1 Covered California FACT SHEET Affordable insurance is a national priority In 2010, the federal government enacted the Patient Protection and Affordable Care Act, which aims to increase the number of Americans with insurance and cut the overall costs of health care. Getting California covered California was the first state in the nation to enact legislation under the Affordable Care Act. Covered California was created to develop an organized marketplace where legal residents of California can buy health coverage that cannot be denied or canceled if you are sick or have pre-existing health conditions. The new law created a number of ways to help reduce the cost of insurance and encourage uninsured people to get covered. The federal law is important to Californians because it provides financial assistance to help individuals and small business pay for health insurance. The law also requires that most people over the age of 18 have health insurance or pay a penalty starting in If you already have affordable health insurance, you don t need to take any action, unless your health coverage status changes. To help those without health insurance get covered, the Affordable Care Act also requires that the states either set up their own marketplace to offer health insurance or have one set up by the federal government. These marketplaces will provide an accessible place where you can compare health plans and buy health insurance that works best for you, your family and your budget. California chose to set up its own marketplace Covered California as your doorway to health coverage. As of 2014, about 2.6 million Californians will qualify for federal financial assistance and an additional 2.7 million who do not qualify for assistance but could benefit from guaranteed coverage through Covered California or another insurance company. An estimated 2.3 million California residents will enroll in a health plan through Covered California by All health plans purchased through Covered California must cover a range of services called Essential Health Benefits. These include services like doctor visits, hospitalization, emergency care, maternity care, pediatrics, prescriptions, medical tests, mental health care and others. Plans must cover preventive care services like mammograms and colonoscopies with no out-of-pocket cost to consumers. All newly sold health plans, whether offered by Covered California or in the public marketplace, will be required to meet these basic requirements.
2 A short history, an ambitious future As the first state in the nation to enact legislation under the Affordable Care Act, California has an important role to play in ensuring that Covered California is successful. Working together with federal, state and community partners, Covered California will ensure that millions of Californians have an equal opportunity to obtain affordable high-quality health care coverage. With more Californians covered, the state, our neighbors and our families will all be able to make healthy choices that benefit us all. A commitment to Californians Covered California is committed to ensuring that you are aware of your health coverage options and can easily compare health plans and choose the right one. We know that choosing health insurance can be confusing and we are here to help. We will be providing support services in person, by phone and online. We are training people in local communities across the state who will help you learn about the new health options available. These trained professionals will be able to offer help in many different languages. The health insurance marketplace Later this year, Covered California will open the marketplace and begin enrolling eligible Californians for health coverage that will begin January Legal residents of the state of California who do not have health insurance from their employer or another government program can purchase health insurance through Covered California. You will be able to buy the same highquality health insurance from Covered employees can learn about possibility Businesses with 25 or fewer full-time California that is available on the eligibility for tax credits. Starting in private market today. The advantage October 2015, Covered California will be of purchasing insurance from Covered open for larger employers with 100 or California is that you can easily compare fewer full-time equivalent employees. different plans. For the first time ever, you can make apples-to-apples comparisons across different health plans, thanks to a new ranking system. Also, Covered California is the only place where you can use tax credits or costsharing subsidies from government assistance programs to lower your health care costs. Covered California also will help small businesses provide affordable health coverage to their employees. Through Covered California, businesses with 50 or fewer full-time equivalent employees will be able to purchase health insurance.
3 Getting yourself and your family covered FACT SHEET Getting Californians covered Covered California will make it simple and more affordable for you and millions of other Californians to purchase high quality health insurance. Legal residents of California will be eligible to buy health coverage through a new, easy-to-use marketplace called Covered California. Covered California will offer private health plans at good values that cannot be canceled or denied for a pre-existing medical condition or illness. Covered California will offer online shopping and provide in-person and phone assistance for those who need it. Covered California s mission is to improve health care in our state by increasing the number of Californians with health insurance, improving the quality of health care for all of us, reducing health care costs and ensuring that California s diverse population has fair and equal access to quality health care. The new marketplace In a marketplace operated by Covered California, private companies will compete for your health insurance business. Covered California will be open for enrollment starting later this year for coverage that will begin in January Soon you will be able to buy the same high-quality health insurance that is sold today in the private market. When you visit Covered California s marketplace, you will be able to make apples-to-apples comparisons between different health plans and choose the plan that best meets the needs of you and your family. Also Covered California is the only place where you can use tax credits offered by the federal government to reduce the cost of health insurance. If you qualify for a tax credit, this money can be used immediately when you enroll to pay for insurance premiums. You can read more in the section below called Affordable Health Coverage. Improvements to insurance plans As part of the federal health care law, the Patient Protection and Affordable Care Act, all newly sold insurance plans must meet certain requirements. Insurance must cover Essential Health Benefits. All new health plans must cover essential health benefits such as doctor visits, hospitalization, emergency care, maternity, pediatric care for your kids and prescriptions, among other services. Insurance plans will be ranked for easy comparison. All new health plans will be rated based on the percentage of medical expenses paid by the plan and how much is left to the individual. There will be four basic levels of coverage: platinum, gold, silver and bronze. This ranking system will make it easy to compare plans in the same category or across categories. As the ratings go up, so does the monthly premium payment but your costs are lower when you receive medical care. You can choose to pay a higher monthly cost so that when you need medical care, you pay less. Or you can choose to pay a lower monthly cost so that when you need medical care, you pay more. You have the choice.
4 Affordable health coverage Many people know they need health insurance but are concerned about the price. To make sure health coverage is affordable, Covered California will help people find out if they qualify for federal financial assistance that will lower their costs. There are three financial assistance programs to help make sure everyone can afford health care. These programs are available to individuals and families who meet certain income requirements and do not have affordable health insurance with minimum coverage standards from an employer or another government program. 1. Tax credits: Tax credits are available to help lower the cost of your insurance premium, which is the amount you pay to buy health insurance, usually each month. When you enroll in a health plan through Covered California, tax credits can be immediately applied to the insurance premium, which reduces the amount you pay each month. 2. Cost-sharing subsidies: Cost-sharing subsidies reduce the amount of health care expenses an individual or family has to pay. These expenses might include copayments or other costs incurred when you receive medical care. 3. Medi-Cal assistance. Medi-Cal is free health coverage for those who qualify, including people with disabilities, and those with incomes of less than $15,000 for a single individual and $31,180 for a family of four. How government financial assistance works In the chart below, you can see how different people qualify for government assistance to get health insurance. These are examples only you may fall into a You are An individual making less than $15,415* An individual making $20,000* An individual making over $44,680* A family of four making less than $31,810* A family of four making $40,000 A family of four making $80,000* A family of four making over $92,200* You qualify for different category. The estimated cost to buy health insurance is designed to give you a general idea of the monthly cost to you. When you buy health insurance, the amount is likely to be different based on current rates and your particular situation. Medi-Cal, a free government program A tax credit of $2,304** that you can use to pay for your premium And, government subsidies so that you will pay less when you receive medical care You do not qualify for government subsidies or tax credits but you are still eligible to buy health insurance through Covered California. Medi-Cal, a free government program A tax credit of $4,140** that you can use to pay for your premium And, government subsidies so that you will pay less when you receive medical care A tax credit of $4,740** that you can use to pay for your premium You do not qualify for government subsidies or tax credits but you are still eligible to buy health insurance through Covered California. * Income levels are based on the year 2012 ** You must enroll through Covered California to be eligible for your tax credit Your estimated cost to buy health insurance No cost Your estimated premium cost is $1,060 per year, or $89 per month Your premium cost is estimated at about $3,408 per year, or $284 per month No cost Your premium cost is estimated at about $2,028 per year, or $169 per month Your premium cost is estimated at about $7,596 or $633 per month
5 Penalties if you do not have insurance The federal Affordable Care Act also requires most people over age 18 to have public or private health insurance by January 2014 or face financial penalties. The penalty phases in over three years and becomes increasingly child, in which case you would qualify severe. In 2014, the penalty will be for special enrollment. 1 percent of annual income or $95, Choosing health insurance is an whichever is greater. By 2016, the penalty important choice and Covered California will be 2.5 percent of income or $695. is here to help. Part of our mission To make sure you are covered in 2014, is to reach out to your community you must enroll in health insurance by partnering with people on a local before March 31, The next openenrollment period begins in October your community right now to help level. We are training local people in 2014 for coverage in You cannot you learn about the new options for enroll at any time except during openenrollment periods unless you have a of opportunities for you to get help in health insurance. There will be plenty life changing event such as the loss of person, by phone or online. a job, death of a spouse or birth of a If you need coverage before 2014 If you do not currently have health coverage, you do not have to wait until Covered California opens to get covered. You may be able to purchase private insurance for yourself by contacting an insurance company directly or working with an agent. You may be eligible right now for health coverage under Medi-Cal. For more information, you can contact the Department of Health Care Services. If you have been turned down by health insurance companies because of a pre existing medical condition, you could be eligible for coverage through a temporary, state-run program. More information about that program is available by contacting the California Pre-Existing Condition Insurance Plan. If your income changes Any eligible Californian without insurance can shop through Covered California for coverage, regardless of income. Your income level helps determine your eligibility for Medi Cal coverage or a financial assistance program, such as a tax credit, to help pay your health care costs. If your income changes over the year, your tax credit will be adjusted accordingly. If your income increases, you will have to pay the difference at tax time. It will be important that you keep on top of any income changes so you have an idea of how much you will owe at tax time. If you have Medi-Cal coverage and your income increases to more than $15,415 a year for an individual or $31,810 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 tax credits to help pay the premiums. If you have not yet turned 26 years old and your parents have health insurance, you are now eligible for coverage under your parents plan. If you are over age 65 or have certain disabilities, you can receive coverage under Medicare. Later this year, Covered California will open its marketplace to provide all Californians the option to purchase affordable health insurance. For many, this will be their first opportunity to obtain high-quality coverage for themselves and their families. We believe more covered Californians is the key to ensuring the health and well-being of our state.
6 Small business FACT SHEET New options for health coverage The federal Patient Protection and Affordable Care Act was passed in 2010 to increase the number of Americans covered by insurance. With almost half of all Americans receiving their health insurance from their employers, you play an important role in fulfilling the goals of the Affordable Care Act. Most business owners recognize the competitive advantages of providing high-quality health insurance to their employees. Offering health coverage helps recruit and retain the best talent and keeps employees healthier, happier and more productive. The Affordable Care Act created a number of provisions to encourage more employers to cover their employees. Those provisions include making insurance more affordable and easier to purchase. To help small businesses gain greater access to new health plan options, Covered California will open a new health insurance marketplace later this year. Small businesses will have unprecedented access to a range of health plan choices, including group plans you might think are offered only to large companies. Covered California s small business health options program Covered California is developing a marketplace specifically designed for small businesses with 50 or fewer full-time equivalent employees. This marketplace will make it easier to compare a variety of qualified, competing health plans from private insurance companies. Through Covered California, small businesses will be able to offer multiple plans to their employees, something that few small employers have been able to do easily until now. For businesses with 50 or fewer fulltime equivalent employees, Covered California is scheduled to conduct open enrollment later this year for coverage that will begin on January 1, In 2015, Covered California will begin offering health plans to employers with 100 or fewer full-time equivalent employees. You can enroll in health plans offered by Covered California throughout the year. Unlike the individual marketplace, there is no designated open-enrollment period, giving you the option to either enroll according to your policy s renewal date or whenever you choose.
7 Tax credits for small businesses As a small business owner, you may qualify for a tax credit to help offset your contribution to your employees premium payment. There are two phases of tax credits. Starting in 2010 and lasting through tax year 2013, there is a tax credit for businesses with 25 or fewer full-time equivalent employees who are paid an average annual salary of less than $50,000 a year. During this first phase, qualifying employers can receive a tax credit of up to 35 percent of premium expenses (24 percent for nonprofits). Starting in 2014, the maximum tax credit increases to 50 percent (35 percent for nonprofits) and is available for a total of two consecutive years. Generally, businesses with fewer than 10 full-time equivalent employees and wages averaging less than $25,000 a year will qualify for the highest credits. To qualify for any tax credit, employers must pay at least 50 percent of employee premium costs. To learn more about tax credits, please consult our Tax Credits for Small Businesses Fact Sheet, which is also available at Examples of small business receiving tax credit Beauty Shop with 10 Employees Restaurant with 40 Part-Time Employees Business Main Street Hair Downtown Café Employees Wages 10 full-time equivalent employees $250,000 total, or an average of $25,000 per employee 40 half-time employees (equivalent to 20 full-time workers) $500,000 total, an average of $25,000 per full-time equivalent worker Employee Health Insurance Cost $70,000 $240, Tax Credit $24,500 (35%) $28,000 (35% credit) 2014 Tax Credit $35,000 (50%) $40,000 (50% credit) Advantages of employer-sponsored health plans Employer-sponsored health insurance is valuable for a number of reasons. People who are insured are protected against uncertain and high medical expenses. They are more likely to receive needed and appropriate health care. Health insurance also improves health outcomes and lowers mortality, so employees with health insurance are more likely to be productive workers. Many small businesses choose to offer health insurance as an additional benefit to attract employees. It is an attractive option to offer because of the favorable tax treatment to both employer and employee. For these reasons and others, many small employers already offer health coverage. Employers with 50 or more full-time equivalent employees that do not offer affordable insurance or offer coverage that does not meet minimum standards will be subject to penalties starting in January Businesses with fewer than 50 full-time equivalent employees that do not provide health coverage will not face a penalty but will have new options that make providing insurance to employees even more attractive.
8 Health plans for your employees Your employees will have access to a range of health plans based on the decisions you make and the criteria you establish. One of the decisions you will make is the level of coverage, or how much a health plan will cover for medical expenses. To help you make that determination, all health plans starting in 2014 will be classified into one of four categories: bronze, silver, gold and platinum. The rankings are designed so that as the category increases in value, so does the percent of medical expenses that a health plan will cover. This means that the platinum-level plans will cover the highest percentage of health care expenses incurred at the time of medical Simplified solutions, greater choice Covered California will help you provide affordable insurance to your employees and make it easy to manage. Easy comparisons. Covered California lets you easily compare and contrast a variety of health plans offered by private insurers that will be rated and underwritten by a new set of consumer-friendly rules. Everything you need is available online, by phone or in person. Expanded and affordable choices. Covered California levels the playing field by giving you access to more plans that are part of an insurance pool made up of all small businesses in California, offering many of the advantages of largebusiness insurance pools. Those advantages include purchasing power, lower costs, reduced premiums and more health plan choices. Covered California also will provide expert counsel to help small businesses identify the plans that work best for them and be a resource for private insurance agents. Predictive costs. Regardless of which plans your employees choose, your costs will remain constant because you control the amount of your contribution. Your employees might choose a higher-cost or higher-coverage plan, but your costs will stay the same, giving you a highly predictive health insurance budget. Simple administration. Covered California will make it easy to transfer payment to health plans. Even if your employees choose different plans, you will only need to issue a single payment. Covered California will distribute the payment accordingly. We are also making it easy for you to keep working with your current insurance agent, who is welcome to provide counsel and enrollment support just as in the past. If you aren t working with an agent, Covered California can also provide expert advice. Employer control. You will be able to decide whether and when to participate in Covered California. You will be able to choose the level of coverage, the amount of your contribution toward your employees coverage and any amount you may want to contribute to family or dependent care. Once you make these decisions, your employees then choose the plan that best meets their needs. care. The health plans that cover the greatest percentage of health care expenses also usually have higher premium payments. You can choose a plan with a higher premium but lower costs at the time of medical care. Or you can choose a plan with a lower premium but higher costs at the time of medical care. These new rankings allow you to easily compare different plans within each category. Plans will be available through Covered California that provide coverage for employees dependents although these will cost more. You can decide to contribute toward such a plan, or you can encourage your employees to contact Covered California to buy individual coverage for their family members. There are many new and exciting health coverage options for small businesses. Covered California can help you discover the right ones for you and your employees. There are many new and exciting health coverage options for small businesses. Covered California s Small Business Health Options Program can help you discover the right ones for you and your employees.