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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.

August 2013 Archives

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 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.

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