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Covered California Q&A

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

October 2012 Archives

Question: Obamacare requires insurers to submit all premium rate increases of 10% or more for state or federal review. Is this helping to reduce rates?

Answer: Yes. The average health insurance premium increase would have been 6.8% without ACA rate review, while the average rate change implemented was actually 5.4%. The ACA provision that requires insurers to submit all premium rate increases of 10% or more for state or federal review is working. About one in five requests by insurers to change premiums were denied, lowered or withdrawn during state review. During the eight-month period before the Sept. 1, 2011, implementation of the rate review provision, 33% of filings requested an increase of 10% or more. In the last four months, fewer than 18% of filings were for an increase of 10% or more.

Question: Does an increase in rates qualify as a qualifying event to change insurance outside of open enrollment.

Answer: Just so you know, we're getting ahead of ourselves here. Covered California ) is months away from making a definitive ruling on this issue. However, I can answer your question with an educated guess because the ACA speaks to the affordability issue. For example, if you are offered employer-sponsored coverage in July and your contribution for that coverage exceeds 9.5% of your income, you can opt out of your employer's group and enroll in a qualified health plan through the Exchange and this could be done outside of the annual open enrollment period starting in October.

Question: Why does the California PCIP program require 6 months without insurance prior to applying for coverage?

Answer: PCIP has a limited amount of money and the program was created to cover people without coverage because of preexisting conditions. PCIP was concerned that some consumers would cancel their current coverage to sign up with PCIP because it was a better value than their current coverage.

Qualifying for Subsidy

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Question: If i qualify for a subsidy in 2014, can I enroll through a private exchange and still have the premium subsidy?

Answer: Only Covered California can qualify an individual or family for a premium subsidy. Private exchanges are expected to have the ability to electronically hand-off a client for income verification and final enrollment at Covered California. From the client’s point-of-view, the experience of shopping, deciding, and applying remains with the private exchange or web-based agent.

Do Assets Count?

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Question: Is the subsidy only based on yearly income?? What if I have alot of assets but low income?

Answer: Only your income is considered. Covered California will qualify you financially based on your adjusted gross income from last year’s tax return.

Outside of Open Enrollment

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Question: Can you enroll after open enrollment period in the California health benefit exchange?

Answer: Enrollment outside of the annual enrollment period will be possible is the applicant has experienced a “qualifying event” such as (loss of employment, marriage, divorce, child birth, immigration documentation, etc.)

AB 1642 and ACA Conflicts?

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Question: Is the “small employer” definition of 1 to 100 employees under the ACA only applicable to participation in the exchanges? For instance, can an insurance carrier that is not participating in the exchange still deem a group of 51 and over “large” after 2016? I am trying to ascertain if this new definition is universal. Most carriers “must offer” insurance to small groups (usually 50 and under) - will they now have to offer to groups 100 and under even if they are not going through the exchange?

Answer: In California small group health insurance is governed by a state law - AB1672 - which protects businesses with 2-50 employees. The question you raise is about potential conflicts between California law and federal law - the Affordable Care Act. No worries. The California legislature has already shown itself to be more than willing to modify state laws to insure Covered California is successful.

Is Premium Subsidy Taxable?

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Question: Are low income premium subsidy dollars considered taxable to members?

Answer: No. The ACA calls to the premium- subsidy an “advanced tax credit” and is therefore not taxed as income.

Question: I work part time for a very small company and may have an opportunity to be full time. I don’t need health insurance as I have it through my husband. My employer has less than 10 employees and does not offer health insurance. My question is are they required by law to provide me insurance? As I said I don’t need it and I think if they do have to it will cause them to give me less hours as they can’t afford to pay health ins.

Answer: No. There is no law that requires an employer to provide any portion of the health insurance costs for it’s employees. In 2014, when the ACA is fully effective, larger employers will pay a tax for not providing affordable health insurance for its employees, small employers (less than 50 employees) will not be required to provide health insurance even then.

Question: Do providers have to participate in the California Health Benefit Exchange?

Answer: Providers like doctors and hospitals will not contract directly with Covered California. They will continue to have contractual relationships with the health insurance carriers that sell their plans in the Exchange.

Question: My husband and I were enrolled in his former company’s group insurance plan and when he left the company 3 months ago we decided to go with Cobra instead of enrolling under my company’s group insurance plan because of a medical treatment that they provide coverage for that we need, that my company’s insurance plan does not cover. My question is I don’t know how long we can afford to pay the high Cobra premium. We pay 100% out of pocket for the premium, no government subsidy. In the event we lose Cobra because we can’t afford to pay the premium, will it be considered a qualifying event for us to enroll under my company’s group insurance plan? Thank you.

Answer: No. Unaffordable coverage is not a qualifying event. So you’ll have to wait until your employer’s open enrollment period to sign up.

Employer won't let me opt out?

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Question: My wife and I are both have group health insurance plans through our respective employers. I would like to drop my own coverage and be added to hers, however my employer is refusing to allow me to waive coverage unless “I am the primary subscriber, not a dependent, in an employer-sponsored group medical plan or retirement medical plan.” Is this legal? Why would they want to force me to maintain my insurance with them anyway?

Answer: I don’t know if this practice is actually “legal” in your state or not, but it really does’t matter. If there’s a law against it, it’s not being enforced. The insurance companies created this guideline (let’s call it the “Primary Employer Rule”) to even the playing field among employers and avoid disputes like this. This guideline may seem arbitrary, but If all employers follow the standards there will be fewer misunderstandings. In this case, the *Primary Employer Rule *does not benefit your employer because they would save money if you left their health plan for your spouse’s plan, but it all works out in the long run.

Question: Is it not a fact that federal premium subsidies are another form of social welfare?

Answer: If you get health insurance from your employer, you’ve been receiving a generous public subsidy for years. The higher your income is, the larger your subsidy relative to your lower-income colleagues. That’s because the contributions your employer makes toward your group health insurance premium is a tax-deductible business expenses and non-taxable compensation to the employee even though it is a form of compensation. Estimates of the total dollar amount of that subsidy range between $200 billion and $300 billion a year, depending on what taxes are included in the analysis (only federal income taxes, or also payroll taxes and state income taxes). Estimates consistently show that high-income earners receive the bulk of that public subsidy.

Question: Why is the Exchange an essential part of Obamacare?

Answer: Many large California companies like Cisco, as well public entities like CalPers and labor unions, create their own private health insurance exchanges. These private exchanges provide the employees of that company a side-by-side comparison of the different insurers’ from which to choose. The health insurance plans permitted on the exchange are typically chosen by the company’s employee-benefit department. Since insurance carriers compete to be included, the employer can regulate these companies’ behavior during and after the enrollment period.

Covered California was created in a sincere attempt to offer millions of low-income and uninsured Americans the health benefit choices enjoyed by workers at large US companies, government entities, and unions. The objective is to help those with family incomes above 133 percent of the federal poverty level (currently about $30,000 for a family of four) buy guaranteed-issue, community-rated, federally-subsidized, private health insurance.

The Exchange will do almost the same thing that big companies do for their employees for those who don’t get their healthcare at work. The Exchange will decide which health plans they’ll offer, make it easy for users to compare coverage and select a plan, and assist in enrollment in a private health insurance plan through the Exchange.

Will the Exchange be Cheaper?

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Question: I work for a big retail company that has a health plan but I can’t afford it. My cost to insure my family would be almost 30% of my wages. Will the Exchange be cheaper for me?

Answer: Yes. In 2014, your contribution for employer-sponsored health insurance cannot exceed 9.5% of your wages or your employer will pay a penalty called the play or pay tax. Also, if your employer does not offer you affordable health insurance (below 9.5% of your wages), you will be free to shop for your own coverage at the Exchange where you may save more if you qualify for premium subsidies.

Question: My husband and I are both self employed. We pay $2200.00 out of our pocket for health insurance. It is breaking us. I have a number of pre-existing conditions. Please what are our option. We are going to have to drop our insurance because we can no longer afford to pay the premiums.

Answer: I hope to answer your heartfelt plea with some actionable advice. I’m not sure I can, but I’ll give it a shot anyway. The first move is to talk to your insurance company about another plan with a lower premium. But if $2200 per month for 2 people is the lowest you can get it, I’ll take your word for it, you “can no longer afford to pay the premiums”. If that is truly the case, here’s an option (I would not recommend this except in extreme circumstances). You will have to go without health insurance for 6 months, so stock up on prescription drugs and get any necessary medical care out of the way before you quit. It will cost you a lot less than currently and it’s adequate coverage. If you can’t afford to get both you and your husband covered, the person with the highest health risks or most expensive prescription drugs drugs should get covered first. In January 2014, you will be able to buy Obamacare at the same price as everybody else and probably get a federal subsidy to help pay the premium. I wish you the best of uck.

Question: I’m 21 years old and out of college, making 50k a year and I also receive health care thru my employer. My father has no insurance and makes 35k. My younger sister lives overseas but she will be moving here to nj as she cannot live with my grandmother anymore. We are permanent residents living here 5+ years, my father 10+. My sister is 16, she has epilepsy, ADD and depression. She needs constant check ups with theneurologist, psychaitry and daily medication. Is it possible to add her under my employers insurance (horizon hmo)? If not what other options do we have based on our income? Thanks in advance!

*Answer: * No. You cannot add her to your group plan. But your sister should move to New Jersey as soon as possible, because NJ is one of the few states that have guaranteed-issue individual health insurance. What that means to her is that she can buy health insurance from any insurance company in NJ at the same rate as her healthy neighbor.

Qualifying Event Or Not?

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Question: I’ve viewed your list of qualifying events but still have a question. I have a group plan at my work that covers my family, but I pay a large premium for it. My wife recently landed a new job where she has no-premium coverage for the entire family. This is item 3 on your list. My employer is refusing to let me drop my family coverage because it is outside of the open enrollment period. So, the question is…are all of the listed qualifying events compelled by law? I’m in California. Thanks.

Answer: Your employer could be proven wrong by the right HR lawyer, but it may cost you your job. I would suggest you weigh your job against the cost of waiting for your company’s open enrollment period to opt your family out of your employer’s plan. This creates a qualifying event for your wife and kids and she can enroll in her employer’s plan at that time.

Pregnant & Need Insurance

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Question: As of right now I am on my dad’s insurance through his work. I lose coverage on Oct. 27th (my 26th birthday).I am also 5/6 weeks pregnant. No insurance will cover me and my husband. What can I do for coverage once mine drops at the end of this month?

Answer: As you know now, you can’t buy private health insurance once you are pregnant. But many states have resources for exactly your situation. Some state programs are for low-income moms and some not. Worth at try. Start your search at coverageforall.org, enter your ZIP code and go.

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