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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.


December 2019 Archives


Covered California Deadline Today?

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Question: I saw on TV that today is the deadline for signing up with Covered California. Is that right? I also read that Open enrollment in CA goes to January 31.

Answer: Today is the deadline for enrolling for coverage effective 1/1/2020. The Open Enrollment Period remains open until 1/31/2020 for coverage starting February 1st.


Question: I've read through the archives, but I need clarification regarding a dependent and what to include in the household income in the application. I am 20 and going to school full-time. My mother's group plan is not covered in the county that I am in, but I am working part-time. Would I be able to apply for just myself as a household of 1? or do I need to include them in my application? I am still being claimed as dependent, but will be filing my own taxes.

Answer: Yes. You can enroll as a single-person household based on your own income. You must file a tax return and claim your personal deduction. Your mother can no longer claim you as a dependent starting in 2020. If your projected income is less than $17,000 in 2020, you will be enrolled in Medi-Cal.


Untaxed Social Security Income?

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Question: Are Social Security income benefits included in the income total? I ask because only a portion of my wife's SS is considered taxable.

Answer: Covered California's income calculation includes non-taxable Social Security benefits. However, if your income is less than less than $32,000 for joint income tax filers, you pay no tax on your Social Security benefits.


Did I Make the Sign-up Deadline?

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Question: I started the application on the Saturday the 14th deadline, but couldn't finish it. I tried to upload a form but could't get it done. Did i do everything already on my part for the deadline.

Answer: Covered California extended the Open Enrollment deadline for coverage starting on January 1, 2020 coverage to Friday December 20th, but as long as you start your application by the deadline, you'll have coverage on January 1st even though your application may have some unresolved issues.


Need Form 8962 for Tax return?

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Question: I filed my 2018 federal income tax return late and didn’t realize I needed to include Form 8962. I received subsidies in 2018 and 2019 and will need premium subsidies in order to afford coverage next year. Can I still receive premium subsidies in 2020?

Answer: If you received advance premium tax credits in 2019, they will continue in 2020. The IRS requires a you to submit IRS Form-8962. Click to download 2018 form 8962 here. Keep in mind that later during the year, Covered California will check with the IRS to verify your return was filed.


Son Off Medi-Cal at Age 19?

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Question: My son is turning 19 in January and lose MediCal coverage. He will need to be added to our Covered California coverage? What do we need to do?

Answer: Notify Medi-Cal to terminate your son’s eligibility. This will trigger a qualifying event and your Covered California account will be updated by your county Medi-Cal staff. Once the update to the account has been made then you, your agent, or a Covered California call center representative can complete the plan enrollment within the Covered California account.


Subsidy for Separated Couple?

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Question: We are a separated couple with two different households, is each spouse eligible for a subsidy?

Answer: Your federal income tax filing status is key. If you file as "married filing jointly", you may be eligible for premium assistance depending on your joint income. You and your husband and any dependents would be considered one household even if you live apart. If you file as "married filing separately, neither you or your husband will be eligible for premium assistance.


Estimate S-Corp Income?

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Question: My wife and I draw a salary as employees of the small S-Corp company we own. There are additional business profits that reside in the business bank account and are not drawn as salary or as owner distribution. What do we consider when estimated our yearly income?.

Answer: S corporations and partnerships pass through the reporting of the company's entire profit to the owners. You and your spouse are liable for taxes on the corporation's profit whether or not it was distributed. Those profits are included in your 1040 AGI upon which Covered California eligibility is based.


Overpayment of Subsidy?

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Question: I took out $20,000 from my IRA. It raised my income to $55,000 which normally be around $35,000. This was a one time deal, 2020 income will be closer to $35,000. How do I handle this with Covered California?

Answer: If you don’t plan to make an IRA withdrawal in 2020, I suggest you do not change your stated income in your Covered California account. The IRS will recover some or all of the subsidy overpayment in 2019 on your next tax return.


QuestionMy husband and I are enrolled in Covered California. We claimed my mother in-law as dependent on tax return. Can my mother in-law still apply for Medi-Cal while my wife and i have Covered California?

Answer: Your mother-in-law is not eligible for Medi-Cal unless you remove her as a dependent for federal income tax and change your Covered California account to a two-person household.


Question: My income exceeded my estimate for the year. I’ll have to pay some of the subsidy back. How do they handle that?

Answer: The IRS will recover some of the excess tax credits you received to help pay your health insurance through your tax return. The repayment is added to your taxes due.


Adult Child Dependent Status?

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Question: I was told that my 25 year-old daughter had to be a dependent on my taxes. I thought she could stay under my Covered California plan until she is 26 years old.

Answer: Your adult child can file their own tax return and still be included on your family coverage to age 26. If your family is eligible for premium assistance through Covered California and you wish to include your daughter as part of your household, she must be a dependent on your income tax return. She will still file a tax return, but opt out of her personal exemption.


Question: My husband 1s currently on my insurance at work, but it has gotten too expensive. He makes less than $20,000 a year. Can he apply for covered California on his income alone?

Answer: No. Your spouse is not eligible for premium assistance (subsidy) through Covered California, because he has access to your employer’s health plan. He can apply off exchange for insurance coverage without a subsidy. Compare off-exchange rates with your employer based plan.


Will I Have to Repay the Subsidy?

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Question: If I am on Covered California or even Medi-Cal for part of the year and then I get hired for a full time position with income that exceeds the income limit for Covered California will I need to pay back the benefits I received during the first part of the year or pay a penalty?

Answer: You will have to repay some or all of the premium assistance you drew when you file your tax return for that year. If your income remains within the subsidized range, the amount of the federal tax clawback is limited to a maximum of $2,600. If your income exceeds $49,500 individual $100,500 family), the tax credits you received must be repaid in full. If you are covered by Medi-Cal, no repayment will be required regardless of subsequent income.


How to Report IRA Withdrawal?

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Question: I withdrew $10,000 from my IRA which raised our income to $45,000 which normally be around $35,000. I’m confused on what is Income, if I do not noemally count on that money yearly, nor do I plan to again.

Answer: Since you are collecting monthly premium assistance in the form of tax credits based on an estimated annual income of $35,000, your excess tax credits for actual 2019 income of $45,000 will have to be repaid when you file your taxes for 2019. Since you do not plan to make an IRA withdrawal in 2020, I suggest you do not change your stated income in your Covered California account, because your 2020 income will return to to about $35,000 and you’ll be back on track with a minimum of complications.


Moving to California?

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Question: I am moving to CA this month. (1) When should I apply for health insurance in CA? My family may qualify for Medicaid or other subsidized programs. Would the effective date be the exact date of the move or would I be covered by my Texas plan until I start my CA coverage.

Answer: You must be a California resident to apply, so apply as soon as you have a California address. Apply through Covered California to determine your eligibility for premium assistance or Medi-Cal. Your CA coverage will start on the first of the month following your application.


Not Eligible for Subsidy?

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Question: I no longer get a subsidy. Is covered California just for people who qualify for subsidies? If so, how do higher income people apply?

Answer: If you are not eligible for financial assistance, it would be better to purchase coverage outside of Covered California (referred to as off-exchange). The reason? Silver plan rates for 2019 are higher through Covered California, Bronze, Gold, and Platinum Plans are the same price Click here to shop and apply for off-exchange health insurance coverage


Insuring My Daughter in College?

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Question: My dependent daughter goes to college out of state. How would coverage for her work?

Answer: If she’s covered under your family health insurance policy now, she has out-of-network coverage while out of state. She can get her routine medical expenses when at home, but ideally, she should enroll in the student health insurance coverage offered by her school. That way, she get’s routine care at school for low or no out-of-pocket expense.

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