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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.

April 2013 Archives

Tax Return or Current Income?

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Question: I have a 2012 tax return that makes me not qualify the subsidies, but I lost the job now and don’t have income for 2013. Can I still qualify the subsidies?

Answer: Yes. Last year’s tax return is only a starting point that is helpful for people who don’t readily know what their taxable income is. If your current income is different than it was a year ago, the Covered California eligibility and enrollment process is flexible enough to adjust to the current income reality.

Keep Doctor?

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Question: Will I be able to keep my own doctor under the california health benefit exchange?

Answer: Each insurance company offering qualified health plans in the Covered California exchange or off-exchange will have a somewhat different provider network (doctors and hospitals), so it’s likely that you can find a plan that includes your doctor, but there’s no guarantee.

Question: I am a self employed individual. How do I calculate my income - on gross income or on net income after expenses/taxes?

Answer: Use your net, pre-tax income. More specifically it’s the adjusted gross income (AGI) that shows up on line 37 of your Federal Form 1040 . Keep in mind that this number is only a benchmark. If your income has changed since last year you will have the opportunity to make the adjustment when checking your eligibility for advance tax credits (premium subsidies).

Question: If an employer’s group coveragage renews on 6/1/2014, can a person’s spouse or dependents decide at that point that they don’t want to retain the employer covarege and enroll in Covered California? Or have they missed the window of opportunity because the open enrollment for Covered California has ended? I realize they won’t be eligible for a subsidy perhaps, but I’m more concerned about the timing and a voluntary election to come off of the employer plan. Not sure if that is a true QE (qualified event) in Covered California’s eyes during the 2014 calendar year.

Answer: If your spouse or dependents were to opt out of your employer-sponsored group plan at the next renewal date (June) , the would qualify for special enrollment in Covered California. A voluntary loss of coverage is still a qualifying event.

SHOP Delay In California?

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Question: Since the federal government announced that the Small Business Health Options Program (SHOP) will be delayed until 2015. Small-business employees will still be able to get insurance, but the states have the option to limit that to one choice, rather than a variety of plans, for the first year. How does this affect Covered California?

Answer: Federally facilitated SHOP exchanges will lack employee choice and aggregate billing until 2015. Covered California’s SHOP exchange will be fully functional as designed with both of those features in 2014. What that means to California workers is that they can choose a plan from any carrier in the SHOP. Employers will choose the metal level of the plans offered to their employees and get an one aggregate (combines different carriers) monthly bill from the SHOP.

Quit Group for Exchange?

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Question: Can small employers let employees opt out of group plan to join the exchange?

Answer: An employee of a small business can opt out of the employer-sponsored group health plan. (It’s not up to the employer.) However, the employee may not be eligible for a subsidy in Covered California if they have access to “affordable” group health insurance. What is affordable? Read my article, Bad News for Families with Modest Income” to understand the affordability rule. This “catch 22” was not hatched by Covered California, nor the Affordable Care Act, but by the IRS.

SHOP Group Minimum?

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Question: Currently all health plans in California require a minimum of 2 employees to be considered a small business for purposes of purchasing group health insurance. Do you know if this minimum will be the same beginning in 2014? Or, will sole practitioners be required to be covered as either individuals or on a spouse’s policy?

Answer: The Covered California SHOP will stick with the 2 employee minimum for small group coverage. Sole practitioners will be required to have health insurance or pay a tax penalty. They can purchase their coverage in exchange or off exchange.

Pediatric Dental

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Question: Will there be inclusion of dental care for children under the aca in california?

Answer: Yes. Pediatric dental coverage is included in qualified health plans to be offered in Covered California. What that means to you is you won’t have to pay extra for dental coverage for your kids to age 19. To see what’s covered click on the following link. Supplemental Dental Benefit - Ind.pdf

Kaiser in Covered California?

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Question: Will kaiser be a provider on covered california?

Answer: We don’t know officially, but you can count on it. In the next 3 or 4 weeks we should know the Covered California carriers and their preliminary rates.

SHOP Subsidies?

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Question: I run a small business with 7 employees. Most of them would qualify for subsidies. Are subsidies available for employees in SHOP exchange?

Answer: Subsidies for individuals will not be available in the SHOP, but your business may qualify for a Small Business tax credit. What that means is you can get a tax credit as much as 50% of the premiums you pay for your small group health insurance in 2014 and 2015. If you do not offer group health insurance your employees may apply individually for coverage through Covered California for subsidized private health insurance or free public coverage through Medi-Cal. I suggest you use a licensed health insurance agent to help you weigh these options.

Question: I share my house with a 51 year old woman. Her income is below the federal poverty level. She currently has no job and no health insurance. I think in 2014 she could be eligible for Medi-cal under the ACA. Our finances are separate and we files individual returns. If my income is combined with hers for household income and that would exclude her from Medi-Cal. We are not married and have no common children. Does only her income count in this case?

Answer: Covered California would view you as individuals, each with their own income, which would be used as the basis for assistance eligibility either for Med-Cal or Covered California tax credits (subsidies).

ACA and Medi-Cal Asset Recovery

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Question: If someone under the age of 62 below the FPL enroles Medi-Cal in 2014 under the ACA, will their assets at death be subject to the asset recovery process similar to the current Medi-Cal process? Also any assets they acquire or inherit after enrolment, will those also be subject to the Medi-Cal asset recovery process?

Answer: The asset recovery process to which you refer applies to Medi-Cal’s payment for custodial care. If a person needs non-medical assistance with daily living in the form of home care or nursing home care there are asset requirements for eligibility and asset recovery after death. These requirements have not changed as a result of the ACA and will continue beyond 2013.

Question: If I do not sign up with Covered California during the open enrollment period, what happens if I want to enroll later?

Answer: 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 a special enrollment> Special enrollment periods triggered by:

  1. A qualified individual or a dependent’s loss of Minimum Essential Coverage;
  2. A qualified individual gains a dependent or becomes a dependent;
  3. An individual not previously a U.S. citizen, U.S. national or lawfully present gains such
  4. status;
  5. A qualified individual’s enrollment or disenrollment in a Covered California Plan (CCP) is unintentional, inadvertent, or erroneous as a result of an error, misrepresentation, or inaction of the staff or instrumentalities of Covered California or Health and Human Services. In such cases, Covered California takes necessary actions to correct or eliminate the effects of an identified determination error, misrepresentation or inaction.
  6. An enrollee adequately demonstrates that a CCP substantially violated a material provision of its contract in relation to the enrollee.
  7. An enrollee is determined newly eligible or newly ineligible for advanced premium tax credit (APTC) or has a change in eligibility for CSR;
  8. An individual whose existing coverage through an eligible employer-sponsored plan will no longer be affordable or provide minimum value.
  9. A qualified individual or enrollee gains access to new CCPs as a result of a permanent move; also applies to individuals recently released from incarceration.
  10. A qualified individual who is an Indian may enroll in a CCP or change to another from one time per month.

Initial Open Enrollment Period - October 1, 2013 through March 31, 2014 Subsequent Open Enrollment Period - October 15 through December 7 annually

Can I Really Keep My Plan?

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Question: President Obama says that if I like my plan, I can keep it. My family is well over 400% of the Federal Poverty Level. Therefore, we will not qualify for a subsidy. My family has a $10,000 deductible HSA individual health plan that was purchased in 2012. Will I be able to keep my policy as is, for as many years into the future as I want to, like President Obama promised?

Answer: You know what they say about campaign promises, “I said what?”. As it worked out you can keep your present coverage until the 2014 anniversary date of the policy, sometimes referred to as the renewal date. Then you will have to purchase a health insurance that conforms to ACA requirements.

Living Abroad Exemption

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Question: I am a US citizen but live most of the year abroad. I have an international insurance plan. Will I have to enroll in an exchange plan even though I live abroad most of the year? If not,when I return permanently at some point will that be a qualifying event to obtain a Covered CA plan?

Answer: Californians living abroad are exempt from the mandate to purchase health insurance. When you return permanently that will qualify you for a special enrollment (outside the open enrollment period).

SHOP Delayed?

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Question: I read where the Small Business exchange was going to be delayed for a year. Is it true?

Answer: Not true in California. The HBEX board promises a fully functional SHOP exchange will be delivered on schedule. In the 33 states where the Federal government will facilitate the exchanges the employee choice model will not be available until 2015. In these states, the employer will have a choice of carriers as they do now, and the employee will choose a plan form the one carrier selected.This really removes the key selling point for the SHOP exchange, the ability for each employee to select the plan of the choice from one of many insurance carriers.

Service Center Jobs

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Question: How can I apply for a Service Center job?

Answer: Covered California posts job openings on the Exchange website at http://www.healthexchange.ca.gov/Jobs/. There are no job postings for the Service Centers posted yet and they won’t say when. We’ll announce when it happens. Keep in mind that there will be three service center locations. The main center will be in Rancho Cordova (500 jobs), the other 2 will be in Contra Costa (300 jobs), and Fresno (200 jobs). These are on-site jobs, so you have to live near one of these locations.

Use Subsidy for Bronze Plan?

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Question: Can an insurance exchange subsidy be used for a bronze plan instead of a silver plan?

Answer: Yes. You can apply your subsidy (tax credit) to a Bronze Level Plan and reduce your premium contribution even more. Let’s take the example of a single 45 year old making $22,000 per year. Your tax credit would be $421 per month. This is a fixed amount as a percentage of your income. By using it to pay towards a Bronze Level Premium, you could possible end up with no contribution at all. But remember, the average person will have 10% more in out-of-pocket expenses that you would have had with the Silver Level Plan.

Question: I hear whispers that an individual who is insured now may not have to enroll in a plan with Essential Health Benefits during the open enrollment period - but instead can wait until the expiration date of their current plan. Can you clarify this?

Answer: That’s accurate in some cases. If you are covered by a plan that does not have grandfathered status, you may stay on the plan until the annual renewal date. You would then qualify for a special enrollment in a qualified health plan. If you are covered by a grandfathered plan, you may stay on that plan as long as it maintains its grandfathered status. Grandfathered plans have the ability to avoid several mandates and essential health benefits thus avoiding the increases in healthcare costs associated with those mandates.

Question: If only the husband needs coverage in a household of two. Wife has medicare. How is premium and credits calculated. Is the price on online tool give for both people in household?

Answer: I’ll use an example to illustrate how the subsidy is calculated. For example, assume that your family income (2 people) is $37,000 annually). The Covered California Calculator shows your premium at $236 per month. This is the amount you would pay, even though your spouse does not need coverage in the exchange. The federal (tax credit) subsidy would pay the rest of the total premium.

Tax Penalty?

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Question: If my income increase and I no longer qualify for the tax credit and do not notify Covered CA will I be required to pay a penalty?

Answer: The premium subsidy is actually and advance tax credit. If you were advanced more tax credit than you were entitled, then it will be reclaimed on your federal tax return for that year. It’s more of a reconciliation than a penalty.

Question: If i lose my job outside of open enrollment, is that a qualifying event allowing me access to coverage? And more importantly, since i will then have zero income does that mean i dont qualify for a subsidy and must be placed in Medi-cal?

Answer: Loss of employment would qualify you for a special enrollment at any time outside of the annual open enrollment period if your health care coverage was employer sponsored. You could then be eligible for Medi-Cal during your period of unemployment. If your income increased for any reason it would be your responsibility to self-report this to the Exchange for reevaluation of your status.

What Will I Have to Pay?

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Question: How do i find out how much my insurance premium will be with get covered.ca?

Answer: The final premiums will not be known for a couple months. However if your income makes you eligible for a subsidy, your premium can be calculated now regardless of the final premiums. That’s because your portion of the premium is a fixed percentage of your income. For example, a single person whose modified adjusted income (MAGI) is $20,000 per year would pay no more than 6.3%of their income annually, that is $1,260 annually or $105 monthly. The rest of the premium will be made up by an advanced tax credit (subsidy).

Enrolling After Open Enrollment

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Question: If an individual applies for coverage after the open enrollment period (Jan. 1 to Mar. 31st) and does not have a qualifying event, would that application be subject to medical underwriting? Or would that individual have to wait to apply in the next open enrollment period?

Answer: As a general rule, those individuals who miss the initial or any subsequent annual open enrollment period must wait for the next open enrollment period to enroll. Under no circumstances will medical underwriting be used after January, 2014.

Covered Caifornia Dental

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Question: Will covered california include dental?

Answer: The Covered California Standard Plans include Pediatric Dental (to age 19) benefits at no extra charge including: Preventive and Diagnostic, Dental Basic Services, Dental Restorative and Orthodontia Services. The details of the coverage is yet to be decided. There will also be supplemental dental coverage offered through the Exchange. Supplemental Dental Benefit - Ind.pdf

Question: I read an article that said rates of individual insurance would go up as much as 60%. Won’t that erase the savings from subsidies?

Answer: A new study released on Tuesday by the nonpartisan Society of Actuaries estimates that individual premiums will rise 32 percent over 2013 rates on average nationwide within three years, 2014 - 2016, partly as a result of higher risk pools (more sick people in then insured population). Changes would vary by state, from an 80 percent hike in Wisconsin to a 14 percent reduction in New York. For anybody eligible for subsidies, their contribution to the total premium is fixed on a range between 2% and 9.5% of income. So, for the subsidized, it doesn’t make any difference what the final rates are. On an individual basis, age and income will determine how much of an increase. The subsidized group are likely to pay about 47% to 84% less in monthly premiums compared to 2013. The un-subsidized young (below 40) and will see the highest premium increases. Some of older un-subsidized group will have lower premiums than today for better coverage. On a positive note for the un-subsidized, coverage will be more comprehensive for all, meaning less out-of-pocket costs thus reducing the impact of higher rates.

Question: The largest insurance carriers, like UHC, Aetna, Humana, are saying that they will only be participating in a few state exchanges, just to see “how things go”. Does California know which companies will definitely be selling plans on our state’s exchange-marketplace?

Answer: No definite answer yet, but the largest California carriers will most probably be in Covered California, including Kaiser, Anthem, and Blue Shield. I’ve heard that United Healthcare will not participate in the California exchange, but that’s hearsay.

Recently Documented Resident

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Question: I got my green card in April 2010. Can I buy healthcare insurance from Covered California? I heard you have to wait 5 years.

Answer: Yes. Lawful immigrants who have lived in the U.S. for less than five years may participate in Covered California and be eligible for subsidies if income-qualified. But you are still required to be a lawful resident for 5 years to qualify for Medi-Cal.

Question: What is the percentage of California (legal) residents who earn between 133% and 400% over the National Poverty Level, and will thereby qualify for premium-subsidies to help them buy health insurance? Hopefully, it’s a very large percentage, because health insurance premiums are scheduled to increase significantly on January 1, 2014.

Answer: As of 2014, about 2.6 million Californians will qualify for federal premium subsidies. That’s a small percentage of the population of California - about 37 million. That’s because most are covered by employer-sponsored plans. It is estimated that approximately 45% of those currently insured by individual health insurance will be eligible for subsidies.

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