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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.

September 2015 Archives

Are All Bronze Plans HSA Eligible?

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Question: By definition it seems that ALL Bronze plans are considered HDHP. So, I’m confused by the fact that only certain plans offered actually say “HSA.” If I select a plan not specified as HSA but it is actually a high deductible plan, will I still be able to utilize an HSA account?

Answer: No. All Bronze plans are not HSA compatible. Only those labeled as HSA qualified will work with the IRS. If you select a plan not specified as HSA, you will not be able to utilize the tax benefits of an HSA account?

Find Medical Providers in My Area?

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Question: How can I determine which Covered CA health provider plans will accept the particular medical group and doctor that I want? I also have difficulty because of the restrictions on the area in which I live. Will a PPO plan help resolve this issue?

Answer: You will have to do an online search of providers - doctors and hospitals - at the website of each carrier you are considering. I have provided a list of links to some carrier provider directories below. If you are uncomfortable using the internet, you should contact a Certified Agent to help you locate the best plan including your provider preferences. In 2016, all counties in California will offer a choice of at least 3 different Covered California carriers: Blue Shield and Anthem Blue Cross PPO plans (no more EPO) are available in every county statewide. New this year, United Healthcare will offer a third PPO choice in even the most rural counties.

2016 Rate Increase?

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Question: I just received a mailing that states that our Anthem Blue Cross premium is going from $670 to $870 for 2016. We've reported no changes in income or family size (nor made any claims this year). As expected, the plan's deductibles, copays and OOP maximums have all increased. This is not the reasonable expected premium increases I've read about in the Covered CA press releases. We receive a subsidy. Our income for 2015 will be the same as for 2014 year. Is it safe to assume that the subsidy will not increase substantially to cover such a large premium hike? Hence our premium will now be an additional $200 out of pocket monthly?

Answer: If you are eligible for a subsidy, the net amount you pay after subsidy is set as a percentage of your income, so if your income is the same as 2015, your subsidy will increase to cover most if not all of the 2016 health plan rate increase. While the average 2016 rate increase for Covered California coverage statewide is 4%, there are anomalies. For example if you have a Blue Shield PPO plan in Monterey, San Benito or Santa Cruz county your rate could increase as much as 44%. This year both Blue Shield and Anthem Blue Cross offer PPO plans in all California counties, so don't renew your coverage without shopping all other plans in your area.

Question: Before I purchased my Covered California plan with Anthem last year, I carefully checked Anthem’s online provider directory (Covered California does not appear to have one) to confirm that my doctor, my wife’s doctors, and our preferred hospital were all in-network. When we visited our doctors a few months later, both of our doctors told us they do not take Covered California. This cost us significant out of pocket expenses. Is there any I can get reimbursed for their mistake? Is it any better now?

Answer: Today’s provider directories are somewhat better than a year ago, but are still inaccurate. (For a complete picture on why this situation continues 2 years after ACA implementation read: Provider Directory Study 9-2015.pdf. Accurate provider directories won’t happen any time soon. We need the Department of Insurance and the Department of Healthcare Services to “grow a pair” and start aggressively enforcing existing standards with sanctions and fines for the carriers. Covered California should add an SEP trigger to include consumers that can show that they chose a plan based on inaccurate provider directories. That way at least, the consumer could switch plans and minimize the added cost and inconvenience caused by errors or misrepresentations in provider directories.

Employee Dependents Opt Out?

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Question: A new employee wants to negotiate a stipend for not enrolling his family members on our company health insurance plan. He says his covered calif plan for them is cheaper than the cost would be for the company plan (we have kaiser and pay for 50% of dependent coverage). I don't know if we can (as an employer) pay the employee a stipend if he opts out of our coverage for his family.

Answer: Unfortunately for this employee, his dependents are not eligible for premium assistance at Covered California, because they are "offered" employer-based coverage. Should his dependents opt out of the group coverage, they can enroll in Covered California coverage but without a subsidy, making the Covered California cost much higher that 50% of the group coverage cost. To enable your employees to do what was requested here, your group plan would have to stipulate that no dependents will be offered coverage going forward.

File Taxes with Zero Income?

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Question: When I enrolled in Covered California a year ago, I was making about $1400 a month and received premium assistance. I became unemployed in January and did not report the change, but still paid the adjusted premium. Do I still have to file a tax return with almost zero income? Will there be a penalty or tax consequences for this at the end of the year?

Answer: Yes. You must file a tax return even if your income is zero. You agreed to do so as part of your Covered California application. Get a form 1040EZ and you can easily fill it out and submit it yourself. The amount you have to pay back is limited to $300 in your scenario. If you did not file a 2014 Federal Income Tax Return, you are not eligible for a subsidy in 2016.

Bronze HSA Better Than Platinum ?

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Question: My wife and I are self-employed and have a family of 4. We don’t qualify for subsidy in Covered California. Can you help us understand why one shouldn’t always go Bronze with HSA vs. a lower co-pay plan e.g. Platinum? Doesn’t the tax benefit of an HSA and the lower OOP costs of Bronze always mean a lower maximum, after tax health care spend? Under what circumstances does it make sense to purchase the Platinum plan?

Answer: People with chronic health conditions buy the platinum plan. For example, 40% of platinum plan users are diabetic. They know they will have significant medical expenses and they’d rather pay the higher insurance premiums than the out of pocket expenses. The out-of pocket maximum for platinum plans in 2016 is $4,000.

Healthy, more affluent people, see the Bronze HSA compatible plan, as a better option. For these people the $4,500 deductible (2016) is not a deal breaker because they have the money, if necessary. Because they are healthy, their out-of-pocket costs should be very low most years. Then of course, there’s the tax benefits and lower premiums. The out-of pocket maximum for platinum plans in 2016 is $6,500.

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