Frequently Asked Questions about Covered CA
The Affordable Care Act
What is Covered California?
Covered California makes it possible for you to purchase high-quality health insurance and have access to financial assistance that helps pay for coverage. To find the right health care insurance option you may shop online, purchase over the phone or in person.
Individuals and small businesses can compare different health insurance plans through Covered California. They can find out if they qualify for federal financial assistance that will lower the cost of health insurance, and learn if they are eligible for health programs like Medi-Cal. In addition, employers with fewer than 25 full-time workers will be able to find out if they qualify for a small business tax credit that will help cover cost of providing employee health care.
To learn about the organization that runs Covered California, please visit www.hbex.ca.gov.
Who can use Covered California to purchase insurance?
Legal residents of California without access to affordable health insurance either through their employer or other government program will be eligible to purchase coverage through Covered California.
Employers with 50 or fewer full-time employees also will be able to purchase insurance through Covered California.
When can I purchase coverage through Covered California?
Enrollment through Covered California begins later this year and will continue through March 31, 2014.
It is required to purchase health insurance during this open-enrollment period in order to obtain coverage in 2014. If enrollment is not made during this period, coverage will not be assured either through Covered California or in the private market. If you have a life-changing event (for example, loss of a job, death of a spouse or birth of a child) you are eligible for special enrollment within 60 days of the event.
The next open-enrollment period begins in October 2014 for coverage in 2015.
What kind of health insurance will be offered through Covered California?
Covered California will offer the same kind of high-quality health plans that are like the plans available on the private market today. These Qualified Health Plans guarantee to provide the essential levels of coverage and consumer protections required by the Affordable Care Act. The plans will be offered in categories that are based on percentage of the covered expenses paid by the health plan.
The health plan choices offered by Covered California will be as good as what can be obtained from anywhereeven if you do not qualify for a subsidy. Health insurance companies are required to offer the same products at an identified price whether they are offered through Covered California or in the open market.
In addition to traditional health plans, Covered California will offer "catastrophic coverage," which assists in protecting a person from financial disaster in the event of a serious and expensive medical emergency. Catastrophic coverage does not apply to day-to-day medical expense such as doctor visits, prescription medicines or even emergency room visits. Catastrophic coverage is designed to cover excessive medical bills that occur above the limit that you would be able to manage financially. Covered California provides catastrophic coverage for those up to age 30, or those individuals who can provide a certification that they are without affordable coverage or experiencing hardship.
How will Covered California make it easier for me to compare different plans?
There are four levels of coverage: Platinum, Gold, Silver and Bronze. This ranking system makes it easy to compare various health plans. As the metal category increases in value, so will the percent of medical expenses that a health plan covers. Expenses are normally incurred at the time of health care services: when you visit the doctor or the emergency room, for example. The plans that cover more of your medical expenses typically will have a higher monthly payment, but you will pay less whenever you receive medical care.
You have the option to pay a higher monthly cost so that when you need medical care, you will pay less. Or you can elect to pay a lower monthly cost so that when you need medical care, you pay more. You can choose the level of coverage that best meets your health needs and budget.
How much will it cost to purchase health insurance through Covered California?
Cost of health insurance will depend on the amount of coverage you choose to purchase and whether you qualify for financial assistance that can be paid to the private health plan you pick through Covered California to lower your monthly payment. Covered California is the only place where you can use these tax credits to make insurance more affordable. The Californians who have lower incomes will benefit from lower costs in the plan they choose.
What kind of help is available to help lower the cost of insurance?
Starting in 2014, individuals seeking health coverage will be helped to afford coverage in three ways:
1. Tax credits: available for individuals and families who meet certain income requirements and do not have health insurance from an employer or a government program. tax credits can be immediately applied to the insurance premium, which reduces the amount you pay each month when you enroll through Covered California.
2. Cost-sharing subsidies: reduce the amount of out-of-pocket health care expenses individuals or a family has to pay. These expenses might include the copaymentsCopaymentA fixed amount you pay for a covered health care service, usually when service is received. The amounts vary by the type of covered health care service.
3. Medi-Cal assistance: beginning in 2014, the State of California is planning to expand the Medicaid program (called Medi-Cal in California) to cover people under age 65, including people with disabilities, with income of less than $15,000 for a single individual and $31,180 for a family of four. This is free coverage for those who qualify and part of the provisions of the Affordable Care Act.
Am I eligible for tax credits?
Tax credits will be available for individuals and families who meet certain income requirements and that don't have access to affordable health insurance through employment that also meets minimum coverage requirements.
Eligibility is based on the "federal poverty level," a standard that looks at the family income and the number of people in the family. The amount of tax credit is based on a sliding scale, with those making less money getting a larger financial assistance to help lower the cost of their coverage. Individuals and families who make between 138 percent and 400 percent of the federal poverty level may still be eligible for a tax credit. This means that individuals making up to $44,680 and a family of four earning up to $92,200 may be eligible for credit.
There are some key facts about tax credits.
Tax credits lower the cost of your premium. Theae credits reduce the amount of the premium you will pay for insurance
Tax credits help low- and middle-income individuals and families. Available to individuals and families who meet certain income requirements.
Tax credits can be used when you enroll. Tax credits will be immediately applied to the cost of your health plan when you enroll - you do not need to wait until you file a tax return at the end of the year.
Tax credits are only available through Covered California. It is required that you enroll in a health plan through Covered California if you want to use your tax credits.
Tax credits are paid directly to your health plan. Paid by Covered California to your health plan to keep your costs low.
Tax credits will be adjusted at the end of the year based on your actual income. Tax credits can be adjusted at the end of the year if your income is different than you anticipated. This means that you will want to notify Covered California if your income changes.
Businesses with 25 or fewer full-time employees are also eligible for tax credits if certain criteria is met. For more on small business tax credits, you can read the Small Business Tax Credit Fact Sheet
How much will the tax credit help me?
The size of the tax credit will depend on the household income and family size of eligible individuals. Below are examples of potential costs to families in California. Covered California will make available the precise premium and plan choices so you will know the exact cost of what your insurance will be.
Tax credits are available immediately when you buy insurance so you do not have to pay all of the premium costs up front and wait for reimbursement. The credits will be available to everyone who is eligible for them, whether they file taxes or not. The credits will only be available for health insurance purchased through Covered California and will be paid directly to your private health plan by Covered California.
Do I have to buy health insurance?
If you don't have health insurance, you should consider purchasing a plan. Health insurance is an important way to guarantee that you have access to medical care when you need it. Starting in January 2014, most people will be required to have health insurance or will have to pay a penalty if they don't. Coverage may include employer-provided insurance, coverage someone buys on their own, Medicare or Medi-Cal.
The penalty phases in for three years and becomes increasingly more expensive. In 2014, the penalty will be 1 percent of annual income or $95, whichever is greater. By 2016, the penalty will be 2.5 percent of your annual income or $695. This means that if you do not have coverage in 2014, you will be required to pay a penalty when you file your taxes at the end of the year.
Some people do not have to pay a penalty, including:
- People who would have to pay more than 8 percent of their income for health insurance
- People with incomes below the threshold required for filing taxes (in 2012, $9,750 for a single person and $27,100 for a married couple with two children)
- People who qualify for religious exemptions
- Undocumented immigrants
-People who are incarcerated
- Members of Native American tribes
- There will be a penalty for people who are not covered and do not fall into one of these categories.
Businesses with 50 or more full-time equivalent employees may be subject to a penalty beginning in 2014 if it does not offer health insurance to employees (and their dependents).
Will Health Savings Account (HSA) plans still be available?
Yes, HSA plans will be an option.
Will there be any HMO options?
Yes, HMO plans will be an option.
If I want to eliminate the headache, and have a Broker handle it for me what is the fee?
There will not be a charge for the use of Broker Services.