Many Covered California families are reporting that the primary applicant for their 2020 health plans have been changed. Instead of the Covered California primary applicant also being the primary applicant on the health plan, it has been changed to their spouse. The implications of this change can range from minor irritation to severe problems depending on how the health plan handles the change.
I have received several calls from clients reporting that health plan information for 2020 was now addressed to their spouse. This change occurred from the automatic renewal of the Covered California enrollment. In past years, the primary applicant on the Covered California application transferred to being the primary applicant or account holder for the health plan they had enrolled in. All of sudden there has been a change and the health plans had no explanation and neither did Covered California.
Covered California Primary Applicant No Longer Health Plan Primary Applicant
As word spread of the changes, Covered California has acknowledged, at least from the agent service representatives I’ve talk to, that their system seems to be identifying that the primary tax filer, identified on the Covered California application, should be the primary applicant on the health plan. The women who called me were appropriately irked that the change to their husbands being the primary applicant conveyed a perception that they were not qualified to be the primary account holder for the management of their health insurance plans.
Within the Covered California application, you designate a primary applicant for the account. This is usually the person who is responsible for completing the application and reporting any changes such as a change of income. When I call Covered California on behalf of a client, they want to verify who the primary applicant is along with that person’s date of birth for security purposes. Covered California sends notices to the primary applicant of the account regarding requests for documentation or changes to eligibility.
Primary Tax Filer Becomes the Primary Account Holder
A primary tax filer must be identified within the Covered California application. For couples who file their federal taxes Married Filing Jointly, the primary tax filers social security number is at the top of the tax return. Covered California cross references with the IRS to make sure that the Covered California account that is receiving a premium tax credit subsidy has filed their taxes, which is a condition to receive the premium tax credit.
Consequently, it is important that the correct primary tax filer, with the corresponding social security number, is identified within the Covered California application. If Covered California cannot verify that the family has filed their federal income tax return, they have to terminate the monthly premium tax credit subsidy to lower the health insurance cost for the family.
The primary Covered California applicant can also be the primary tax filer. In which case, there would be no change to the primary applicant or account holder of the health plan. However, if the primary tax filer is different from the Covered California primary applicant, this is where some families have seen their 2020 health plans being switched.
Another issue, as yet unreported, is if a married couple each have separate health plans. For example, one spouse has a Bronze Blue Shield plan and the other spouse has a Kaiser Silver plan. If the change to the primary applicant holds true, in the separate health plan enrollment scenario, then both plans will have the primary tax filer as the account holder.
Switch Of Primary Applicant Problems
Aside from general confusion and irritation, there can be other unintended consequences from the change to the primary account holder on the health plan.
- Some carriers, upon receiving the information from Covered California of a new primary applicant, have created new enrollments. The new enrollment has a new member identification number. If the plan is an HMO, the PCP must be re-selected for the family.
- A new enrollment and member ID can create confusion at the doctor’s office and may have downstream challenges for prescription medications. While the challenges will eventually be worked out, the member ID change can create unnecessary delays and headaches for families.
- If the health plan views the automatic renewal as a new enrollment, the member’s old payment information may not transfer to the new health plan because the member and billing IDs don’t match.
- There is no grace period for the first month’s binder payment of a new enrollment. If a consumer has set up automatic electronic bill pay, and that payment is not properly applied to the new enrollment, the health plan could terminate the enrollment in early January 2020.
- Consumers may have to set up new health plan accounts if they have been enrolled with a new member ID number, because there is a new primary applicant. This means a loss of continuity of health care claims information.
- In some instances, the health plan may fail to recognize the Covered California primary applicant, who is no longer the health plan primary applicant/account holder, as the responsible party they can release information to.
There seems to be no easy fix to the switch. You don’t want to change the primary tax filer to the primary applicant because that risks Covered California not being able to verify that a tax return has been filed and then turning off the premium tax credit subsidies.
If you have received correspondence from your health plan that is now addressed to your spouse, you need to carefully look at the letter and any following invoices.
DO NOT ASSUME that your PAYMENT will be automatically applied to the new health plan account if the member ID and billing numbers are different from your 2019 health plan.
If there is a compelling rational for changing the health plan’s primary account holder to the primary tax filer on the Covered California application, I’m not aware of it. The Premium Tax Credit subsidies through Covered California are rooted in an individual’s or family’s income tax return. But the primary tax filer is not always the primary administrator and manager of a family’s health insurance and health care services.
If there is a solid reason as to why the primary tax filer needs to be the primary health plan account holder, Covered California should have communicated that to their enrolled members and the agent community who serves these families.
Covered California Alert
Covered California issued the following update to agents on December 23, 2019.
A recent system change automatically updated the Primary Subscriber to the Primary Tax Filer for a small percentage of cases. Our records indicate that some of your consumers enrolled with Covered California may have been impacted by this change. As a result, they could experience some of the one-time only changes listed below. Although the system change does not affect a consumer’s determination of eligibility for financial help, some changes may interrupt their coverage, or change their payment preferences or ability to access care. You will want to assist them to ensure that there is minimal confusion, and more importantly, no interruption in coverage. Please refer to the chart below for a carrier-by-carrier view of recommended actions – some carriers have no follow-up required.
Consumers impacted by this change may receive a letter in the mail notifying them of this change and informing them of their carrier’s recommended actions.
Potential Changes to your Consumer’s Case:
- A new binder payment may be required to effectuate their plan, including for renewing members.
- The January payment may be due earlier than usual payments.
- A new ID card may need to be issued to receive benefits.
You should review your consumer’s case to make sure of the following:
- A binder payment has been made so they can continue receiving any ongoing treatments or prescriptions into 2020 without interruption.
- Their auto-pay setting is active to ensure timely payment for 2020 coverage.
- They have their preferred primary care physician (PCP) assigned.