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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.


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.

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The most important thing to realize about “Private Exchanges” is that a person cannot obtain the advance tax credit to pay for part of the cost of health insurance through a private exchange. To obtain the advance tax credit, a person must enroll in a qualified health plan through the state-based Exchange.

Undoubtedly, there will be people expecting that advance tax credit who will not receive it. Don’t believe anyone who tells you that the government will send you money each month to pay for the insurance they want to sell you — it doesn’t work that way. The advance credit will only be paid directly to the health plan, with the insured paying the balance.

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