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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.

Get Subsidy From My Carrier?

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Question: In case a participating carrier cancels an existing plan as it does not comply with ACA and offers different plans that comply with ACA to insured, are those offered plans same or different from the plan offered under Covered California. Is the insured entitled to premium assistance and cost sharing help If the insured buys directly from the carrier?

Answer: Insurance companies who participate in Covered California (Anthem, Blue Shield, Health Net, Kaiser), must offer the identical plans off-exchange though you’ll find they use different plan names off-exchange (just to add a bit more confusion). You can select an on-exchange, Covered California, plan from one of these participating carriers after you have enrolled through Covered California and are eligible of a subsidy and / or cost sharing help.


The way the 400% FPL MAGI cut off is currently structured seems to be unsustainable in the long term. For example, if some official 1099 comes in Feb or March stating that you made a few dollars, say less than $100, more than what you’d estimated you could be out $5K, $6K or even more in subsidies. This would be after tax amounts - so the adverse impact of earning less than $100 in additional income could be as much as giving up $10,000 of your pre-tax income. To repeat my concerns, this seems utterly unsustainable. Just as cancellations became an issue only after the insurance company letters went out, this will really come to the surface only in March & April of 2015. Do you know of any attempts/efforts to fix this before this really blows up?

I think you are confusing the idea of “helping to enroll” with direct enrollment.

There are many ways that a private health insurer can help a customer enroll on the exchange for a policy purchased from that company — and it is in each company’s financial interest to offer all the “help” they can, lest the customer visit the exchange on their own and choose some other company’s policy.

So they can give the same help that a navigator can give; if the company is represented by licensed insurance agents, then those agents can also act on behalf of the customer to complete all necessary steps to enroll on the exchange. But the enrollment still needs to be handled through the exchange. (In theory one would hope that the agents have a access to a separate computer interface that streamlines the process, but in practice I’m not sure that if that is working.)

Apparently there is some wiggle room in how the law is interpreted. In this case, the Obama administration confirmed today that carriers will be helping to enroll subsidy-eligible applicants.

Phil, as with my other posts, all I can do is read the law and assume that it will be followed.

The law that governs the tax credits specifies that the individual MUST be enrolled via an exchange:

“enrolled in through an Exchange established by the State under 1311 of the Patient Protection and Affordable Care Act

@ 26 USC 36B(b)(2)(a) http://www.law.cornell.edu/uscode/text/26/36B

The applicable federal regulation echoes that language, defining “applicable taxpayer” as being “enrolled in one or more qualified health plans through an Exchange”

@ 26 CFR 1.36B-2(a) http://www.law.cornell.edu/cfr/text/26/1.36B-2

So I don’t think this is a California-only thing — I think that the taxpayer MUST be signed up via an “exchange” in order to qualify for a tax credit.

(I’m not saying that this makes a whole lot of sense- it doesn’t — but that’s the way the law is written.)

You are right and I corrected the answer. I initially though that a carrier could submit their own plans to CC for subsidy eligibility and then finish the plan selection process at their own site. While this is the way it works (using the term loosely :-) in the federal exchange, not so in CA.

“You can buy an on-exchange, Covered California, plan from one of these participating carriers directly through the carrier and get subsidy and / or cost sharing help.”

Can you confirm this is true? I was told that one must enroll through Covered CA in order to qualify for subsidy and CSR.

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