These are some of the top questions I get asked by people trying to figure out what Covered California is and if they qualify for the health insurance subsidies. These are high level answers. Please contact me if you need more specificity regarding a particular family situation. Also, you might have a great question I can add to this list to help other consumers.
Covered California is a health insurance exchange where individuals and families can purchase health insurance and be determined eligible for federal and state premium tax credit subsidies. Covered California also runs a small employer group exchange where small businesses can offer health insurance to their employees.
Under the Affordable Care Act states could set up their own exchange or market place for health insurance. The California Health Benefit Exchange was established in California shortly after the Affordable Care Act was signed into law by President Obama. With federal funding, the California Health Benefit Exchange created California’s health insurance exchanged called Covered California. The California Health Benefit Exchange is an independent governmental organization with and executive director and board of directors.
Covered California receives no funding from either the federal or state government. They charge the health plans 3.5 percent of the total premium amount for individuals enrolled into their health plans.
The main purpose of Covered California is to determine if individuals and families applying for health insurance are eligible for the Advance Premium Tax Credits (APTC) that help lower the household’s monthly health insurance premium. There are several conditions individuals must meet in order to qualify for APTC such as income amounts, immigration status, availability of minimum essential coverage from an employer.
Covered California also establishes the standard benefit design health plans sold to consumers. These plans must meet certain actuarial levels based on member cost-sharing for such items as deductibles, coinsurance, copayments, and maximum-out-of-pocket amounts. The metal tiers and actuarial levels are Bronze 60%, Silver 70%, Gold 80%, Platinum 90%. The actuarial level percentage is the what the average member will pay for their health care services during the year, excluding premiums.
If the individual or family is determined eligible to receive APTC, Covered California uses a formula created by the Affordable Care Act to calculate an annual premium tax credit the household is eligible for based on income, cost of health insurance, and family size. They then take the estimated annual tax credit, divide it into monthly amounts, and forward it to the health plan the individual or family selects. The household then pays the difference between the full premium and the amount Covered California forwards to the health plan.
No. You will be making premium payments direct to your selected carrier. Covered California has a link within the consumer account to make the first month’s binder payment. But the Pay Now button is only for the first month of the health plan and it goes directly to the health plan.
No. If the individual or family has a Modified Adjusted Gross Income higher than they estimated on the Covered California application, they may have to repay some or all of the APTC subsidy their received. However, no repayments are made to Covered California. The APTC is reconciled when the primary tax payer files their federal and state income tax returns.
Yes. If the household Modified Adjusted Gross Income is lower than the estimate on the Covered California, but above 100 percent of the federal poverty level, the tax payer may be entitled to an additional premium tax credit.
No. You don’t have to the monthly subsidy from Covered California. You can decide to have all of the federal subsidy, a portion, or none of it applied to your monthly health insurance premium. You can take the full amount of the Premium Tax Credit when you file your federal tax return. However, if you are receiving the California Premium Subsidy you must have that monthly amount applied to your health insurance.
No. You can buy a plan directly from one of the health insurance carriers available in your region. But there will be no subsidy to lower the monthly premiums. Enrollment into a health plan directly from the carrier is called off-exchange, as opposed to purchasing a plan on-exchange through Covered California.
No. Covered California mandates that the same rates based on age and region be the same regardless of whether the health plan is sold on-exchange (through Covered California) or off-exchange.
Some plans not offered through Covered California may less expensive, but they do not have the same member cost-sharing conditions. In addition, other plans offered only off-exchange may be more expensive because they have a larger network of providers.
Under the Trump administration, funding for reduced cost-sharing enhanced Silver plans 73, 87, and 94 was eliminated. In order to continue funding the lower copayments, deductibles, and coinsurance for low income households eligible for these plans, Covered California had the carriers add on a surcharge. The surcharge only applies to Silver plans sold through Covered California.
Yes. Some of the carriers offer non-standard benefit design plans in Bronze, Silver, and Gold that are not offered on Covered California. The rates are usually less expensive, but they cover all the exact same benefits as the Covered California standard benefit design Bronze through Platinum plans.
California is broken up into 19 different rating regions for both individual and family plans (IFP) and small employer group plans. Not all carriers offer plans in all regions. In addition, some carriers can only offer plans within certain zip codes within a region. For example, Kaiser cannot offer their health plans to families who live too far away from Kaiser facilities, as the burden to travel to Kaiser providers increases the probability of individuals not seeking any health care.
Individual and family plans, either through Covered California or off-exchange, do have narrow networks. Unless otherwise stated, the network of providers is the same whether you buy a health plan through Covered California or direct from the carrier off-exchange. (Oscar for 2020 has two provider networks: Select through Covered California and Circle off-exchange.)
Some physician offices may not understand what a Covered California plan is and may simply be stating they are not a participating provider for a specific health plan. There are many different networks such as small group, large group, Medicare, and Individual and Family plans. It’s always best to check the provider directory on the carrier’s website to determine if the doctor or other provider is in-network before making an appointment.
Covered California has taken a ‘no wrong door’ approach to helping individuals and families enroll in affordable health insurance. If an applicant is determined to have monthly income that is not high enough for the APTC subsidies, they are determined eligible for Medi-Cal. The consumer’s information is then pushed over to the county in which the family lives for enrollment into a Medi-Cal HMO plan.
Eligibility for the premium tax credit subsidy is based on a household’s income relative to the federal poverty level. Adults, 19 years old, qualify for the subsidy if the household’s income is over 138 percent of the federal poverty level. Dependents, 18 years old and younger, qualify for Medi-Cal if the household income is under 266 percent of the federal poverty level. FPL Covered California Income Chart.
There is an Open Enrollment Period each year beginning usually in October through the end of the year. The health plans will start January 1, if you enroll by December 15th. Outside of Open Enrollment, you need a qualifying life event for a Special Enrollment Period. A qualifying life event can be losing health insurance, such as Medi-Cal or group plan, having a baby, getting married, and moving into California.
NOTE: Medi-Cal has Open Enrollment year round. You can apply for Medi-Cal anytime your income drops below the federal poverty levels making you ineligible for a private plan through Covered California
Health plans directly from the carriers have the same enrollment rules as Covered California.
No. You can apply directly with Covered California using their online application or you can call Covered California directly and receive the help of a service representative. You can also work with a Certified Insurance Agent to enroll in Covered California or in an off-exchange plan.
For some individuals and families with a variety of income sources or self-employed households with fluctuating incomes, it is best to really understand how the application and eligibility process works. In these cases, you may want to consult with an agent familiar with the Covered California online application called CalHEERS (California Healthcare Eligibility, Enrollment, and Retention System)
Yes. You or your agent can always report a change if the household changes, you move, or your income changes.
No. You can cancel your coverage at any time. Just remember, if you voluntarily cancel your coverage – including Medi-Cal – that is not a qualifying event by itself to then enroll in another health plan outside of open enrollment.
Covered California does allow members to purchase dental insurance through their consumer accounts, but there are no subsidy amounts to reduce the monthly premium. There are a couple Covered California approved vision plans offered off-exchange, but not through a consumer Covered California account.