Kevin Knauss: Health, History, Travel, Insurance
Covered California has worked with the health plans to transfer any accumulation of member health care expenses from the off-exchange plan to a new on-exchange plan through Covered California. For example, if you have spent $1,000 toward meeting your deductible under your current plan, that $1,000 accumulation would be transferred to the new plan. Many health plans have announced they will participate in the transfer.
The income ranges in the revised table did not change because they were based on the already released 2021 federal poverty levels for income. What has changed is that the California Premium Assistance Subsidy is no longer listed. This is because the new federal Premium Tax Credit subsidies are larger than anything California was offering. Also note that the Federal Premium Tax Credit extends beyond 600 percent of the federal poverty level.
The household contribution percentages progressively increase until they reach 8.5 percent when the Modified Adjusted Gross Income is at 400 percent of the FPL. There is no cap on the household income in order to receive the federal Premium Tax Credit subsidy. As long as the Second Lowest Cost Silver Plan exceeds 8.5 percent of the household income, there will be a subsidy to lower the cost.
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.
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 confusion lies in the statement that the consumer is not eligible for the California Premium Subsidy. The California Premium Subsidy program is completely separate from the federal Premium Tax Credit subsidy. You can be eligible for the federal subsidy but not the State subsidy. If your income is over 400 percent of the federal poverty level, you are not eligible for the federal Premium Tax Credit subsidy, but you may be eligible for the State subsidy.
I will note that when selecting the UCLA Medical Group from the drop-down list on the L. A. Care website, it will specify that limited enrollment is available. I don’t know if that means only the participating primary care physicians will accept a limited number of L. A. Care members or if the entire UCLA Medical Group is limited.
The only way you can ever receive the Premium Tax Credit subsidy to lower your health insurance premium, either on a monthly basis or when you file your federal or state tax return, is to enroll in a health plan through Covered California. The subsidy can be a form of income protection. In the event that the household has a sudden drop of income in the middle of the year, the Covered California application can be updated with the lower income amount and trigger the subsidy to lower the health insurance premium.
Upon renewing Covered California coverage or applying for new health insurance, new questions will pop up if your income is listed as alimony. Specifically, Covered California wants to know the date of the divorce or modification of the decree. This is all to determine if the specified alimony payments can be considered as income for the Covered California premium tax credit subsidies.
