New Special Enrollment Extension for Covered California

It may come as a surprise to some Californians that our state has implemented its own penalty for those who do not have health insurance in 2020. It is similar to the federal penalty under the ACA (Affordable Care Act aka Obamacare). While the federal law continues to be in effect, by the President eliminated enforcement of the penalty collection part of the legislation in 2019, using an Executive Order.

In response to this confusion, Covered CA the state’s Exchange, has extended the open enrollment period until April 30, 2020 for those that were unaware of the new CA law. Individuals that have individual coverage, but did not know they would qualify for subsidies may also take advantage of this extension. Further, there are additional subsidies for CA residents, above the Federal subsidies.

Act now if you are going to proceed. If you enroll by March 31, you will not incur a penalty. However, if you wait and enroll in April, you will have to pay the penalty for the entire period of the coverage gap, including the three-month short coverage gap period. So best to enroll before the end of March.

California was one of the first states to create its own Exchange. After a rocky start, it has proven to be one of the most successful. The state’s uninsured population reduced from 17% to 7.2% from 2013 to 2018, the largest drop of any state.

Covered CA reports that the state has consistently reported a “risk score” approximately 20% below the national average in the individual market, which is “likely to have saved enrollees and the US Treasury an estimated $12.5 billion over the past five years.” Other states have seen a drop of enrollment near 45% while CA enrollment has stayed stable with a slight increase this year.

The value of the subsidies cannot be overstated for those that qualify. We have clients paying only $1 month for coverage, that would be over $900 monthly without subsidies. The fact that one must purchase coverage through Covered CA to be able to access the subsidies, makes this special enrollment period even that much more valuable. If one has coverage outside the Exchange and finds that they even might qualify, it will be worthwhile to consider re-applying through the Exchange.

Covered CA is working with the carriers to determine how they might be able to allow consumers to be credited for deductibles and out of pocket expenses already accrued for 2020. As of this writing it has not been guaranteed.

Qualifying for a subsidy continues to be subject to the same rules in terms of household size and income. To see an estimate go to www.coveredca.com and click on “Shop and Compare”. Remember when it asks for household size, it is your tax household. You must be able to claim a dependent on your tax return in order to qualify them as part of your tax household. Be wary of marketing sites that come up when you are searching for the site. Don’t go to the “ads” or “sponsored” sites. That will just put you in a marketing Que.

To talk to a live person, call 800-300-1506 and talk to one of their representatives.

A final important note is to understand that if you or your spouse is offered “affordable” health insurance coverage by an employer, the family is likely not eligible for a subsidy. What you might think is affordable is not the same as the government’s definition:

A job-based health plan covering only the employee that costs 9.78% or less of the employee’s household income. If a job-based plan is “affordable,” and meets the “minimum value” standard, you’re not eligible for a premium tax credit if you buy a Marketplace insurance plan instead.

  • The plan used to define affordability is the lowest priced “self-only” plan the employer offers — meaning a plan covering only the employee, not dependents. This is true even if you’re enrolled in a plan that costs more or covers dependents.
  • The cost is the amount the employee would pay for the insurance, not the plan’s total premium.
  • The employee’s total household income is used. Total household income includes income from everybody in the household who’s required to file a tax return.

The best place to get examples and further information is: https://www.healthcare.gov/glossary/affordable-coverage/.

Don’t miss an opportunity to have coverage and help paying for it!

Margaret R. Beck
Margaret Beck  CLU, ChFC, CEBS started her insurance practice in Redding in 1978. As an insurance broker/consultant,  she represents businesses and individuals as their advocate.  She assists in choosing proper products, compliance with complex benefit laws and claims issues once coverage is placed. All information in her column is provided to the best of her knowledge, subject to final regulation by the respective agencies. Questions to be answered in this column can be submitted to info@insuranceredding.com. Beck's column is also published in the Redding Record Searchlight.
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