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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 2013 Archives


Penalties After January 1?

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Question: When does the clock start on penalties for not having health insurance? Is it January 1 or March 31, 2014?

Answer: Originally, the ACA the minimum essential coverage provision stated that an individual must pay a penalty if he or she does not have coverage for more than three consecutive months in a year. But the feds just published an FAQ concerning the open enrollment period for individuals purchasing qualified health plans. The guidance states that individuals will be able to enroll throughout the entire enrollment period, which lasts through March 31 2014, and not be subject to the individual shared responsibility payment. A person enrolling after March 15th will not be covered until May 1st, well over the three consecutive months rule.


Drop COBRA for Exchange?

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Question: Can I drop my COBRA plan and buy a Covered California plan on Jan 1, 2014? If so, can I get a subsidy if my income qualifies?

Answer: A person on COBRA will not be eligible for coverage in Covered California unless their COBRA premium is “unaffordable”, that is, it fails the 9.5% of income test (read Bad News …. In that case you are eligible for Covered California coverage and also eligible for a federal subsidy if your income qualifies you. A person whose COBRA coverage is “affordable”, can drop their coverage and enroll in an ACA compliant off-exchange plan as of Jan 1, 2014.


What Happens to My HSA Account?

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Question: I currently have a large amount of money in a HSA bank account. If I choose a non-HSA plan, what does this mean for my HSA account and use of the money for medical expenses?

Answer: If you choose a health plan other than a HSA-qualified plan, you can no longer make pre-tax contributions to your existing HSA account. The HSA account itself does not change and you may withdraw money from the account to pay for qualified medical expenses on a tax free basis as well.


Household Includes Grandparents?

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Question: 40 year old and 2 kids live with both parents/grandparents. 40 year old is currently unemployed with no income. Parents do not claim the 40 year old or the kids as dependents as she intends to work again soon. The question is, are there 5 in the household or 3 if the parents/grandparents do not claim the others as dependents? If the answer is 5, are we supposed to obtain income information from the parents/grandparents even though they have nothing to do with the insurance coverage?

Answer: The mom and 2 kids apply as a household of three and use her income alone for eligibility determination. Remember this general rule, “If you file together, you shop together”.


Question: I retired early and my former company offers a group plan for retirees. I cannot aford it so I opt out. Will this keep me from getting a subsidy on-exchange?

Answer: No. Retirees under age 65 who are eligible but not enrolled in employer-sponsored coverage can obtain premium subsidies next year to purchase coverage through the exchange, even though they have access to a employer-sponsored health plan.


Question: If a person that wants to enroll on Coveredca uses a paper application, where can they indicate their plan selection?

Answer: Simon just pointed out that there is a place plan selection on Attachment D of the application. Thanks Simon.


Can't Get Medi-Cal?

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Question: I am 51-years old, a self-employed gardener and in good health. Due to pride and principle, I’ve never had Medi-Cal. According to my attempt to enroll, the Covered California website said I qualified for Medi-Cal. However, I filled out paperwork and the department informed me that I cannot get Medi-Cal, because I have a self-employed IRA. It’s only around $19. I was told to close it out. We can’t live long on that and I will never retired. The department told me that I’d have to liquidate my IRA before I could be eligible for Med-Cal. I will not. That IRA is all my wife, who is disabled and on MediCare, and I have to retire on’ if I ever could. What should I do?

Answer: Obamacare changed the Medi-Cal eligibility rules. Your assets are no longer a factor. Apply through Covered California. They use the same application, whether online or paper as for exchange coverage. Medi-Cal applicants who are going directly to county health services offices are still being put through old application process (apparently with no explanation that things will change on January 1). For verification of my answer see CA Dept of Health Services online FAQ. Many thanks to Freelancer for pointing out this source.


How to Designate Agent Online?

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Question: I heard that client can enroll online and designate a agent. Do you know where I can input agent information on client online application? I go all the way to submit but I don’t see it. Thank you.

Answer: Once your client has created an account at the exchange portal, they can login, click on “Find Help Near You”, select “Find Agents” to designate an agent. Here’s what the online designation looks like:

Agent to be Designated: “Agent Name”

I grant this Agent permission to access, enter, and update information in my online application. I further grant permission to the Agent to submit my completed application, including activating an eSignature on my behalf.

I understand that I may end my partnership with this Agent at any time through my account dashboard or by calling 1-800-300-1506.

I grant permission to the Agent to enter payment information in my online account. I understand that the insurance premium that I am quoted will be charged to my account.

Signature

Applicant Name

Applicant E-Signature

Type your full name here as your electronic signature.

Today’s Date


Question: When applying for coverage, do you claim the number of dependents on your tax return or by the number of family members that need health coverage? We are a family of four, but one dependent son is covered by a university scholarship that offered health insurance.

Answer: For the purposes of determining your eligibility for premium assistance, your household size is considered to be four persons. Your son who is away in college has “minimum essential coverage” through his school, so the three other household members get a larger subsidy based on a four-person household.


Question: Is there a minimum income level I need to meet before I can purchase a Gold plan with tax credit assistance?

Answer: No. Anyone who is eligible for premium assistance in the Exchange may apply the subsidy amount to a Gold plan if they wish.


Where Does Agent Sign App?

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Question: Step 3 on page 15 of the paper application allows the insured to choose an authorized agent. Is that where the certified agent is confirmed OR on page 18 in the Certified Enrollment Counselor/Entity section. Thank you.

Answer: Step 3 on Page 15 of the “Single Streamlined Application” (gotta love that name) is for Authorized Representatives not agents. Agents sign on page 18 where is says “Certified Insurance Agent” not counselor or entity.


Eligibility is Conditional?

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Question: I have completed the process of applying online through Covered CA. My Eligibility Results page says: “Your eligibility is conditional. To receive the Advance Payment of Premium Tax Credit benefit, you must submit the following by January 31, 2014 (1) Proof of Income (1) Proof of Minimum Essential Coverage.” So my question is two fold. About the income verification, what will be required? And secondly, what is the Proof of Minimum Essential coverage about? Thank you for being literally the only resource I have found for this type of Q&A and shared information.

Answer: Covered California already knows that your income in 2012 was significantly lower than your 2014 estimate since they are connected to the IRS data hub. More than likely you will be asked to provide current income documents like pay stubs. The minimum essential coverage requirement is proof that you have ACA-compliant health insurance on January 1, 2014.


Question: Who’s going to buy health insurance when they don’t know if their doctor takes it or not? When will the Covered California post an accurate provider directory?

Answer: Covered California will probably try to get a consolidated provider directory back online as soon as possible, but it will remain somewhat inaccurate. That’s because the exchange gets provider data form the carriers and the health plans participating in the exchange are still negotiating rates with providers and health care systems. The narrowing of networks, compared with employer-based coverage, is causing more tension than usual between carriers and providers during negotiations. In some cases, the negotiating will go on right up to the Jan. 1, 2014 starting date.


Question: How are they going to calculate the income for domestic partners? I understand if people are married, it’s going to be both salaries. But if you are not - like, we are in a domestic partnership - then how are they going to calculate this?

Answer: Usually, if you file taxes together, you shop for insurance together. Since California does not recognize domestic partnerships for opposite-sex partners (unless over the age of 62), each can apply on the exchange as an individual. Whether one or both partners qualifies for a subsidy, depends on his or her income alone.


Question: If a consumer overestimates their income in order to stay out of Medi-Cal and when they file their taxes it is determined they should have had/qualified for Medi-Cal, is the consumer penalized? Or what happens?

Answer: The consumer is liable for repayment of any excess tax credit received in the year. In your scenario, that would be the entire annual subsidy. However the amount of the”clawback” provision is limited by the household income according to the ACA law. If the household income (expressed as a percent of poverty line) is :

  • Less than 200%, the amount of the clawback is limited to one-half of $600
  • At least 200% but less than 300%, the amount of the clawback is limited to one-half of $1,500
  • At least 300% but less than 400%, the amount of the clawback is limited to one-half of $2,500.

Question: I have completed my enrollment process (on the exchange) and designated an agent and picked a plan/carrier. My question has to do with submitting income verification. The CC website says, “You can use this page to submit electronic copy of the required verification documents in order to insure eligibility… Please submit all required verification documents within 30 days.” This has me worried. Do you think the 30 day stipulation is just boilerplate and does not have to be taken seriously at this time? When I asked a Covered CA person about this, they put me on hold, tracked down a supervisor, and came back and told me that what was required would be spelled out in the Notice of Action correspondence I’d be receiving from Covered CA “sometime in November”. Should I be more proactive than just sit back and wait?

Answer: Sit back and wait a while. You actually have 90 days to meet the income verification requirement in California.


What Did I Just Enroll In?

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Question: I enrolled my husband & myself in the Kaiser HMO Bronze Plan and based on our income we qualify for a subsidy. We currently have a high-deductible HSA compatible plan with Kaiser. Is the Kaiser plan I just enrolled us in an HSA compatible plan? The deductible is very high.

Answer: The Kaiser HMO Bronze Plan has a family deductible of $10,000. It is not an HSA compatible plan. The Kaiser Bronze HSA plans are available in $7,000 and $9,000 family deductibles. The HMO plan cannot be used with a health savings account.


Any Agents Certified Yet?

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Question: Have you heard from any agents who have been certified yet?

Answer: Yes. I just started hearing from agents who are certified. Ron Herzog in Carlsbad is one of those certified. He said, “I never got an email to say I was certified. You have to sign into your Covered California agent account and then click on “My Profile” and then on “Certification Status”. Your certification number is a 10 digit number that starts with a 5 (not to be confused with your agent number that starts with a 2). Then go to the Covered California portal Start Here > Find Help Near You > Find an Agent and search your zip code or name. You should be there if your certified.


Question: As far as I know in order to buy a plan from the exchange one needs to be either a citizen or a permanent resident. Does this condition still apply to the mirrored plans outside the exchange? Can anyone regardless of citizenship status still buy the mirrored plans outside of the exchange if not a citizen or permanent resident but are lawfully in the USA (visa workers, students..)?

Answer: Yes. The rules regarding immigration status are the same off-exchange. However, the range of eligible immigration statusess is much broader than you think. The Covered California paper application contains a long list of eligible immigration statuses (Attachment E, Page 26). Here are some of the more common types.

  • Lawful Permanent Resident or Green Card Holder
  • Lawful Temporary Resident (LTR)
  • Non-immigrant status including worker visas and student visas.

Can I Keep My Plan into 2014?

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Question: Do people with existing “non-grandfathered” plans have to enroll in an ACA plan by March 31st or can they get a Special Enrollment when their plans renew after March 31st? Also can people with “grandfathered” plans get Special Enrollment if they want to enroll after March 31st?

Answer: All Carriers in the individual Exchange, chiefly Kaiser, Anthem, Blue Shield, Health Net - will end non-grandfathered coverage December 31, 2013 and migrate those members to ACA compliant plans on January 1, 2014. CIGNA is the only “big” individual health issuer in California not in the exchange, so they do not have to migrate their individual customers until their 2013 coverage expires in 2014. At that time, these policy holders will qualify for a Special Enrollment Period (SEP) if expiration of coverage is outside open enrollment. If people on grandfathered plans don’t voluntarily enroll in an ACA compliant plan before March 31, 2014, they have to wait until the next policy renewal date to to trigger a SEP.


How to Submit Paper Application?

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Question: Since all licensed agents are temporarily certified for October, we are taking paper applications. What is the fax number to submit these applications?

Answer: Licensed agents are NOT temporarily certified for October. Sorry, but I take the lions’s share of the blame for publicizing that fallaciousness. So don’t submit any business to Covered California until they notify you that you are certified and are given a unique identifying number. Fax to 888-329-3700 Mail to: Covered California, P.O. Box 989725, West Sacramento, CA 95798-9725.


Question: Does Covered California require payment with the application?

Answer: Covered California plans to accept premium payment online through a third-party that will be integrated with the CalHEERS system. They have announced that won’t be ready until January. In the meantime, enrollees are directed to carrier-specific URLs at the completion of the enrollment process. That allows the enrollee to make a payment online and provides instructions on how to make a payment offline. Carriers will send an invoice within five days of receiving the enrollment confirmation from Covered California if payment is not received online. Payment modalities for all carriers include: personal check, cashiers check, money order, credit card, debit card, and EFT/ACH. Some plans even accept cash.


Networks Bigger Off-Exchange?

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Question: I just read today that in-exchange networks are different than off-exchange networks. For example, if I buy a plan from Blue Shield, they offer one network. If I buy the same plan with Blue Shield from Covered California, that network is much smaller. Is this true, and for what insurance companies?

Answer: No. Exchange carriers offer “mirrored” plans off-exchange that exactly match the Exchange plans including networks. Blue Shield offers only mirrored plans off-exchange. Anthem will offer alternative plans in addition to their mirrored plans off-exchange. Alternative plans are allowed by the ACA to foster innovation and and since they are not required to match exchange plans exactly some may offer broader networks.


Question: Filled out an online app that requests financial assistance. “eligibility” section says: “Your application is pending. To receive benefits, you must do the following: proof of California residency and proof of income” OK - how?

Answer: You can submit supporting documents to Covered California by fax, e-mail, or regular mail. They apparently are not ready to collect those documents so you may be on pending status for a while.


Question: I’m currently covered under CalCobra. That will expire at the end of March 2014. I will be eligible for Medicare in July 2014. Can I enroll in the the exchanges for the period Jan-1 thru June 30?

Answer: You can voluntarily quit COBRA or Cal-COBRA at any time. You can sign up for for a new off-exchange plan effective January 1, 2014 and stay on it until you go on medicare on July 1, 2014. To buy your new plan through Covered California, your COBRA coverage would have to be “unaffordable”, that is the former employee-only premium exceeds 9.5% of household income.


Question: In Covered CA, do members of a family/household have to choose the same plan or can members choose different plans, whether they receive premium assistance or not?

Answer: Yes. Covered California can enroll “split families” (family members enrolling in different products and plans) with or without tax credits. Currently, the online system does not support split-family processing. These enrollments will need exception processing manually until Jan 1, 2014.


Question: It seems complicated to switch from my private pay option—i.e getting involved with the tax returns, etc. Is there a way for me to avoid that?

Answer: Yes. You can apply for an off-exchange plan which mirrors exchange plans and rates exactly. And because you are not seeking a tax-credit, there are no questions about your income. Also, the application process takes only a fraction of the time as Covered California application.


Question: Using my 2014 income projection, I will qualify for the enhanced silver plan. If the exchange uses my 2012 income, however, I will not qualify for that plan. If I’m not allowed the enhanced plan due to 2012 income, will my extra co-pays be refunded to me when I file my 2014 taxes?

Answer: Your estimated 2014 income is what counts in setting your initial subsidy eligibility. Your 2012 income is a benchmark. If those two numbers are significantly different, you will explain why. As for the cost-sharing reductions for which you may be eligible, there is no repayment nor refund at the end of the year. It is your responsibility to inform the exchange during the year if your income changes.


Question: Concerning Individual Plans purchased through Covered California: if I sign with a carrier for 2014, can I terminate the plan and switch to the same tier with a different carrier, if the new application is processed prior to 3/31/2014 the end of the open enrollment period? Assume there is no life-changing event, such as the loss of a job, death of a spouse or birth of a child. Am I allowed to terminate and switch because I don’t like the network coverage or I don’t like the carrier’s customer service?

Answer: Yes. One can terminate coverage and buy a new plan during the open enrollment for any reason.


Question: If someone has dual citizenship and lives in the United States for 3 months out of the year, are they exempt from the Individual Mandate? If they would like Covered CA insurance for those 3 months, how would that work? I was told that if they have MEC outside the US then they are exempt from the mandate, but as far as applying for coverage with premium assistance, that seems a little confusing. Does filing taxes play a role?

Answer: You are not considered a California resident if you live in the state less than 6 months a year. Therefore you would not be eligible for Covered California coverage with or without a subsidy for the time that you are in the state. An American citizen who lives outside the country is exempt from the individual mandate, however.


Question: I’m disappointed by the providers in the exchange plans’ networks. My question is will there be any companies selling private Individual/Family plans on the open market outside of Covered California for 2014, particularly PPO plans?

Answer: Anthem, Blue Shield, Health Net and Kaiser will all offer off-exchange PPO plans that exactly mirror their Covered California exchange plans so same networks as well. So far, only Anthem has announced that they will have some alternative off-exchange plans. Those plans may offer broader PPO networks, but we haven’t seen them yet. Covered California just announced that it will have an easy-to-use composite (all carrier) provider directory available on Monday, October 7, 2013.


Question: Can a lawfully present visitor get premium assistance when he purchases insurance from the exchange if his income is within the federal poverty level guidelines?

Answer: Yes.


Question: Our student has university insurance through August 2014. At that time his projected income will qualify for him for subsidies. Does he need to apply BEFORE March to get them? Or when should he apply for this? Can’t find this anywhere!

Answer: No. He can wait until his school insurance expires in August or September and apply for exchange coverage then. The loss of his current coverage will qualify him for a special enrollment period to apply for new coverage.


Question: Like many others, I have been trying to find out if my current doctors will be in-network for the exchange plans. I noticed the on the Blue Shield web site, they have finally included what they call “2014 ACA Metal” plans, i.e. Bronze, Silver, etc. in their list of plans to select when searching for providers. Can we assume that this will be the same as for Blue Shield plans bought through Covered California? That is, if I found my doctor on the Blue Shield site as in-network for the 2014 ACA Silver plan, then she would also be in-network for the same plan bought through the exchange?

Answer: Yes. Carriers must mirror exactly their off-exchange plans to those they offer on Covered California right down to the including to identical provider networks.


Question: I understand that if I under-estimate my income, I may have to pay back some portion of the subsidies that I have received. Is there any problem with over-estimating one’s income for the year. I am thinking of a case when your original estimate does not put your 18-under kids onto Medi-Cal, but your actual income would have.

Answer: Yes. There could be significant tax consequences for your household. When you pay your taxes for that year, and your income would have qualified your children for Medi-Cal, the entire amount that you drew in advance tax credits could be due with the filing of your return.

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