Covered California and the Affordable Care Act are health reform initiatives meant to help Americans get access to quality and affordable medical benefits. One of the primary benefits of these initiatives is the ability to receive subsidies to help reduce the costs of monthly healthcare premiums.
However, according California Healthline and a recent study by H&R Block, nearly two-thirds of taxpayers who received a subsidy on the Covered California exchange are now having to repay taxes to the federal government.
Individuals who were granted too big of a subsidy had to repay about $729 on average compared to those who were given too little of a subsidy and were given back $429 on average.
You can qualify for a Covered California Subsidy if:
- You are a US citizen, US National, or lawfully present immigrant who has purchased coverage through Covered California
- You are not eligible for other public health coverage such as Medi-Cal or Medicare
- You have an annual household income of 138% and 400% of teh Federal Poverty Level (FPL)
About 55% of people who received a subsidy on the exchange had to pay back the federal government. There were about 45% of people who were refunded since they should have been given a higher subsidy.
Get more information on subsidies and eligibility here.
SHOP, also known as the Small Business Health Options Program, is getting a “rebrand” on the Covered California website. The new name of the program for small business will be called Covered California for Small Business. According to some officials, the naming and marketing of the program was not as straightforward as other programs. Therefore, they are hoping that this rebrand will market to a broader audience and entice more businesses to enroll in coverage.
About 2,289 small businesses are currently enrolled in Covered California for Small Business. One of the primary benefits of a small business enrolling in a Covered California health plan is the tax credits.
Small Business Employers who enroll in a Covered California health plan can receive tax credits if:
- they have less than 25 full time equivalent (FTE) employees
- the average wages per FTE are less than $50K
- the employer pays 50% of the employee’s premium cost (minimum)
In order to offer coverage through Covered California for Small Business, employers:
- must have 1-50 Full Time Employees (working at least 30+ hours/week)
- must offer coverage to all Full Time Employees
- *offering coverage to part time employees is optional
NOTE: In 2016, eligibility for Covered California for Small Business will change to include employers with 100 or less employees.
Have any questions regarding the upcoming changes for Covered California for Small Business? Give us a call to learn more!
About 7 out of 10 or 70% of Americans take prescription drugs, which is why the discussions surrounding prescription drug costs are so important.
Covered California officials recently proposed a limit on drug costs for consumers who have specialty prescriptions and purchase a 2016 health plan.Their goal is to give these individuals accessible and affordable coverage for their prescriptions.
The proposal would:
- Place certain drugs in pricing tiers
- Require health plans to publish pricing information about the prescriptions online
- Mandate that there must be at least one drug for a particular condition in a lower tier
For example, this would mean that the cost of a prescription for diabetes would have to be published by the health plan online and there must be a prescription available for diabetes in a lower pricing tier (not all diabetes prescriptions could be offered in the highest tier).
According to Covered California officials, this would enable the the exchange to create better recommendations for specialty drug cost limits.
What else did the proposal say?
- There would be a $500 limit per prescription for specialty drugs in 2016
- Silver plans would pay $200 at most per specialty drug
- Platinum plans would pay $300 at most per specialty drug
- Bronze plans would pay $500 at most for any prescription
- Gold plans would pay $500 at most per specialty drug
Overall, the primary purpose of these caps is to help decrease the gap of information between the drug maker and the consumer. Drug makers have been increasing the cost of drugs to the point where it is almost unaffordable to the consumer. This policy would better explain the cost of the drug and apply a pricing cap to it.
Since the initial launch of Covered California, nearly 1.4 million people have enrolled in the exchange (the goal set by Executive Director Peter Lee was 1.7 million enrollments). Still, there have been a few setbacks that have included special enrollment periods for the past two years to encourage last minute coverage. While last year’s special enrollment period was designed to get last minute signups because of the initial enrollment difficulties, the current special enrollment period is designed to help those who were “unaware of the tax penalty” receive coverage. Thus far, 18,000 people have signed up since the special enrollment period opened February 23rd.
However, California may have a bigger problem on its hands. It was recently ranked as one of the bottom five states in terms of enrollment growth. This is mostly due to the fact that it had significant troubles with retaining enrollees from 2014. Covered California retained 65% of enrollees compared to the 78% retained by the federal exchange.
- Covered California retained 2/3 enrollees
- Covered California grew only 1% since 2014 enrollment
- Nearly 200,000 people who tried enrolling were directed towards the Medi-Cal program (welfare program for low-income individuals)
What do you think? Was Covered California successful in achieving 2015 enrollments despite a few setbacks?
As many of you already know, there is a tax penalty for being uninsured that was supposed to go into effect in 2015. However, Covered California is now extending the deadline to enroll in coverage for people who did not know or realize they would be penalized in 2015 for being uninsured. Therefore, California is allowing consumers to apply for health insurance thru April 30, 2015 during the “Special Enrollment” period only if they they can prove that they did not realize there was a penalty.
How do you prove that you were unaware of the penalty? Consumers have to select “Informed of Tax Penalty Risk” on the dropdown menu when they apply for Special Enrollment here.
Typically, consumer can only enroll in Special Enrollment throughout the year if there is a qualifying life event.
- Having a Child/Adopting a Child/Foster Care
- Moving Homes (ie: you move into a different state of coverage options or a different city of providers)
- Loss of Health Coverage (job, divorce, etc.)
- Change in Income (must prove that the change in income makes the cost of current coverage unaffordable)
- Change in Citizenship
- More Qualifying Events
How do you apply for Special Enrollment?
- Within the first 60 days of the qualifying event, you must enroll in a Covered California health plan or change your existing plan. If you don’t sign up for health coverage within those first 60 days, you could be facing a tax penalty and you have to wait until the next open enrollment period.
- You can apply online or call the Covered California Service Center.
- Typically, coverage starts on the 1st or 15th of the month so it’s important to plan ahead to avoid any periods without coverage. If you enroll in coverage before the 15th of the month, it will become active on the 15th. If you enroll in coverage after the 15th of the month, coverage will start on the first of the following month.
If you have any questions regarding the Special Enrollment period, qualifying events, or the 2015 tax penalty, please feel free to contact us.