With most of the Affordable Care Act’s major provisions now in effect, the nation’s health insurance marketplace has undergone a significant transformation. Obamacare impacts individuals, families and small business owners alike. Most Americans are required to have minimum essential coverage unless they qualify for an exemption; however, the law is designed to make health insurance more accessible and affordable with income-based financial assistance and one-stop shopping via state-based and federally facilitated exchanges. Meanwhile, the private marketplace remains a place to shop for quality, affordable health insurance plans that meet ACA requirements.
The following guide offers a glimpse at the various types of ACA-compliant health insurance in California, including individual and family health insurance plans, small group health plans, coverage for high-risk applicants, mini-COBRA continuation coverage, Medicaid, and CHIP.
Health and healthcare in California
With a population of 37.3 million, California is the largest state in the U.S., based on 2010 Census data.
California ranked 17th in United Health Foundation’s 2014 America’s Health Rankings.1 Its strengths include a low prevalence of smoking and physical inactivity, as well as low infant mortality, cancer deaths and premature deaths.The report listed its challenges as high levels of air pollution, a high percentage of uninsured population and low immunization among children.
California Individual and family health insurance
When the Obamacare health insurance exchanges opened for 2014 enrollment, California launched Covered California, its own state-based marketplace. Individuals and families living in California may purchase health insurance coverage through the state’s exchange at coveredca.com, and in the private marketplace
Those who buy health insurance through Covered California may be eligible for income-based subsidies, including premium tax credits that may be applied to any metal plan and cost-sharing subsidies that apply to silver plans. Individuals who go without health insurance may face a tax penalty known as the shared responsibility payment.
The Department of Health and Human Services reported that 1,405,102 individuals in California selected a marketplace plan through the exchange from Oct. 1, 2013, through April 19, 2014.2 In 2015, the number of individuals in California enrolled in a marketplace plan only slightly increased to 1,412,200 during the open enrollment period.3
California small group health insurance plans
In California, small businesses with 50 or fewer employees may purchase small group health insurance plans through Covered California’s SHOP marketplace atcoveredca.com/small-business, as well as in the private marketplace.
Small businesses that use Covered California’s SHOP marketplace and have 25 or fewer employees may qualify for a Small Business Healthcare Tax Credit.
Self-employed individuals with no employees must apply for an individual health insurance plan on or away from Covered California.
California state COBRA variations for small groups
The Consolidated Omnibus Reconciliation Act (COBRA) allows those employed by businesses with 20 or more employees to continue their group health insurance plan for a limited time should they lose coverage due to qualifying events such as termination of employment due to reasons other than gross misconduct, a reduction in work hours, divorce or legal separation, and loss of dependency status. To learn more about the federal COBRA program, visit dol.gov/ebsa/cobra.html.
In some states, those who work for a small business and lose health insurance coverage due to a qualifying event may qualify for health insurance continuation through mini-COBRA programs. State mini-COBRA programs allow those who work for a small business and lose health insurance coverage due to a qualifying event to continue coverage, too. These programs generally work like the federal COBRA continuation coverage, but their terms may vary.
California’s small group COBRA continuation variations are as follows:4
|Mini-COBRA option||Yes; known as Cal-COBRA|
|Eligible group sizes||Employers and group health plans with 2 to 19 employees | Those who have used up their federal COBRA|
|Extension of benefits period – standard||Up to 36 months for small employers (2 to 19 employees) 18 months for large employers, if federal COBRA was 18 months (20+ employees)|
|State legislation reference||California Continuation Benefits Act of 1997 (Cal-COBRA), 10128.50–10128.59|
|State legislation reference||None|
|Additional notes||Employers must notify employees of the ability to continue coverage. Employees have 60 days from being notified to elect coverage and must make their first premium payment within 45 days of sending their enrollment form.Employees must notify an employee’s health plan within 30 days if his or her hours have been cut or employment has been terminated. Employees have 60 days to notify employers and their health plans if they divorce, legally separate or can no longer be considered a dependent.|
California high-risk pools
It used to be that health insurance companies could deny applicants or charge them more based on health history and preexisting conditions. When the Affordable Care Act was passed in 2010, many states created federally funded preexisting condition insurance programs or accepted federal funding to assist with similar high-risk pool programs they already operated.5
The Affordable Care Act prohibits this practice for health insurance plans considered minimum essential coverage with effective dates beginning Jan. 1, 2014, and later. As such, the PCIPs and state high-risk pools created to provide health insurance for those once considered uninsurable are being phased out.
Coverage for those enrolled in California’s PCIP ended April 30, 2014.6
Medicaid is a state health insurance program for low-income individuals under age 65, pregnant women, children, disabled individuals, and seniors over age 65; it is partially funded by the federal government. In 2014, states were given the option to accept additional federal funding and expand their Medicaid program eligibility to those who make up to 138 percent of the federal poverty level.
California opted to expand its Medicaid program, Medi-Cal, in 2014. As of March 31, 2014, the end of 2014 open enrollment, approximately 1.9 million people enrolled in Medi-Cal. As stated earlier, Medi-Cal was the most common source for California’s 3.4 million previously uninsured who gained coverage during 2014 open enrollment.7
The information below is specific to California’s Medi-Cal program:
|Governing agency||Centers for Medicare & Medicaid|
|Administrator||California Department of Health Services|
|Where to apply||coveredca.com | Visitdhcs.ca.gov/services/medi-cal/pages/applyformedi-cal.aspx to learn about additional application options|
|Residency requirements||California resident, U.S. citizen, qualified non-citizens|
|Eligibility||Based on household size and income, up to 138 percent of the federal poverty level, as well as other criteria. Visitdhcs.ca.gov/services/medi-cal/Pages/DoYouQualifyForMedi-Cal.aspx|
|Open-enrollment period||Year-round in all states|
The Children’s Health Insurance Program is a partnership between the states and federal government. CHIP provides health insurance to uninsured children who meet certain eligibility guidelines.
The information below is specific to California’s CHIP program, which falls under Medi-Cal:
|Where to apply||coveredca.com | Visit dhcs.ca.gov/services/medi-cal/pages/applyformedi-cal.aspx to learn about additional application options|
1 United Health Foundation. 2014 America’s Health Rankings Annual Edition. “Annual State Health Rankings.” http://www.americashealthrankings.org
2 Kaiser Family Foundation http://kff.org/other/state-indicator/state-marketplace-statistics-2014/.
3 Kaiser Family Foundation http://kff.org/other/state-indicator/state-marketplace-statistics-2015/.
sup>4 California Department of Managed Care. “What is COBRA?” CA.gov. 2014. Retrieved from http://www.dmhc.ca.gov/healthplanscoverage/whatiscobra(federalcobraandcal-cobra.aspx.
5 National Conference of State Legislators. Coverage of Uninsurable Pre-Existing Conditions: State and Federal High-Risk Pools. Updated April 2014. Retrieved from http://www.ncsl.org/research/health/high-risk-pools-for-health-coverage.aspx.
6 U.S. Department of Health and Human Services. “Pre-Existing Condition Insurance Plan.” PCIP.gov. Retrieved from https://www.pcip.gov.
7 Covered California. “Covered California’s Historic First Open Enrollment Finishes with Projections Exceeded; Agents, Counselors, Community Organizations and County Workers Credited as Reason for High Enrollment in California.” April 17, 2014. Retrieved from http://news.coveredca.com/2014/04/covered-californias-historic-first-open.html.
8 DiJulio, Bianca, et al. “Where are California’s Uninsured Now? Wave 2 of the Kaiser Family Foundation California Longitudinal Panel Survey.” The Henry J. Kaiser Family Foundation. July 30, 2014. Retrieved fromhttp://kff.org/health-reform/report/where-are-californias-uninsured-now-wave-2-of-the-kaiser-family-foundation-california-longitudinal-panel-survey/.