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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 2015 Archives

Will I have to Repay the Subsidy?

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Question:nMy partner and I are not married, but we live together and we have three children together. In March, I lost my job and with it, our health insurance. Without my income, we qualified for premium assistance subsidies because we had a low estimated annual income. I just took and job (August). I immediately reported our income change to my Covered CA agent. My fear is that at the end of the year our annual income will put us over the limit for qualifying for subsidies and we will be penalized for the five months that we received them. Is that how the system works?

Answer: If your 2015 adjusted gross income exceeds the premium assistance threshold of 400% of the federal poverty level (FPL) ($114,000 for a family of 5), you would end up repaying the IRS for all the subsidy you received for the year. Assuming your income was less than that, you will still repay a portion of what you were have been overpaid. Here’s the repayment schedule:

  • Less than 200% FPL ($57k in your case), the amount of the repayment is limited to one-half of $600
  • At least 200% but less than 300% ($85k in your case), the amount of the repayment is limited to one-half of $1,500
  • At least 300% but less than 400% (114K in your case), the amount of the repayment is limited to one-half of $2,500

You did the right thing by reporting your income change to Covered California as soon as possible to limit the overpayment amount.

Add Recently Immigrated Spouse?

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Question: My wife just immigrated. Since immigration is a circumstance that allows enrollment outside the normal enrollment period, can I add her to my existing plan?

Answer: Yes, if your spouse is "lawfully present" in the eyes of Covered California you can add her to your Covered California coverage. Lawfully present immigrants include:

  • U.S. citizens and U.S. nationals.
  • Lawful permanent residents or ("green card holders").
  • Lawful temporary residents.
  • Persons fleeing persecution, including refugees and asylees.
  • Other humanitarian immigrants, including those granted temporary protected status.
  • Non-immigrant Status holders (including worker visas and student visas).

Individuals who are not lawfully present are exempt from the requirement to have health insurance. They must apply for an exemption directly with the Internal Revenue Service (IRS) on their federal income tax return.

Question: If you withdraw $10,000 from an IRA, is that added to income amount to be calculated for Covered California.

Answer: Yes. Withdrawals from traditional IRAs (not Roth), 401Ks, and company pensions are taxed as income and will add to your Adjusted Gross Income (AGI on line 37 of 1040 tax return) which is the number on which Covered California bases its premium assistance calculations.

Question: We lost our employer coverage June 1 but were out of the country from early May until mid August. Are we just out of luck as far as buying insurance through Covered California until the next open enrollment?

Answer: You are entitled to a special enrollment period of up to 60 days following the termination date of your employer-based coverage. Your SEP expired on August 1st. Your should be able to get covered however. I suggest you contact a Covered California certified agent. The agent will help you request an enrollment "exception" due to the fact that you were out of the country during your SEP.

Question: Recently, I discovered that I make a few thousand dollars over the Medi-Cal limit for 2014. I'm just now doing my taxes. What should I do? My average is/was $23,000.

Answer: Though it's not clear from your question, I'm going to assume that you are currently receiving Medi-Cal benefits and your income no longer makes you eligible. All you have to do is notify Medi-Cal of your current income. Medi-Cal will drop you from their roles and when that happens you will be eligible for Covered California with premium assistance. You will not be penalized nor have to pay any additional taxes for 2014.

Question: I will need to buy health insurance due to job loss. I am going to be completely self-employed. I understand there is a regular Bronze plan and a HSA Bronze plan. Which is better for a healthy couple who expect little medical care? Please consider that self-employed deduct medical insurance paid on their income taxes.

Answer: ​Yes. I recommend the HSA compatible Bronze plan for healthy self-employed people because you can take advantage of the added tax benefits. Your premium payments are tax deductible to the business and any money you contribute to your HSA account is also pre-tax - up to $6,750 per year for a couple. You can use your HSA savings to pay for out of pocket medical expenses - copays and deductible - with pre-tax dollars.

Question: I have heard of the limit to tier 4 drugs. Can you elaborate on this as well any other changes like deductibles, co pays, coverage e passion etc?

Answer: In 2016, all metal-tier plans will now have a maximum monthly out-of-pocket cost on specialty drugs (once the pharmacy deductible is met). For the Bronze Plans there is a $500 monthly maximum and for Silver, Gold, and Platinum the monthly out-of-pocket maximum is $250 after the pharmacy deductible is met. The other significant change in benefits for 2016 affects the Bronze Plan. The first cumulative three visits will not be subject to a deductible and can include a specialist visit in addition to primary care, mental health and urgent care visits. In addition, laboratory work is not subject to the deductible.

Question: My 82 year old mother is a recent immigrant, no job/income here. Covered CA Cost calculator asks for household income. If she put in 0 income, she's not eligible to CoveredCA but is referred to Medi-Cal, which we know she's not eligible for (5-year rule deeming because of the Affidavit of Support). Is she supposed to put in my income because I sponsored her legal permanent residence?

Answer: Yes. Your mother can apply for Covered California as part of your household. Your household income will determine if your mother is eligible for premium assistance. Because your mom has no income and she lives in your home, she is a dependent for tax purposes.

Question: My daughter got Medi-Cal, as she was unemployed last year. She found a new, though, low paying, job about 6 months ago, but forgot to report the income change. Will this effect her ability to get Covered Ca in a timely fashion? She needs about 6 different prescriptions, and can't afford to be without her medicines. She also can't afford to buy insurance with any help. What should she do?

Answer: If your daughter is making less than $1,350 per month, she is still eligible for Medi-Cal and doesn't need to make any changes. If she is making somewhat more, but not a lot more, she can wait for open enrollment to make her income change and next year she will be on Covered California with premium assistance. There will be no financial penalty for underestimating her income in 2015.

Question: I put in incorrect information on my application which affects my eligibility for Medi-Cal. How and where can I change this? I don't see that option on the Covered California website.

Answer: To amend a Covered California application, login to your online Covered California account. From your home page select "Report a Change. This illustration (Report Change.pdf) will help. Then select the section you want to change, for example "Household" or "Income" and update.

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