Many components of the Health Care reform Act have already been enacted but full implementation, including the Ca. Health Insurance Exchange will begin January 2014. The exchange will be known as Covered Ca for individuals purchasing their own benefits and SHOP (small business health options program) for employers with 2-50 employees. Health insurance both in and out of the exchange will be available to consumers without regard to health questions. Rates can only be increased due to geography, and age, which allows for a maximum ratio of 3 to 1. In other words if a 22 year olds premium is $200 monthly the maximum premium for the same plan for a 64 year old will be $600. In the current marketplace the ratio can be more than 5 to 1. This means that young peoples premiums will be artificially higher and older folks will enjoy a lower premium.
- The Health Reform act encourages employees and employers to have benefits by employing both a carrot and stick approach. For employers with more than 50 employees who don’t offer benefits there will be a potential penalty of $2,000 per employee. The word is potential because the employer will only be penalized if an employee receives a subsidy (advanced premium tax credit). Subsidizes will only be available by purchasing a policy through the exchange. The Advanced Premium Tax Credit will be between 90% and 6% depending on the participant’s income: Medi-Cal eligibility will be going up from 100% of the FPL (federal poverty level) to 133%. ($14,570 for a single $22,050 for a family). The bulk of the tax credits will be for those who earn less than 250% of the FPL. In addition to the subsidies to help pay your premium cost sharing subsidies to reduce your deductible and copayments will be available for single people who earn less than $27,936 or $57,636 for a family of four in 2012 which is about 250% of the FPL.
If the employer of over 50 employees offers benefits to the employees that are “unaffordable”, which is defined as being more than 9.5% of the employee’s income than they can be penalized $3,000. Employers with less than 50 employees don’t have to offer benefits, but the SHOP will offer tax credits for those who employ less than 25. The full tax credit of 50% will only be available for those who employ less than 10 with the average employee wages under $25,000. There will be a variety of carriers participating with various plans and provider networks. Most likely the carrier’s provider network within the exchange will be skinner. Every carrier will have 4 metals: bronze, silver, gold & platinum. The most popular metals with the most options will probably be the Silver as this is the only metal for those who qualify for the benefit subsidies and the Bronze as this will be the least expensive portfolio. Every plan that is offered in the exchange will be offered out of the exchange. Some industry insiders have said that the unsubsidized plans within the exchange will probably be about 50% more than today’s least expensive plans. In Ca. the increase will probably be less since the average health insurance premium is among the least in the nation. The penalty for individuals to forgo coverage is the greater of 1% of their AGI or $95 for the first year and 2% or $395 the second year. The open enrollment period to conform to the new law and purchase benefits whether that be in/out of the CA.
Exchange is as follows:
- October 1st – December 15th for a January effective
- December 16th – January 15th for a February effective
- January 16th – February 15th for a March effective
- February 16th – March 31st for an April effective date.
Unless there is a qualifying event such as loosing employer based coverage one must enroll within the open enrollment window. The CA Health Insurance Exchange and Health Reform is about to take full force. Having an experience agent that can help you navigate the waters & determine whether you should purchase benefits in or out of the CA exchange is more important now than ever. BenefitPackages.com, an agency that has helped consumers for more than twenty-five years.