Answer: Yes. Covered California has listed acupuncture as an essential health benefit so all individual and small group health plans will include acupuncture coverage in 2014 and beyond. This is great news for acupuncture patients. It’s a mixed blessing for acupuncture providers. They can expect to see more patients, however they will earn less per patient.

Authorized Representative

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Question: Can third party complete an application for Covered California on behalf of the applicant, like a family member or friend? What about an agent?

Answer: Yes. Federal regulations indicate that consumers may designate an Authorized Representative to act on their behalf by signing an application on the individual’s behalf, submit an update or respond to a redetermination, receive copies of the individual’s notices and other communications from Covered California, and act on behalf of the individual in all other matters with Covered California. (1) Authorized Representative is valid until the consumer modifies the authorization; (2) Consumer must notify the Authorized Representative and Covered California that the representative in no longer authorized to act on the consumer’s behalf; or (3) Authorized Representative notifies the consumer and Covered California that they no longer are acting in such capacity.

Question: If someone sold a income property net $100,000 in 2012 to make ends meet which is the retirement monies. Would they be able to get help if normal income is $25,000 per year and single?

Answer: What counts is your current income. If it is significantly different from last year that will be taken into account in the enrollment process. While, last year’s AGI is an important reference point, it’s you current income or your estimate of your income for the current that counts.

Question: My husband has coverage thru the union and is retired. The current individual cost for his plan is under 9.5% of his pension but I am unable to enroll on his plan. Can he drop his current plan so we BOTH can get subsidized on the Covered California plan?

Answer: You may be eligible for an advance premium tax credit in Covered California because you do not have access to an employer (or union) sponsored group health insurance plan. However, even if your husband were to drop his union health plan, he would not be eligible for a subsidy because he has access to group health plan.

SHOP Health Plan Announcement

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Question: Last month, Covered California said they would announce the health plans selected to compete in the small-employer program in early June, but that has not happened. What’s the story?

Answer: The SHOP health plan announcement of participating carriers has been delayed until late July or early August. A Covered California spokesperson cited “concern about rates” as the main issue. They don’t want rates out too soon, “because of competitive reasons”. Not exactly sure what that means, but that’s the official story.

Question: I have 4 separate businesses with 4 payrolls, 4 de-6, 4 tax returns. Each have 20 ft ee’s. Am I considered over 50 or under 50 for penalty sake?

Answer: Yes. Long-standing ERISA rules require that all employees of commonly controlled businesses be treated as employees of a single business. View IRS Publication for further definition of controlled businesses.

Thanks to CAHBA agents David Brabender (Sacramento) and Ted Ruiz (San Dimas) for providing the correct answer.

Question: How does coverage work for dependent children (e.g., college students) or other family members who live out of state? Won’t all their providers/hospitals etc including PCP be out of network?

Answer: That really depends on the plans itself, the ACA nor Covered California have done nothing to change this issue. HMO and EPO plans do not offer coverage out of network, however PPO plans with national or multi-state agreements offer in-network coverage outside of California.

Pre-Tax Premium Reimbursement?

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Question: In a recent post you said, “pre-tax premium reimbursement for employees is debatable”. What is the debate? I thought the IRS had ruled against it.

Answer: Here’s a link to the the question and answer you referenced. Currently, the pre-tax reimbursement for individual health insurance premiums can be accomplished by enacting a stand-alone Health Reimbursement Arrangement (HRA). However, as you pointed out, the Department of Labor ruled that under the ACA, employer-sponsored HRAs may not be integrated with individual market coverage or with an employer plan that provides coverage through individual policies. Why? Because “Section 2711 of the Public Health Service Act (PHS) as added by the ACA, generally prohibits plans and issuers from imposing lifetime or annual limits on the dollar value of essential health benefits”. The debatable part comes from some HRA administrators who believe that if an HRA is structured properly - no lifetime limits and no annual limits - they can still be used to provide tax advantages.

Question: Based on your answer to a recent question, an EPO sounds a lot like an HMO. What’s the difference?

Answer; Yes, but it’s also like a PPO in some ways. An EPO is like an HMO in that their networks are exclusive and do not provide out of network coverage except for emergencies. EPO’s are like PPOs in that they are regulated by the Dept. of Insurance (DOI) while HMO are regulated by Dept. of Managed Health Care (DMHC). EPOs are like PPOs in that they traditionally offer coinsurance plans while HMO’s usually offer copay plans. This later distinction is becoming less defined in the Exchange.

Question: I thought I had heard previously that all QHPs on the Exchange had to offer a plan in every tier, in each geographic region they contract in. However, the ratebook released by Covered CA includes blanks for some tiers. Is that allowed?

Answer: Insurers who are participating in Covered California DO offer a plan at every tier. Where you see blanks, as in the North Los Angeles Rating Region, the carrier may not offer an HMO plan but do offer at PPO plan etc.

Question: A group over 50 with a September renewal but currently only has 30 on the plan. Are they subject to the penalty on Jan 1 or can they wait to Sept to cover the rest? (carrier wont allow additional ee’s until Sept).

Answer: Tough question - I had to get help on this one. Here’s what I found out: “The answer hinges on the ERISA plan year for the group. They must be in compliance on their ERISA plan year and if that too is September then they have until September. If their ERISA plan year was January (even though their insurance renewal was Sept) they would need to comply in January.”

Question: Let’s say a group currently offers coverage and the renewal date is September 1. Let’s also say that the coverage they offer does not currently meet the affordability test but that they plan to make changes so that it will meet the affordability test come 9/1/14. Are the employees of that group eligible to receive a subsidy on the exchange from 1/1/14 through 8/31/14?

Answer: Yes. The employees of your hypothetical group can be eligible for advance premium tax credits in the individual exchange as long as they do not have access to affordable coverage,

Small Business Tax Credit

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Question: It is my understanding that small employers with under 25 employees who are low wage, may qualify for a 50% subsidy in 2014 in Covered CA. If this is correct, will the 50% subsidy continue in 2015 and out, or be phased out?

Answer: Yes. There is a tax credit of up to 50% percent of the employer’s eligible premium expenses for tax years 2014 and 2015. Beginning in 2014 coverage must be purchased from Covered California to qualify for a tax credit. The Small Business Tax Credit has been available since 2010, with a sliding-scale tax credit of up to 35 percent of the employer’s eligible premium expenses for tax years 2010-2013.

Employers that provide health care coverage to their employees are eligible for the Small Business Health Care Tax Credit if:

  • They employ fewer than 25 full-time employees.
  • Annual average earnings wage per employee is less than $50,000 per year.
  • They pay at least 50 percent of employees’ premium cost for health insurance coverage.

Question: My employer (we have way less than 50 full time workers) plans on dropping our group plan and instead offering $200 (apparently pre-tax) to each employee who provides evidence of purchasing a health insurance policy at the exchange. We all have modest incomes and fall within the household income ranges to qualify for a subsidy. Is this a positive step for all of us? Will we be allowed to have a tax favored reimbursement of $200 and a subsidy from the Exchange?

Answer: Yes. This is a good deal for you. You get subsidized coverage in the exchange plus a contribution from your employer. Whether or not the $200 can be pre-tax to the employees is debatable at this point, but even if it gets taxed as income, it’s still a good deal for you and your employer as well - a win-win.

Question: I know that children under 26 don’t have to be dependent on their parents to be covered on a parent’s plan due to Obamacare. But what about children that are independent from their parents? Can they get subsidized exchange coverage even if their parent can cover them through their work?

Answer: Yes you may be eligible for subsidized coverage in Covered California if your parents do not claim you as a dependent on their federal tax return. That’s how the exchange guidelines define “independent”.

Waiting Period?

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Question: As an individual enrolling for health insurance through Covered California (I will also be subsidy eligible) will there be a waiting period before benefits are payable?

*Answer*: No. There is no waiting period for coverage of any specific benefits at all. You will have to wait until January 1, 2014 for coverage to begin. If you enroll after that date but within the open enrollment period, you may have to wait until the first of the month for coverage to begin. If you do not enroll during the open enrollment period, you will have to wait for the next open enrollment period beginning October 15, 2014 unless you qualify for a special enrollment due to a qualifying event.

Question: If my Employer contributes towards my coverage, not my dependents, and is affordable to me, can my family qualify for Medi-cal assuming family will qualify? I understand my dependents will not qualify for a subsidy.

Answer: Yes. There is no obstacle to Medi-Cal coverage for your family based on the availability of affordable employee-only group coverage for you.

Question: My wife will retire in Dec. ‘13 and her employer will pay $100 of a $940 premium for both of us. Would we still qualify for Covered California as an alternative and/or would we qualify for a tax credit? We will both be 62 and our combined income will be $57K.

Answer: It depends. If you will be buying individual coverage and your employer simply give you $100 per month toward the premium, then you would eligible for a tax credit. However, if you still have access to group health insurance after your retirement, you could be ineligible for tax credits, If your contribution to the “employee only” premium is less than $5,415 annually ($57,000 x 9.5%) you will not qualify for a subsidy.

Overpayment of Tax Credit

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Question: My income currently comes from investments. I do not know for sure what my exact income is until the end of a given year. What happens if I estimate that my income will be above the cut-off for Medi-Cal and enroll in a subsidized plan, but at the end of the year find out that my AGI is below the cutoff. You have stated in other answers that if you qualify for Medi-Cal that you cannot get a subsidy through the exchange. Will all of the advanced tax credits have to be paid back due to my income being to low.

Answer: Yes. If advance tax credits are overpaid any tax year, the overpaid amount will be recovered at the next tax filing by essentially returning the overpaid “tax credit” to the “tax due” column.

Question: I have a son with Autism. We’ve had Kaiser for years. First as a fully funded plan so he was protected by CA AB88 in that there were no limits on his therapies. No we have a self funded plan which is regulated by ERISA and we are subject to limits. Being that I assume Kaiser will be a ‘grandfathered’ plan and exempt from ACA mandates, I am concerned that we will have to continue to deal with unfair limitations with my son’s therapies. When shopping for coverage, how can I guarantee that we will not be faced with limits on a 2014 policy? How does the ‘Government Option’ work? What is the best way to compare ALL plans available when dealing with a specific health issue?

Answer: Assuming your employer continues self-funding their employee health coverage, the plan will, as you say, be exempt form the ACA mandates and not cover autism treatments very well. Purchasing an ACA qualified individual plan, either in Covered California or off-exchange, will provide better coverage for autism and you will have to weigh that against the additional cost of purchasing coverage without employer cost sharing. You will be able to compare all plans the the Exchange and off-exchange on the CAHBA.com website, starting in September 2013.

Question: I have a preexisting condition and can’t get health insurance. PCIP has stopped taking applications. Is there any other way I can get covered between now and Jan. 1, 2014?

Answer: Yes. PCIP/MRMIP applications are being screened for eligibility for the Major Risk Medical Insurance Plan. MRMIP, the California state high risk pool is still open for new enrollment and available for individuals with pre‐existing conditions.

Individuals may qualify for MRMIP if:

  • They are a resident of California.
  • They have a pre‐existing condition as shown by:
  • A denial letter from a health insurance company or health plan dated within the last 12 months, or
  • An offer of individual (not group) health coverage with premiums that are higher than the rates of your first MRMIP plan choice. The offer letter must be dated within the last 12 months, or
  • Involuntary termination from a health plan, Health Insurance Company or employer plan for reasons other than fraud or non‐payment of premiums. The involuntary termination letter must be dated within the last 12 months.
  • They are not eligible for Medicare Part A and Part B (except for end‐stage renal disease) or for COBRA or Cal‐COBRA benefits.

For more information about the MRMIP or to request a copy of the PCIP/MRMIP Application and Handbook, please www.mrmib.ca.gov, or call 1‐800‐289‐6574.

Question: I am unemployed but have access (for a while) by belonging to a realtor-associated organization. They offer group coverage - does that disqualify me from signing up for the Cal Exchange and getting a health ins subsidy? If that is the case, can I quit the organization and then be eligible for the subsidy?

Answer: Your eligibility for a subsidy (advance tax credit) in Covered California will depend solely on your income. While you currently have access to health insurance through an association, this is not an employer-sponsored plan because there is no employer cost sharing.

Question: Would Medi-Cal or continued enrollment through a parent’s employee plan be better for a 21 year-old college student? I work part-time and attend school. My father does not claim me as dependent on his federal tax returns.

Answer: You are eligible for Medi-cal. That means your out-of-pocket costs for medical expenses would be next to $0 and your parent’s costs would be reduced to $0. So unless money means nothing in your family, I’d have to say Medi-Cal is the better deal.

Question: I am currently on COBRA benefits paying over $900/month. How do I find an exchange to enroll in under the ACA and when can I enroll? Thank you.

Answer: The California exchange is called Covered California and you can enroll beginning October 1, 2013 for coverage effective January 1, 2014.

HSA Funds

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Question: Since HSA may not exit or may be less attractive than subsidized plans, What should I do with the funds in my HSA? Can I use the funds for medical expenses in a non HSA plan?

Answer: The funds that you have saved in a HSA account can be used for medical expenses at any time, even if you no longer have HSA qualified health insurance.

No Dependent Coverage Offered

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Question: I work for a small company that offers affordable health insurance for me, but does not offer any dependent coverage at all. My spouse is unemployed. Can my kids/wife qualify for a subsidy on the exchange?

Answer: To my knowledge, Covered California has not addressed this issue directly. But according to a recent IRS ruling, your dependents will not be eligible for subsidies in the exchange if they have “access” to employer-sponsored coverage. If your employer excludes spouse and dependent coverage then your spouse and dependents can be eligible for subsidized Covered California Coverage. But if spouse and dependent coverage is available even though the employer makes no contribution they will not be eligible for subsidized coverage. In that case, you would better off if your employer dropped the group plan. If I were you, I would talk to your employer about poling the other employees to see how many would similarly benefit.

Question: The Silver HSA plan was expressly eliminated at Covered California’s May 8, 2013 meeting “because this will interfere with the calculation of subsidies”, and the same logic would apply to Bronze plans. Since “the board was disinclined to allow alternate plan designs in the individual market” we see in the “Final” CC Health Plans Booklet only a non-HSA Bronze plan. So aren’t HSA plans officially dead now, and if not, why didn’t Covered California mention them in any of their late May press releases? (Quotes from Health Access Blog)

Answer: I’m not entirely sure what the Exchange Board might eventually do about the HSA plan, but I sense some wish-fulfillment in your question. Consumer advocates say that HSA plans are unsuitable for low-income consumers. I agree. Being underinsured is a chief cause of financial disaster for families without the financial resources to deal with large out-of-pocket expenses. The IRS sets minimum deductible levels for HSA-compatible health plans to give users of the HSA tax break “skin in the game”. On the other side of the coin, ACA cost-sharing reductions help low-income people (less than 250% FPL) cover the cost of health insurance deductibles, co-payment and coinsurance bills. This same demographic may be attracted to HSAs because they are relatively cheap, but the problem is that the plan variation caused by reduced cost-sharing is no longer HSA-qualified. The bottom line is that HSA plans cannot be purchased by those with incomes below 250% FPL. - those most vulnerable to catastrophic financial loss. There is still a place for the HSA plan - a financially sound method of funding healthcare for many Californians. Covered California will pass up on a substantial portion of the non-subsidized individual health insurance market if they do not offer an HSA plan.

Question: I have been paying the Blue Shield premium for my 52 year old son who lives in my home. He is unemployed and because he has a pre existing condition I didn’t want him to loose coverage. The current rate is $435 a month for basic plan ($5500 deductible.) While he filed a tax return last year with AGI of under $2,000 I declared him a dependent on my return. Can he qualify for the exchange and if so must he use household income (my income)? Because I can’t afford the premium I have been considering cancelling the policy but continue to borrow from credit cards to keep the policy in place. How can I get my son switched over to the exchange with applicable subsidies?

Answer: Your son will be eligible for Medi-Cal based on his income. In this case, the fact that you claim him as a dependent will not be an obstacle to his eligibility. Your son can be enrolled in Medi-cal anytime after October 1, but his coverage will not be effective until January 1, 2014.

How Are Premiums Paid?

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Question: What will be the mechanism for the payment of monthly premiums in the Exchange?

Answer: The premiums are collected by the health plan issuer (insurance company) not Covered California. So you would get a bill from Blue Shield or Kaiser just as you do now. If you are eligible for a subsidy, the subsidy money goes from the federal government directly to the carrier and the carrier bills you for the remainder - the net premium amount.

Question: If the subsidy is really an “advanced tax credit” how does a low income person (no income tax paid) pay the premiums? From your site: Estimated monthly silver plan premium (without subsidy) $1,369. Estimated tax credit from the government $1,280 Your estimated monthly silver plan premium $89. I cannot pay $1,369 and I am on early Social Security so I do not pay income taxes. Please help! Several of my friends are in the same situation and we all think we have to pay a penalty for no insurance and wait until we turn 65 for Medicare.

Answer: You will only pay the net premium after the “tax credit” which is $89 per month. Furthermore, the IRS only recovers tax credits that have been overpaid. In your case there would not have been an overpayment (that is, a person received more tax credit than their income justified) so in your case no tax would be due, Hope this helps you to sleep better.

Question: I would like to keep my current individual health plan if possible, because it has a broader provider network than the Covered California plans. Does my plan have to be grandfathered or does the plan simply have to have benefits which constitute minimum essential coverage for me to be able to stay in it?

Answer: Your plan would have to be grandfathered. If you have been continuously covered on the same plan since March 23, 2010 or earlier your plan is grandfathered. It does not have to provide minimum essential benefits.

Question: For Covered CA plans, are deductibles included in the out-of-pocket limit. When I was shopping for individual plans earlier this year for 2013, I believe Kaiser included the deductible in the OOP limit so the max of my cost-sharing is the OOP limit, but for Anthem deductibles weren’t part of the OOP limit so the max of my cost sharing is the deductible plus the OOP limit. Will it continue to differ by company in the 2014 Covered CA plans or is this standardized?

Answer: Yes. Deductibles are included in the out-of-pocket maximum for all plans both in Covered California and off-exchange. Standard plans is one of the primary consumer benefits afforded by the ACA. The current situation you described above made it impossible to compare plans across all carriers on an apples-to-apples basis.

Calculator is Way Off

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Question: My 2012 1040 had an adjusted gross of $57,000. I have just started getting social security at 62. I did the calculator on the covered California site and it seems to indicate that at $57,000 I would pay $458/month for myself and my wife (age 60) With my added social security bringing my income to $70K my payment would jump almost 400% to $1600/month. I hope I am making some fundamental error here.

Answer: No you did not make a fundamental error, but the difference between subsidized and non-subsidized premiums will not be nearly as high as the calculator indicated. The calculators used projected rates which turned out to be much higher than the rates just announced. The new rates need be loaded into the calculator.

Question: My company (as of June 1, 2013) will no longer offer any non-Kaiser health insurance plans. We prefer to use the doctors we have established relationships with. If we want insurance, we will have to take a Kaiser plan for the next 6 months - but then can we drop this insurance mid way through the year in favor of another plan from Covered California? If you calculate the “affordability” per your earlier answers, my employer’s plan costs (for employee only) are less than 9.5% of my AGI. Thanks.

Question: You can opt out of your group plan at open enrollment only. I wouldn’t advise that you do that June 2013 because there will be no guaranteed-issue coverage available at that time. If you opt out of your employer-sponsored coverage in June 2014, you will then be able to enroll with the carrier of your choice, in exchange or off exchange. You will not be eligible for subsidized coverage however.

Insure Kids Only?

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Question: Can I purchase insurance to cover only my teenagers? My employer’s insurance is very expensive for dependents. I do not need insurance as their parent. I do not want it, just for my kids.

Answer: You can purchase Covered California coverage for your children, but if your employer-based coverage is deemed “affordable” for you, your kids will not be eligible for a subsidy. The ACA says that someone with access to affordable employer-sponsored coverage cannot get a premium subsidy from state exchanges in 2014, unless the cost of the employer-based health care coverage for that employee exceeds 9.5 percent of the worker’s household income. The IRS recently ruled that the calculation of affordability will be based on the cost of employee-only coverage, not family coverage.

Question: I currently have an HSA plan which I enjoy having. I particularly like that I can pay cash and get stuff taken care of without a lot of fuss (dental coverage tends to be weak, and I use a doctor that does weekends for a price). What’s the status of HSA plans in the exchange?

Answer: Update 7-24-13: According to Covered California’s Michael Lujan in an e-mail message to agents today, “Covered California will offer HSA-compliant high-deductible plans in both individual and SHOP product portfolios”.

Question: I read on another site that there are several exceptions (Native American, financial hardship, etc.) in which case they would trust someone over 30 to buy a catastrophic policy. Is is true that if the cheapest Bronze plan is over 8% of my 2013 income that I would be eligible?

Answer: Yes. If one has received a certification from the Exchange that they are exempt from the individual mandate because they do not have an affordable coverage option or because they qualify for a hardship exemption they will be eligible for enrollment in the catastrophic plan even if over 30 years of age.

What is an EPO?

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Question: Looking over the providers that will be available in my area (San Diego), I note that the Anthem Plan is an “EPO”. I know what a “PPO” is, that is what I have had for years, but I am wondering what an “EPO” is, other than a drug that will get you kicked out of the Tour de France. What are the similarities/differences between a PPO and an EPO ?

Answer: EPO stands for “Exclusive Provider Organization” plan. As a member of an EPO, you can use the doctors and hospitals within the EPO network, but cannot go outside the network for care. There are no out-of-network benefits.

Question: It appears from the rates out today that the subsidy level is fixed not the premium as an earlier question indicated. I thought the premium was a % of income, can you clarify?

Answer: The net premium for those eligible for a premium subsidy is a percentage of income. You may have been confused by a table such as the one below, that was released with the announcement of the new rates. This is an example of the rates a 40 year old single individual might pay (net after subsidy) in Region 16 (Los Angeles - South) for a Silver Plan.

LASouth.png

That amount shown in each box at the top and in black is the net premium due after subsidy. The premium subsidies are shown in green. While this is a fixed number, it is derived as a percentage of the total premium and that percentage varies with income.

The net cost of a silver level plan after subsidies can be computed using a percentage of income on a sliding scale as follows:

  • Up to 133% FPL - 2% of income
  • 133 - 150% FPL - 3% - 4% of income
  • 150 - 200% FPL - 4% - 6.3% of income
  • 200 - 250% FPL - 6.3% - 8.05% of income
  • 250 - 300% FPL - 8.05% - 9.5% of income
  • 350 - 400% FPL - 9.5% of income

Question: I understand that under the new 2014 Covered California health plans pre-existing conditions are covered. However, will there be a waiting period before any benefits covered are payable? In particular if I currently have coverage under one insurer and in January 2014 change over to a different insurer on the exchange?

Answer: No. There will be no waiting period before any benefits are covered,

Affordable But Skinny

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Question: If I understand the Affordable Care Act correctly, if an employer offers a low-benefit, or “skinny”, healthcare plan, where the employee’s premium would be less than the 9.5% cap of AGI, then if I were to choose to go to the exchange, I would NOT be eligible for subsidies because my employer offered a plan, even though it was very poor. Is this a correct reading of the law? Would this be true even if the plan was better than a “skinny” plan, but worse than what I could get through the exchange — that is, I would not be eligible for premium subsidies? If so, it sounds like it would be better for an employer not to offer any plan, or that getting a new job is an imperative under such circumstances.

Answer: You raise several questions interesting issues. (1) Yes. If you are offered affordable employer-sponsored coverage (employee only premium cost is less that 9.5% of income), you will not be eligible for a subsidy regardless of how poor the coverage. (2) But employer-sponsored health insurance will eventually match the Exchange minimum coverage requirements, and (3) there will be some situations when it will be a win-win for both employees and employers not to have a group health plan, for example a small group (less than 50 employees) with a majority of low-income employees.

Question: If I am over 65 and not yet eligible for Medicare, as a recent immigrant, am I eligible to purchase individual coverage through the exchange? If not, what are my options? Will there be guaranteed issue coverage outside the exchange?

Answer: If you are a legal resident, you will be eligible for Covered California coverage even over age 65.

Medi-Cal or Covered CA?

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Question: Should i get private health insurance for my children or go on ca medi-cal in 2014.

Answer: If your children are eligible for Medi-Cal, you should definitely enroll them. You have the option of not enrolling in Medi-Cal, but if you are eligible and opt out, you will not be eligible for premium subsidies or cost-sharing reductions in Covered California. That would make coverage for your children prohibitively expensive.

Question: Is the federal subsidy based on the total household income of a person/family or just based on those person(s) enrolling in Covered California? For example, could a couple “work” the system by enrolling as 2 separate individual policies and base the subsidy on his/her own earnings instead of a combined earnings total?

Answer: The household income on which the advance tax credit eligibility is based for a married couple would usually be the total income. This would be verified by IRS data showing joint income for federal income tax purposes. So in this scenario it would be very difficult to game the system. The subsidy would be calculated on the joint income even if one of the spouses did not apply for subsidized coverage in Covered California (example: one spouse on Medicare). In this case, the percentage that the couple’s subsidy represents for dual coverage in a Silver Level Plan, could be applied by one eligible spouse for the purchase on any qualified plan in the exchange.

Question: Will a Broker be allowed to have his unlicensed staff be certified to enroll clients in CoveredCa. Other AEE,s employing assisters and navigators are unlicened.

Answer: No. Only, a California licensed agent or Assister can be certified by Covered California. Unlicensed agency staff may assist consumers but may not assist enrollments in Covered California. Furthermore, an agent may not employ employ or otherwise provide financial renumeration to certified assisters for enrollments in Covered California. In-person assisters and and navigators can only assist enrollments in the exchange on behalf of certified assister entities. They are not free to act independently.

Question: I am retiring at 62 and want to use my income from my retirement accounts. if i draw social security will this count as income and will the money i draw out from my ira’s count as income? i plan to sell 66k from my ira’s each year till 65. is this 66k considered income and thus will disallow me from a subsidy? i would augment this 66k from my ira stock sales with 20k from social security. thanks for your help

Answer: This is a correction. I answered this question incorrectly previously. Your IRA withdrawals are taxable and if the amount withdrawn is $66,000, then at least some of your social security income will be taxable as well. All of this income will be considered thus may disallow you from a subsidy depending on the size of your family.