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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.

June 2016 Archives


Answer: It sounds like you may have accidentally clicked 5 instead of 4 household members at the beginning of app. If that's the case, you should go back to the beginning and fix that. The next place to check is the household relationship page and make sure that the parent/child, husband/wife section is accurate. Are you aware that a Certified Insurance Agent can help you with this at no cost to you. In addition to getting you over the land mines in the application, a knowledgeable agent can be a big help in selecting the right plan and making sure your doctor in in the network for the plan you select. (BTW check your keyboard. Your caps lock key appears to be stuck :)

Question: I read that California now limits what Medi-Cal can recover from beneficiaries estates?

Answer: Like the majority of Californians, I have long opposed California’s right to the seizure of assets, after death, of people who had received health insurance coverage through the state’s Medi-Cal program. While seldom enforced, it was a cloud over California’s 11 million Medi-Cal beneficiaries. Now, California’s $122 billion general fund budget includes money to dramatically limit the practice to recover money only for nursing home care.

Question: I heard the my Blue Shield grandfathered health plan is being cancelled. How will that work?

Answer: Starting this week, Blue Shield will begin sending notices to 2,062 grandfathered plan subscribers to inform them that their current Blue Shield of California health plan will no longer be available after December 31, 2016. The plans affected include Active Start, Vital Shield, and Shield Spectrum Plans. Blue Shield will automatically enroll these subscribers into an ACA-compliant plan on January 1, 2017. It is important that subscribers check to see if their current doctors are in the PPO network for the new plan. Subscribers who find that the new plan is unacceptable can select a different plan during the open enrollment period. Those who fail to do so, will have a Special Enrollment Period that extends from January 1, 2017 to March 31, 2017 to select another ACA compliant plan for 2017.

Question: My husband and I are now legally separated - he does not have insurance but I do under my employer who does not provide for family ins. Does my husband still have to include my salary to get his own insurance now that we are legally separated?

Answer: If you are legally separated under a final decree of legal separation you are considered single by the IRS and California state law. Therefore, your husband can apply for Covered California based on his income alone. You must both file your 2016 tax return as either single or head of household - not married filing jointly.

Question: I did not know that I was signing my husband up for the HSA PPO, I thought I was signing up for a regular Bronze PPO with covered ca. It's June, and I haven't opened a special HSA account at the bank, but he hasn't used his insurance yet either. What am I supposed to be doing?

Answer: It is not required that you open an HSA account just because you have purchased an HSA compatible health plan. But if you want to enjoy savings and tax benefits you should open an account now. Most banks offer HSA accounts. It's no more trouble than opening a checking or savings account. If you can open your account by July 1st, you will accrue 6 months of eligibility for the 2016 tax year. The annual contribution limit for an individual is $3,350 and for a family: $6,750. You can add another $1,000 annually as a "catch-up" benefit if you are over 55 yours old. Again, for 2016 your maximum contribution is one half of the annual limit. You can make contributions monthly or wait until the end of the year. Actually you have until April 15, 2017 to make your 2016 contribution. If you are interested in learning more about HSAs, google "health savings accounts".

What is the Grace Period?

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Question: I thought Obamacare made the grace period 90 days? I have been fighting with Blue Shield after they cancelled my coverage for non-payment. I was well within 90-days. Is that legal?

Answer: The ACA law requires a 90-day grace period for on-exchange members receiving subsidies for their health plan. For off-exchange members not receiving subsidies, the grace period is 30 days. If you are on a 90-day grace period and do not pay 100% of your total premium due, the grace period does not start over. Example: Let's say you owe $600.00 for March and April. In April, you pay one month's premium for the month of March. In this scenario, you are still in the 90-day grace period with 30 days left until you are cancelled. The 90-day grace period will start over once you have paid 100% of the amount due.

Question: I made more money than I estimated, so I will have to pay back some of the subsidy I received. My question is about the cost-sharing benefits I received with my Silver 87 plan. Will they charge me for that too.?

Answer: Covered California enrollees at the lower end of the income spectrum receive cost-sharing reductions (CSR) in addition to premium assistance. CSR benefits include lower deductibles for medical and prescriptions drugs and lower out-of-pocket maximums. Currently the IRS can recover premium assistance overpayments, but not CSR payments. That may be changing. We recently noticed that some Covered California accounts are beginning to show a CSR monthly dollar amount - see CSR Amount Sample.pdf. Once a dollar amount is established, can recoverability be far behind?

Question: When I purchased my health insurance through Covered California I did not apply for financial assistance. However I think I do qualify, how can I find out and how do I apply for past months.

Answer: You can find out if you qualify for premium assistance by using Covered California's Shop and Compare Calculator. If you discover that you are eligible for a subsidy, you may qualify for a Special Enrollment Period which would allow you to apply for assistance right now. You cannot recover assistance for past months when you did not request it. This is not a change you can make online. You will have to call Covered California at 800-300-1506.

Question: Can you discuss how an HRA (not HSA, but HRA) account affects the plans you can select and any financial assistance it may affect.

Answer: A health reimbursement arrangement (HRA) is an agreement between employer and employee to reimburse out-of-pocket medical expenses. The idea being that the employer can save money on insurance costs by purchasing a high-deductible (cheaper) health plan. Then compensate the employees for the loss in benefits by reimbursing their out-of-pocket expenses not covered by the group health plan or expenses subject to the deductible. HRA's are very flexible. They can be all-inclusive to cover any tax-deductible medical, dental, or vision expense or very limited - for example only covering the first $100 in expenses annually. As a IRS approved employee benefit plan, HRA's deliver tax benefits for both employer and employee, that is: the employer's payments are tax deductible and the employee reimbursements are pre-tax benefits.

The IRS requires that the HRA be combined with a fully-funded group health insurance policy. You cannot receive the tax benefits associated with an HRA if you create a stand-alone HRA - one designed to work with individual health insurance coverage. Only HRA plans that are attached to a conforming group plan can be used going forward.

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