Kevin Knauss: Health, History, Travel, Insurance
Posts on the development and implementation of the California health insurance market place, application, account, enrollment, termination.
The new law requires Covered California to automatically enroll individuals who have been terminated from Medi-Cal into the lowest cost Silver plan in the person’s region. The automatic enrollment is meant to prevent a gap from when an individual or family is terminated from Medi-Cal to when they enroll in a new health plan.
Drivers will need to supply proof of health insurance. The health insurance can be a health plan purchased through Covered California or off-exchange directly from the carrier according to Covered California. Important to note is that Medicare, Medi-Cal, employer sponsored group plans, and Minimum Coverage plans (for individuals under 30 years old) are not qualifying health insurance for the purposes of the stipend. Drivers should always consult the app-based network for health plans eligible for the stipend.
The 56-year-old San Mateo County resident purchased health insurance through Covered California in 2020 and 2021. The estimated income was $45,000. In 2020, after the Covered California subsidy, the individual paid $109.98 per month for the Kaiser Silver 70 plan. In 2021, the Kaiser Silver plan jumped to $285.71, a 160 percent increase over the prior year.
In scenario III, the income situation is reversed. The couple estimated a MAGI of $25,000, but ended up with a final MAGI of $55,000. However, they don’t have to repay all of the $4,375 excess federal Premium Tax Credit they received from the federal government because there is a repayment limitation. In their case, they only have to repay $2,700. The higher income puts the couple into the California subsidy income zone and they get to claim a $376 tax credit on their California income tax return.
The starting point for the subsidy calculation is also the end point for reconciling the subsidy on the California 540 income tax return. First, your Modified Adjusted Gross Income (MAGI) is converted into a percentage of the federal poverty level (FPL), which varies by household size. That FPL percentage is then matched to the Applicable Figure. The Applicable Figure is itself a percentage, the percentage of the household’s fair share or consumer responsibility for health insurance. It is a sliding scale with income closer to the FPL being responsible for less of the health insurance premium.
Unfortunately, many of us don’t fully factor in the costs of doing business when we think of our monthly income stream. Consequently, many small self-employed individuals may have applied and received unemployment benefits greater than the actual net taxable income received during normal business operations.
The Applicable Figure is multiplied by the MAGI. The results on Line 8a (45,000 x .0877) is $3,947, rounded up. Under the ACA, the Purmt’s should pay no more than $3,947 or $329 per month for the second lowest cost Silver plan for health insurance. The subsidy advanced by the market place exchange (Covered California, Healthcare.gov) is the difference between the cost of the SLCSP and the family’s consumer responsibility.
There is a situation where Covered California will adjust your income. It happens if you fail to submit the income verification documents. In this case, because you have not verified your stated income, Covered California drops the income to $0 and you then become Medi-Cal eligible. Once you are determined Medi-Cal eligible, ONLY your county Medi-Cal office can adjust your income upwards to make you eligible for a private plan with the subsidies.
The new California Franchise Tax Board (FTB) 3895 is a close mirror image of the federal 1095A. The FTB 3895 statement reports important data regarding your health insurance through Covered California such as the monthly premiums, Second Lowest Cost Silver Plan, and how much Covered California paid to your health insurance company to lower your premiums.
The Shop and Compare Tool calculated the subsidized rates for each Silver 70 health plan for 2021. When compared to 2020, the monthly health insurance premium for the 55-year-old individual increased between 25 and 160 percent. Kaiser, the least expensive Silver plan, had the largest dollar increase of $175 per month. Without the Oscar expansion, the Blue Shield HMO Silver 70 would have been the SLCSP, but the much less expensive Oscar Silver plan came in second, $139 lower after the subsidy.
