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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.

March 2015 Archives

Sign-up an Unborn Infant?

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Question: My independent 24 yr old daughter has Anthem insurance coverage through her father's workplace (Univ. of So Cal). My daughter is low income and it was our plan to enroll the infant in Medi-Cal through CC. We were under the impression that the infant would be covered by my daughter's plan for the first 30 days. Marin General, the hospital where her doctor delivers, has contacted her to let her know that because she is not the policy holder, the infant has no coverage at birth. They let her know that the infant will incur charges from the minute she is delivered and advised her to get coverage. We can't figure out how to sign up just the baby before birth without a social security number.

Answer: You can't get Medi-Cal coverage for the newborn infant until after the child is born, but the baby's coverage will take effect retroactively to the date of birth. That means Medi-Cal will cover all of the newborn's expenses. Once the baby is born, the mother must apply on behalf of the baby using the Covered California online application even though you know the baby will be eligible for Medi-Cal.

Married Filing Separatey?

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Question: I filed married filing jointly in 2013. My husband moved out after Christmas 2013, & we have been separated. I qualified for assistance using our joint return 2013 for CoveredCA assistance for 2014. We filed married filing separately for 2014. I was accepted for coverage for 2014, but what will happen now? Will I still be covered? My income for 2015 will be less, as it was in 2014, but I am being given a penalty due to filing separately for 2014.

Answer: Had you listed your tax filing status as "married filing separately​" on your Covered California application, you would not have been eligible for a subsidy. So it seems to me that you have disqualified yourself from the advance premium tax credits you received in 2014. If so, you are still covered and your premium assistance will continue until you notify CC of your tax status change. In order to continue getting premium assistance (assuming you still qualify based on income) you will have to change your tax status to single or married filing jointly.

Question: If you have already been getting the credit, is the 4/15 2014 tax filing deadline firm that covered ca makes you agree to, or is an extension allowed until 10/15/15? what is the final consensus? thanks

Answer: You must pay your 2014 taxes by 4/15/15 along with your application for an extension. In other words, even though you are filing for an extension, you still have to pay your taxes on April 15th.

APTC over 65?

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Question: Can a person over 65 receive APTC?

Answer: Usually not, because most Californians over age 65 are covered by Medicare wich is considered Minimum Essential Coverage (MEC). Applicants who are eligible for MEC are not eligible for financial assistance unless they fall in this exception: If an applicant is eligible for Medicare part A coverage requiring payment of premiums, but is NOT enrolled in the program at the same time he or she enrolls in a Covered California plan (i.e., no dual coverage) will be eligible for financial assistance.

Address Change?

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Question: If I changed my address with Blue Shield and at my doctor’s office, will that the change also be updated at Covered California?

Answer: No. You must change your address in Covered California account. If you don’t, you may not receive correspondence from Covered California - IRS Form 1095-A, important notices, renewal information, etc.

Paying Back The Subsidy?

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Question: I enrolled in Covered CA and opted to take all of the subsidy now rather than at tax filing time. Starting April, I will have a new job that provides insurance. When I file taxes next year, my income will be too high to receive a subsidy. Will I have to make up the difference for the full premium for the 3 months of Covered CA insurance?

Answer: Yes, you will pay, but not that way. The subsidy paid to you in 2015 will be taxed as income based on the scenario you described.

Question: If I enrolled in Covered California and received a premium subsidy, but recently got a new job with an employer whose coverage meets the requirements for affordable care, can I keep my Covered California insurance?

Answer: No. You are no longer eligible for Covered California coverage because you have been offered employer-based coverage. You need to notify Covered California to cancel your coverage to coincide with the start of your group coverage.

IRA Distributions as Income?

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Question: I am going off my work insurance at the end of the month and am on Cal SDI from an injury as my only current income. Should I withdraw at least $16100 from my IRA to qualify for Covered California? I do not qualify for Medical. I anticipate my AGI to be about $20,000 this year, including IRA withdrawals. Is it OK to withdraw it as a lump sum and is it OK to convert to ROTH?

Answer: Yes. If you withdraw money from your IRA it as taxed as income. That income will be included in your AGI. At $20k, for a one-person household, you will be eligible for Silver 87 coverage and cost-sharing reductions. Using some of that IRA income to fund a Roth IRA would be very smart if you don't need the money otherwise.

Question: I own a company with 9 employees. They buy their own coverage through Obamacare. I started an HRA (Health Reimbursement Arrangement) four years ago to reimburse them for their out of pocket expenses, including their net premiums. Now i’m hearing that you can’t do that anymore. What’s the truth?

Answer: What you are describing is referred to a standalone HRA - designed to work with individual insurance coverage. The IRS says, a standalone HRA cannot be used to reimburse employee premiums. The most recent guidance from the IRS - IRS Notice 2015-17.pdf provides additional clarity, but it provides no wiggle room for to those software vendors or third party administrators (think Zane Benefits) who continue to imagine ways to get around the standalone HRA rules. Employers with standalone HRAs have been giver until June 30, 2015 to get rid of them. Only HRA plans that are attached to a conforming group plan can be used going forward. Agents and brokers need to be very careful that they aren’t the ones left accountable for bad advice.

Question: Does an employer document that spouses are excluded, may not enroll in group health plan, through the ERISA documents?

Answer: The group health insurance agreement between the employer and the insurance company providing the coverage typically does not give the employer the option NOT to offer to insure spouses and dependent children or to put it another way - to offer "employee only" coverage. In California, the only 2 exceptions currently are SHOP and Kaiser Permanente.

Question: My husband has employer group benefits offered to employee and family. However, his open enrollment period was Jan and we missed the cutoff to enroll family. Am I and my children eligible for tax credits?

Answer: No. You were offered group health insurance by your employer, making you ineligible for tax credits. Whether you deliberately opted-out or forgot to enroll in your group plan does not matter.

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