Claudia Buck

August 9, 2014

Claudia Buck: Some need-to-know items under Covered California and the Affordable Care Act

This year, hundreds of thousands of Californians got health care coverage under the state’s new Covered California program.

Claudia Buck

Personal finance news and advice you can use

This year, hundreds of thousands of Californians got health care coverage under the state’s new Covered California program.

If you’re one of them, state and federal officials have a couple of reminders for you.

At the same time, sign-ups for 2015 coverage under the federal Affordable Care Act are just around the corner. Here’s some info that might help:

Major life changes?

First, if anything in your life has changed this year – you gave birth or adopted a baby, got married or divorced, had a drop – or better yet, an increase – in income, you need to contact Covered California.

That’s because those life changes could affect what you’re getting in subsidies to help pay your premiums.

Of the 1.4 million people who signed up last year for Covered California health plans, about 88 percent were eligible for federal tax credits to offset the cost of their monthly premiums. The tax credit come in two forms: “Get it now” (paid directly to the health care provider) or “Get it later” (claimed on next year’s tax return).

Almost all – 90 percent – of those who signed up for 2014 coverage chose the “get it now” option, where their tax credit is applied directly to their monthly premium.

The amount of premium assistance varies widely, depending on household size, income, region, etc. For example, a Sacramento County family of four with two children under age 18 and a family income of $70,000 could qualify for $606 in monthly tax credits, if signed up for the lowest Bronze-level health care plan.

“In some cases, it can be half or more of what they’re required to pay,” said Roy Kennedy, Covered California spokesman.

But major lifestyle changes can mean you’re paying too little or too much when it comes to monthly premiums.

“Those changes in your circumstances will affect whether your advance premium tax credit decreases or increases,” said IRS spokesman David Tucker in Seattle. He urged individuals with health care policies under the Affordable Care Act to notify their marketplace. “It could mean an adjustment of your premium,” he said.

According to the IRS, receiving too much or too little on an advance tax credit can affect your refund or balance due when you file your 2014 tax return.

Special circumstances

Generally, if you missed the original March 31 deadline to sign up for this year’s first-ever Covered California health plans, the door was closed until enrollment opens again this fall for 2015. However, there’s a loophole for those who experienced “life-changing” events since the March deadline. Those events include: marriage, divorce, birth or adoption of a child, loss of a job, or a move.

If any of those events affected you this year, a special one-time window lets you apply for a Covered California policy before the next enrollment period begins in November. Contact Covered California for details.

Sign-ups for 2015

The next open enrollment period for Covered California is Nov. 15 through Feb. 15, 2015. For uninsured Californians who missed this year’s first-ever sign-up period, it will be a second chance to sign up for health care coverage through the state’s marketplace.

Those with existing Covered California policies who want to renew their policies without making any changes can do so beginning in October, according to Kennedy. Notices will be going out later this month, notifying consumers of their options.

On July 31, Covered California announced that premiums will increase by an average of 4.2 percent for 2015 policies, although some plans will not charge higher rates or may even decrease premiums.

The same 10 companies, ranging from Anthem Blue Cross to Western Health Advantage, will offer health care plans this year to California consumers.

Kennedy said the state hopes to add about 500,000 more people to its enrollment rolls. “We hope to reach anybody who’s eligible who didn’t sign up the first time,” particularly in the Latino and African American communities, Kennedy said. “We have a lot of work to do across many different ethnic communities.”

The ethnic breakdown of the 1.4 million Californians who signed up for 2014 coverage was: 35 percent white, 28 percent Latino, 21 percent Asian and 3 percent African American.

“We encourage people if they have any questions or are unsure about health care coverage, to contact us,” said Kennedy. “For those who’ve never had insurance before, this can be a confusing process. We’re here to help.”

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