Question: How will the Exchange handle the flow of premiums? Will policyholders pay the Exchange or the insurance carrier that issued their health plan? Will the federal subsidies go to the insured or the Exchange?
Answer: Individuals and families who enroll in qualified health plans in the California Exchange will pay their premiums directly to the health insurance companies who issued the insurance policy. In the case of individuals with federal subsidies, the U.S. Department of Treasury will make direct deposits to insurance companies of federal subsidies such as Advance Premium Tax Credits (APTC) and Cost-Sharing Reductions (CSR).
Conversely, the SHOP Exchange will bill the employer for the aggregate monthly premium for the group’s employees. The monthly premium payment is a combination of the employer contribution and employee pre-tax payroll deductions for the employee responsibility. The employer writes one check to the Exchange and the Exchange platform disburses the appropriate premiums to each employee-selected carriers.