Covered California released the 2019 Sign-Up and Renewal Journey Frequently Asked Questions to assist consumer and agents with the renewal and new enrollment process. Below are some of the questions answered in the Covered California document. Covered California answers are in italics.
Passive vs. Active Renewals
Each fall, Covered California sends renewal notices to currently enrolled consumers, inviting them to update their account information, if necessary, and actively choose a new health plan for the upcoming plan year. This is active renewal. If consumers take no action, Covered California automatically renews their current coverage to continue in the following plan year. This is passive renewal.
If a current Covered California consumer takes no action by December 15th, they will be automatically renewed into their existing health plan with subsidies based on the latest reported income and rates for that plan.
If a consumer does not like their plan or rate, they must make changes to their account and actively renew their coverage by December 15th for a plan effective date of January 1, 2019. Changes to the account and plan selection between December 16th and January 15th will have an effective date of February 1, 2019.
If a consumer was terminated for non-payment, when they reinstate do they have to pay back premiums for months of non-payment?
Carriers do not usually reinstate a consumer after termination of coverage due to non-payment. In the rare case that they do, the start date and repayment depend on the specific circumstances of each case.
Federal regulations permit the health plans to bill for some months of past coverage if the plan was terminated for nonpayment during the previous year. We have seen this done in California. If you enroll in a health plan with the same carrier that was terminated for nonpayment in 2018, it’s possible they may bill for past due amounts. This may show up on the first month’s binder payment for 2019.
Are binder payments required when consumers stay with the same carrier, but switch metal levels like Silver to Bronze? What about Silver 87 to Silver 94?
The first payment for a plan renewal in the same plan (including different CSR variations of the plan) or in the same product (HMO, PPO, EPO, etc.) with the same carrier is not considered a binder payment as related to grace period. It is the binder payment for the prior policy that grants rights to a grace period with the same plan or product under the same carrier, even in a new plan under the same product or another CSR level of the same plan. But if the consumer switches to a different product (e.g., from a Silver HMO to Bronze PPO), they don’t qualify for a grace period and will have to make a binder payment.
The binder payment is the initial premium the consumer must make when enrolling in a new health plan. There is no grace period. If the binder payment is not paid before the plan starts, then the plan will not become effective and the consumer will have no coverage. Some plans will take the binder payment up to 5 days after the first of the month, but check with your health plan’s terms and conditions. Once the plan is effective, the consumer has until the end of the month, usually 30 days, to make that month’s premium payment. The plan is generally terminated on the 1st of the next month following no premium payment.
A Covered California consumer can get their health insurance plan reinstated up to 90 days after the nonpayment cancellation if they completely bring their plan current by making all the back premium payments. For off-exchange enrollments, the plan is forever terminated after the 30 day grace period excluding any exceptional circumstances such as a carrier’s error in the billing system.
If an application is submitted without a binder payment will it be processed? Do they have to submit a binder payment via the Covered California online application or can they call their carrier and pay after submitting the application? Will they be billed by the carrier? Does the consumer have the option to pay later in the year?
Some carriers allow the first or “binder” payment to be made online, after plan selection. If such an option is not available, or if the consumer chooses not to pay at the time of application and enrollment, the carrier will send a bill. The consumer will need to pay by the due date on the bill.
When a consumer clicks on the Pay Now button on their account they are generally taken to a third party handler of the premium payment in another browser window. Make sure you have your pop-up ad blocker turned off in your web browser to allow this function to proceed. Not all carriers have an outside third party payment processing system. Usually within a couple days of enrollment, the carrier should have all of your Covered California enrollment data and you can make a payment over the phone or wait for an invoice in the mail.
If a consumer predicts their income for 2019, does Covered California update their APTC if the 2018 reported taxes are different?
The APTC calculation for a given plan year is always based on the income entered in the application. If income is updated during the course of the year, the APTC already used is taken into account and the remainder available is prorated according to the number of remaining months of the year.
The income section of the Covered California application is very date sensitive. From the above statement, if the income at renewal time and the dates of the income adjustments are in 2018, the new income will affect 2018 monthly subsidy. If you are changing income for 2019, take care to make sure the dates of the income changes are for 2019. Covered California has updated their income section to help make the process of estimating the 2019 income easier.
If a consumer is offered insurance through their employer, but the premium is only affordable for the consumer and not their family, is the family able to receive APTC with Covered California? (APTC: Advance Premium Tax Credit = monthly subsidy)
It depends on whether the employer offers dependent coverage. If the employer offers dependent coverage, even if it’s unaffordable, those dependents do not qualify for APTC. This is called the family glitch. However, if the employer does not offer dependent coverage, the dependents are free to get coverage (and APTC/CSR) through Covered California.
Many small groups who have employees facing this problem are considering going to employee only health plans. This may sound somewhat cruel, but it does allow the dependents and spouse of the employee to go through Covered California for the subsidy. Covered California for Small Business exchange offers employee only health plans.
Will APTC be restored back to January 1 of the plan year when a consumer calls to give consent?
Yes, APTC will be retroactively applied. After updating consent, you will see the APTC amount and net premium. You can advise the consumer to pay the net premium. If the consumer has already paid the gross premium, the difference will be credited to the consumer in the next billing cycle.
This question refers, I assume, to consumers whose consent for verification of information has expired before the renewal. The APTC monthly subsidy cannot be active if the consumer does not give consent. Some people may not realize this until they get an invoice for the full premium amount of the health insurance. At which point, the consumer or agent can renew the consent for verification.
For self-employed consumers, do I report gross income or MAGI?
Eligibility for APTC is based on Modified Adjusted Gross Income (MAGI) for all consumers, including self-employed consumers. MAGI is calculated by taking adjusted gross income (which includes business income or loss reported on Schedule C and the above-the-line standard deductions) and adding back certain items such as foreign-earned income, tax-exempt interests, and non-taxable portion of Social Security benefits (excluding SSI).
The Covered California application is concerned with MAGI rather than taxable income. Please enter income and deduction fields as they display in the application so that MAGI and APTC eligibility can be correctly calculated.
One unknown is how the 2018 tax reform legislation will affect MAGI for self-employed individuals. The IRS has not released all of the guidance and tax forms. Some deductions are going away. There will also be a new 20% income deduction for some self-employed people which will lower their MAGI. Consumers can always adjust their income lower in 2019 after they know how all the tax reforms will impact them.
If a consumer has exceeded the minimum Federal Poverty Level (FPL) for Medi-Cal, but later in the year loses their job and has $0 monthly income, are they eligible for MAGI Medi-CAL moving forward?
Yes, if the consumer reports an income within Medi-Cal income limits (and is otherwise eligible for Medi-Cal), they will transition to Medi-Cal from the month that they met the income eligibility. Unlike APTC/CSR eligibility, which is based on projected annual income, Medi-Cal eligibility is based on the current monthly income, regardless of the consumer’s income for the previous months.
Covered California requires consumers to report changes to income within 30 days. Medi-Cal requires changes to be reported within 10 days.
Does the over age dependent need to submit a new application?
If the person is over age 26 and tax dependent, they should stay on the family application and enroll in their own health plan via the “custom grouping” option in the application. If the person is over age 26 and not tax dependent, they must be on their own application, in their own plan.
If the person over age 26 is a disabled adult child, they can stay on the family application and in the family health plan.
The ACA subsidies are based on the primary applicant’s tax payer household. In other words, if a son or daughter, or other dependent, will not be taken as a dependent on the federal tax return, they generally are not included in the household for Covered California. The APTC tax credit subsidies are reconciled on the tax payer’s return. If a tax payer entered Covered California with a household of 4, but one of their dependents leaves during the year, then they will be filing as a household of 3. This means they may have received too much subsidy during the year. Consequently, it is important to report changes to the household as soon as possible to Covered California.
When do the covered dependents come off the family plan?
Each year, Covered California and carriers coordinate to remove dependents over age 26, who are not disabled adult children, prior to the start of the renewal and enrollment season.
If members update their information before 10/1, will those changes, such as income apply to the current year or 2019 or both?
Those changes will be applied to the current plan year and also used at renewal, which would apply the most current information in the application to the 2019 plan year.
Will there be a penalty for not having coverage in 2019?
No. The Tax Cuts and Jobs Act reduced the shared responsibility payment to $0, effectively eliminating the penalty. Consumers will pay a penalty for not having coverage in 2018, but it will be $0 for not having coverage in 2019.