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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.


Employee Dependents Opt Out?

By on | 3 Comments

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.

3 Comments

Hi Jean.

Yes!

Your daughter WILL have a mid-year Qualifying Event which will provide her mid-year eligibility for enrollment into a health plan, outside of Open enrollment. She should enroll about and within a month before the date your and her current policy terminates. She will be considered independent, and a household of one with her own Covered California account.

If her new Individual health plan is purchased directly from a health insurance carrier, then the employer’s or the health carrier’s current group plan termination-of-coverage letter will also be needed to establish your daughter’s proof of eligibility for mid-year enrollment. If her health plan enrollment will be through Covered California, such Qualifying Event proof is not currently required.

Also, she will have eligibility to maintain her current group coverage with enrollment into the provided COBRA plan (for just your daughter). Yet often, it is much more cost-effective to instead decline COBRA and enroll in an Individual health plan, and then better yet through Covered California should financial assistance be available.

I’d be glad to assist if you’d like to make contact via my provided link with this posting.

All the best.

We are planning to take early retirement on June 30, 2016 and may or may not use COBRA for a short period of time. Currently our daughter is 24 years old and is covered by my husband’s employer cafeteria health care plan. Our daughter will be 25 years old at the time of our retirement. We can not claim her as a dependent on our taxes. When our employee health insurance ends on June 30, 2016, will she be free to enroll through Covered CA independent of us? If so, will she be able to enroll outside the normal open enrollment period since this will be taking place after that?

Thank you for any clarity you may be able to offer!

Yet Phil, as I understand it, even if the employer does not provide nor allow ‘dependents’ coverage under this employer’s group plan, this employer stipulation does not and cannot exclude children from access to coverage under this employer plan, just the spouse will be unable to enroll.

This means that if an employer does indeed not allow the spouse (dependent) access to employer coverage, the children are always considered eligible for coverage under the employer’s group plan, and therefore will not be eligible for tax credit subsidy assistance through Covered California, because the children indeed have access to health plan coverage, and tax credit assistance is available to those only without access to other health insurance.

The employer, in not covering or offering coverage for ‘dependents,’ may elect to not pay or cover anything for dependent children coverage, yet, in California the children always have access to employer coverage, at minimum, at the employee’s expense.

Again, this dependent children’s access to employer coverage then precludes the kids of eligibility for tax credit subsidy assistance eligibility through Covered California, as tax credit assistance is available only to those without access to other health insurance.

In the scenario of the employer not providing coverage for dependents at all (which again, can be and is only with regard to the spouse) the spouse IS then eligible for tax credit assistance through Covered California, yet this spouse’s eligibility for assistance is based upon the entire household size and total (entire) household income. Yet just one person is enrolling… which often results in minimal to no tax credit assistance for the spouse anyway as the health plan premium costs (for just one person of the greater size household) as a percentage of total household income, is often less than or just at the threshold of eligibility for tax credit subsidy assistance through the State Marketplace, Covered California.

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