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Covered California™ – Frequently Asked Questions

What is Covered California? What is “Obamacare”? Are they the same?

Covered California is a new, easy-to-use marketplace established for California under the federal Patient Protection and Affordable Care Act where you and your family can compare health coverage options and choose the one that best fits your needs and budget. Through Covered California, you may be eligible to receive financial assistance to make health care more affordable. The word “Obamacare” generally is used to refer to aspects of the federal Patient Protection and Affordable Care Act. One aspect of that act is the implementation of new health care marketplaces, such as Covered California.

Who can buy health insurance through Covered California?

Legal California residents, except for currently incarcerated individuals and legal minors, are eligible to buy insurance through Covered California. However, if an enrollee has access to affordable health insurance through another source such as an employer or government program, the enrollee may not qualify for financial assistance through Covered California.

What documents will be verified for enrollment into Covered California?

In accordance with federal law, if you are seeking potential federal premium assistance, you will be asked to provide information during the enrollment process to verify your income, citizenship and residency. This information will include:

  • Employer and income information for everyone in your family. A family is defined as the person who files taxes as head of household and all the dependents claimed on that person’s taxes. If you don’t file taxes, you can still qualify for free or low-cost insurance through Medi-Cal.
  • Employer and income information for everyone in your family. A family is defined as the person who files taxes as head of household and all the dependents claimed on that person’s taxes. If you don’t file taxes, you can still qualify for free or low-cost insurance through Medi-Cal.

When will I be able to get coverage through Covered California?

Covered California began enrollment on Oct. 1, 2013, for coverage that will take effect Jan. 1, 2014. If you are eligible for Medi-Cal, the open enrollment period does not matter.

This open-enrollment period is the period of time that many Californians can get federal premium assistance to reduce their costs. This premium assistance is only available through Covered California. If you have a life-changing event, such as the loss of a job, a marriage or divorce, or the birth of a child, then you qualify for “special enrollment” within 60 days of that event. The next open-enrollment period for Covered California begins in October 2014 for coverage in 2015.

What if I have a pre-existing health condition?

Starting in 2014, insurance companies will be required to sell policies to everyone regardless of current or past health issues, and they will be prohibited from using your health status to determine how much your health insurance will cost. You cannot be denied coverage or even screened based on a pre-existing medical condition. It is important to remember that this requirement only applies during the open-enrollment periods.

What does Covered California health insurance cover?

All health insurance plans offered through Covered California cover a comprehensive set of benefitsknown as “essential health benefits.” They include the following 10 categories:

  • ambulatory patient services
  • emergency services
  • hospitalization
  • maternity and newborn care
  • mental health and substance use disorder services, including behavioral health treatment
  • prescription drugs
  • rehabilitative and habilitative services and devices
  • laboratory services
  • preventive and wellness services and chronic disease management
  • pediatric services, including oral and vision care

In addition to the above, the Covered California health plans are offered with standard benefit designs so you can make comparisons between plans.

How much will it cost me to purchase health insurance through Covered California, and will I be eligible for financial assistance?

Health insurance premium costs through Covered California will be based on age, where you live (ZIP code), household size and income, and the health plan and benefit level you select.

What kind of help is available to reduce the cost of insurance?

Starting in 2014, individuals seeking health coverage will be helped to afford coverage in three ways:

    1. Premium assistance: Premium assistance is available to reduce the cost of health coverage for individuals and families who meet certain income requirements and do not have health insurance from an employer or a government program.

 

    1. Cost-sharing subsidies: Based on income, cost-sharing subsidies are available to reduce out-of-pocket health care expenses such as co-payments, prescriptions, or other costs.

 

  1. Medi-Cal assistance: Starting in 2014, California is planning to expand the Medicaid program (called Medi-Cal in California) to cover people under age 65, including people with disabilities, or those with income of less than $15,856 for a single individual and $32,499 for a family of four. The coverage is free for those who qualify and is part of the provisions of the Affordable Care Act. To find out more about Medi-Cal, please contact Medi-Cal directly at (800) 541-5555 or visit www.dhcs.ca.gov/services/medi-cal/Pages/Medi-CalFAQs1.aspx.

Am I eligible for premium assistance?

Premium assistance is available to individuals and families who meet certain income requirements and do not have access to affordable health insurance through their employer that also meets minimum coverage requirements. An individual making up to $45,960 and a family of four earning up to $94,200 may be eligible for premium assistance. Key facts about premium assistance…

  • Reduces the cost of your premium
  • Helps low- and middle-income individuals and families who meet certain income requirements
  • Can be applied to the cost of your health plan when you enroll.
  • Only available through Covered California
  • Paid directly to your health plan.
  • Adjusted at the end of the benefit year based on your actual income, if your income is different than you anticipated. Notify Covered California if your income changes.

Am I eligible for cost-sharing subsidies?

In addition to the premium assistance that reduces your monthly premium payments, you may be eligible for cost-sharing subsidies that reduce the amount you pay out of pocket when you get care. Eligibility for subsidies is based on income level and family size. You may be eligible for subsidies if your income is $28,725 or less for a single person and $58,875 or less for a family of four in 2012.

Do I have to buy health insurance? What are the penalties for not having health coverage?

There will be penalties for individuals who choose not to get affordable insurance. These penalties are part of the federal law and will be collected by the IRS as part of individual tax filing for 2014.

In 2014, an individual who does not maintain minimum health coverage will face a penalty of $95 or 1 percent of income, whichever is greater.

For 2015, the penalty increases to $325 per adult and $162.50 per child (up to $975 for a family) or 2 percent of family income, whichever is greater.

For 2016, the penalty is $695 per adult and $374.50 per child (up to $2,085 for a family) or 2.5 percent of family income, whichever is greater.

However, some individuals may be exempt from paying 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 2013, $9,750 for a single person and $27,100 for a married couple with two children)
  • people who qualify for religious exemptions
  • undocumented immigrants
  • incarcerated individuals
  • members of federally recognized American Indian tribes and Alaska Natives

What if I already have health insurance?

If you already have health insurance provided by your employer that is affordable, you do not need to do anything. If you are paying more than 9.5 percent of your household income toward insurance premiums, then you may be eligible for financial assistance available through Covered California. If you have insurance from your employer and apply for premium assistance, Covered California will determine whether that health plan is affordable and provides adequate coverage. If that coverage is determined to be affordable and adequate, then you cannot receive government premium assistance for new insurance.

If you have health insurance that you pay for yourself, you may be eligible for financial help such as premium assistance that can reduce your costs. You can purchase the same kinds of health insurance plans from Covered California as you can in the private market, but you can only receive financial help if you buy insurance through Covered California.

I have health insurance through my employer, but coverage for my spouse and child are too expensive. Would I be eligible for premium assistance for a plan for my child?

Whether you or your family are eligible for premium assistance depends on whether you have an offer of coverage that includes your spouse and dependents and (1) is affordable and (2) meets the standard for minimum coverage. The affordability of employer-provided coverage is evaluated on these two
criteria:

  • The total annual premium you pay for self-only coverage is 9.5 percent or less of your annual household income.
  • Your employer-provided plan covers at least 60 percent of health care costs for an average population.

Your employer or your health insurance plan should notify you as to how much the plan covers. If those two criteria are met, your employer’s plan is considered “affordable” under the law, and your family members would not qualify for premium assistance through Covered California.

If your employer-provided coverage does not include dependent coverage, or if your employer does not offer dependent coverage, your spouse and child may qualify for subsidies through Covered California since they would not be offered coverage. In that case, their eligibility would be based on the family’s income.

If my employer-provided insurance does not include dependent or spouse coverage (not offered), can my spouse and dependent(s) qualify for coverage in the Individual Exchange? Can they qualify for subsidies or Medi-Cal?

Under the new insurance rules that take effect in 2014, employees and their family members who do not have coverage through an employer will be able to buy insurance through Covered California’s individual exchange. Depending on income level, family members might also qualify for subsidized coverage or no-cost coverage through Medi-Cal.

If my employer offered dependent or spouse coverage (with or without a % of premium paid) but I elected not to enroll them, can my spouse and dependent(s) qualify for coverage in the Individual Exchange? Can they qualify for subsidies or Medi-Cal?

Spouses and child dependents will be eligible for coverage in Covered California’s individual exchange regardless of employer coverage offers. However, when dependent coverage is “offered” in a nemployer-sponsored plan (regardless of employer contribution to the dependent coverage) subsidy eligibility will be dependent on the affordability of the employee-only share of premium costs and if those costs exceed 9.5% of the employee’s W-2 wages. Costs for dependent coverage are not part of the affordability calculation with respect to employer-sponsored coverage. So if the employer’s offer of coverage is affordable according to this measure, neither the employee nor the dependents will be

subsidy eligible.

What is considered annual income?

Income includes wages, salaries, tips, business or self-employment income, rental income, interest received or accrued, lottery and gambling income, capital gains, pensions, Social Security retirement benefits, foreign-earned income, alimony income and bartering income (i.e., exchange of goods or services without exchanging money).

For the purposes of determining eligibility for premium assistance and cost-sharing assistance,

Covered California will use your modified adjusted gross income (MAGI). For most taxpayers, MAGI is the same as adjusted gross income (AGI), which can be found on:

Line 4 of a Form 1040EZ, or Line 21 of a Form 1040A, or Line 37 of a Form 1040

It’s important to remember that if you claim your spouse or children as dependents, their incomes count toward your household income. In order to receive premium assistance through Covered California, spouses are required to file their income tax returns jointly.

What if my income changes?

If your income changes over the year, your premium assistance will be adjusted accordingly. If your income changes and you do not report it to Covered California, you will have to pay the difference at tax time. If you have Medi-Cal coverage and your income increases to more than $15,856 a year for an individual or $32,499 for a family of four, you would no longer qualify for this no-cost government insurance plan. However, through Covered California, you could find affordable coverage and financial assistance to help pay the premiums.

Glossary of Terms

Affordable Care Act

Enacted in March 2010, the federal Patient Protection and Affordable Care Act (Affordable Care Act), occasionally referred to as “Obamacare,” provides the framework, policies, regulations and guidelines for implementation of comprehensive health care reform by the states. The Affordable Care Act expands access to quality, affordable insurance and health care.

affordable coverage

Employer coverage is considered affordable — as it relates to premium assistance from the federal government (also known as the Advanced Premium Tax Credit [APTC]) — if the employee’s share of the annual premium for self-only coverage is no greater than 9.5 percent of annual household income. Individuals offered employer-sponsored coverage that’s affordable and provides minimum value are not eligible for premium assistance.

ambulatory patient services

Medical care provided without need of admission to a health care facility. This includes a range ofmedical procedures and treatments such as blood tests, X-rays, vaccinations and even monthly well-baby checkups by pediatricians.

annual household income

The total amount of income for a family in a calendar year. The modified adjusted gross income of the household used for tax purposes.

co-insurance

Your share of the costs of a covered health care service, calculated as a percentage (for example, 20 percent) of the allowed amount for the service. You pay coinsurance plus any deductible you owe. For example, if the health insurance plan’s allowed amount for an office visit is $100, and you have met your deductible for the year, your coinsurance payment of 20 percent would be $20. The health plan pays the rest of the allowed amount.

co-payment

A fixed amount (for example, $15) you pay for a covered health care service, usually when you receive the service. The amount can vary by the type of covered health care service.

cost-sharing

The share of costs covered by your insurance that you pay out of your own pocket. This term generally includes deductibles, coinsurance and copayments, or similar charges, but it doesn’t include premiums, balance billing amounts for non-network providers, or the cost of non-covered services. Cost-sharing in Medicaid and Children’s Health Insurance Program also includes premiums.

deductible

The amount you owe for health care services your health insurance plan covers before your plan begins to pay. For example, if your deductible is $1,000, your plan won’t pay anything until you have met your deductible for covered health care services. The deductible may not apply to all services.

dependent

A child or other individual for whom a parent, relative or other person may claim a personal exemption tax deduction. Under the Patient Protection and Affordable Care Act, individuals may be able to get premium assistance to help cover the cost of coverage for themselves and their dependents.

eligible immigration status

An immigration status that’s considered eligible for getting health coverage through Covered California. View a list of individuals with “lawfully present” status for eligibility and enrollment purposes in the individual market.

emergency services

Evaluation of an emergency medical condition and treatment to keep the condition from getting

guaranteed issue

A requirement that health insurance plans must permit you to enroll regardless of health status, age, gender or other factors that might predict the use of health services.

Health insurance plans sold through Covered California, the state’s marketplace for the federal Patient Protection and Affordable Care Act, provide essential health benefits, follow established limits on cost-sharing (such as for deductibles, copayments and out-of-pocket maximum amounts) and meet other requirements of the federal health care law.

health maintenance organization (HMO)

A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the health maintenance organization (HMO). It generally won’t cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness.

legal resident of California

A person who is lawfully present is determined in accordance with federal law. You can find out if you meet the requirements of being lawfully present by reviewing this document(www.coveredca.com/PDFs/English/Covered_California_List_of_Lawfully_Present_Individuals.pdf)

Medi-Cal

California’s Medicaid health care program. This program provides free medical services for children and adults with limited income and resources. Your local county welfare/social services department manages Medi-Cal eligibility determinations. Visithttps://www.coveredca.com/coverage-basics/medi-cal.html for more information.

minimum coverage plan

Covered California health insurance plans — and all health plans in the individual and small-group markets — are sold in four levels of coverage: Bronze, Silver, Gold and Platinum. In addition to these categories, Covered California offers a “minimum coverage plan,” also known as a “catastrophic plan,” which helps protect a person from financial disaster in the event of a serious and expensive medical emergency. Minimum coverage plans are designed to cover excessive medical bills that occur above the limit that you would be able to manage financially. Covered California offers minimum coverage to those up to age 30 or those individuals who prove they are without affordable coverage options or are experiencing financial hardship.

network

The facilities, providers and suppliers with whom your health insurer or plan has contracted to provide health care services.

open enrollment

A designated period of time each year — usually a few months — during which insured individuals or employees can make changes in health insurance coverage.

out-of-pocket costs

An out-of-pocket expense is a non-reimbursable expense paid by a patient. This could include any medical benefits that a plan doesn’t consider “covered services.”

out-of-pocket limit

The most you pay during a policy period (usually a year) before your health insurance or plan begins to pay 100 percent of the allowed amount. This limit never includes your premium, balance-billed charges or health care your health insurance plan doesn’t cover. Some health insurance plans don’t count all of your co-payments, deductibles, coinsurance payments, out-of-network payments or other expenses toward this limit. In Medicaid and Children’s Health Insurance Program, the limit includes premiums.

Patient Protection and Affordable Care Act

Enacted in March 2010, the federal Patient Protection and Affordable Care Act (Affordable Care Act), occasionally referred to as “Obamacare,” provides the framework, policies, regulations and guidelines for implementation of comprehensive health care reform by the states. The Affordable Care Act expands access to quality affordable insurance and health care.

pre-existing medical condition

Any illness or condition a patient has prior to obtaining insurance.

preferred provider

A provider who has a contract with your health insurer or plan to provide services to you at a discount. Check your policy to see if you can see all preferred providers or if your health insurance or plan has a “tiered” network and you must pay extra to see some providers. Your health insurance or plan may have preferred providers who are also “participating” providers. Participating providers also contract with your health insurer or plan, but the discount may not be as great, and you may have to pay more.

preferred provider organization (PPO)

A type of health insurance plan that contracts with participating doctors and hospitals to create a network. You pay less if you use doctors and hospitals that belong to the plan’s network. You can use doctors, hospitals and others outside the network for an additional cost.

premium

The amount that must be paid for your health insurance or plan. You or your employer, or both, usually pay it monthly, quarterly or yearly.

premium assistance

One of the largest subsidy programs for health insurance, to help consumers pay health insurance premiums. Tax credits are also available to small businesses with fewer than 25 full-time-equivalent employees to help offset the cost of providing coverage.

preventive services/preventive care

Routine health care that includes screenings, checkups and patient counseling to prevent illnesses, disease or other health problems.

pricing region

There are 19 pricing regions in California. For health plans that consumers can get through Covered California, either with or without premium assistance, the plans available and their prices vary by region.

primary care provider

A physician (medical doctor [M.D.] or doctor of osteopathic medicine [D.O.]), nurse practitioner, clinical nurse specialist or physician assistant, as allowed under state law, who provides, coordinates or helps a patient access a range of health care services.

rehabilitative/rehabilitation services

Health care services that help you keep, get back or improve skills and functioning for daily living that have been lost or impaired because you were sick, hurt or disabled. These services may include physical and occupational therapy, speech-language pathology and psychiatric rehabilitation services in a variety of inpatient and outpatient settings.

subsidy

Cost-sharing subsidies and premium assistance reduce the cost of premiums and out-of-pocket expenses for health coverage that qualifying individuals and families purchase through Covered California.

urgent care

Care for an illness, injury or condition serious enough that a reasonable person would seek care right away, but not so severe as to require emergency room care.

well-baby and well-child visits

Routine doctor visits for comprehensive preventive health services that occur when a baby is young and

annual visits until a child reaches age 21. Services include physical exam and measurements, vision and

hearing screening, and oral health risk assessments.