What is Covered California?

Covered California is the state's health insurance exchange.  It will make it simple and affordable for you to purchase high-quality health insurance and access financial assistance to pay for coverage. You can shop online, over the phone, or in person to find the right health care insurance option for you.   Through Covered California, different health insurance plans can be compared.  

Individuals can learn if they qualify for federal financial assistance that can lower the cost of health insurance.  They also will be able to find out if they are eligible for health programs like Medi-Cal
, California's Medicaid health care program. 

​Who can use Covered California to purchase insurance?

Legal residents of California may use Covered California.  Californians without access to affordable health insurance through their employer or another government program will be eligible to purchase health coverage through Covered California.

​The California Health Benefit Exchange is to operate both an Exchange for individuals and a Small Business Health Options Program or “SHOP” Exchange for small employers of 100 or fewer full time equivalent employees. 

When can I purchase coverage through Covered California?

Enrollment in health plans through Covered California will begin on November 1 and end on January 31. You must purchase health insurance during this open enrollment period or face penalties.

If you do not enroll during this period, you will not be assured a health plan - either through Covered California or in the private market. If you have a life-changing event such as the loss of a job, death of a spouse or birth of a child, you are eligible for special enrollment within 60 days of the event.


​How much will it cost to purchase health insurance through Covered California?

​The cost of health insurance depends on how much coverage you choose to purchase and whether you qualify for financial assistance like 
tax creditsTax credits will also be available to small businesses with no more than 25 full-time equivalent employees to help offset the cost of providing coverage. Covered California is the only place where you can use these tax credits to make insurance more affordable.  Many Californians who have lower incomes will also benefit from lower costs in whatever plan they choose. 


What kind of Help is available to lower the cost of insurance?

Individuals seeking health coverage will be provided financial help in three ways:
  1. Tax credits: Tax credits are available to lower 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. 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 out-of-pocket health care expenses an individual or family has to pay. These expenses might include the copayments (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. 
  3. Medi-Cal assistance: Medi-Cal is the state of California's expansion of the federal Medicaid program. It is designed to cover people under age 65, those with disabilities, with income of less than $16,000 for a single individual and $33,000 for a family of four. The coverage is free for those who qualify.
 

How are small businessed affected by Health Care Reform?

​Starting in 2016, a small business is defined as one with 100 or fewer full time equivalent employees (FTE). Employers with 50 or more FTEs are required by law to offer group health insurance coverage. 

The health reform law includes a number of provisions that reform the insurance market and encourage small businesses to offer health insurance.  Coverage offered in the small group market and in the exchanges established for small business to purchase insurance, must meet minimum benefit standards; allow premiums to vary only by age, tobacco use, and geographic location; be subject to reviews of premium increases; and comply with other consumer protections.
 
The provisions to encourage small firms to offer coverage apply only to firms under a certain size.

Fewer than 25 Employees: 
Beginning in 2010, business with fewer than 25 full time equivalents and average annual wages of less than $50,000 that pay at least half of the cost of health insurance for their employees are eligible for a tax credit. The full credit is available to employers with 10 or fewer employees and average annual wages of less than $25,000.  The credit phases-out as firm size and average wage increases. The credit is capped based on the average health insurance premium in the area where the small business is located.

The tax credit will be introduced in two phases. For tax years 2010 to 2013, eligible employers may receive a tax credit of up to 35% of the employer's contribution toward the employee’s health insurance premium. For tax years 2014 and later, eligible small businesses that purchase coverage through the state Exchange may receive a tax credit of up to 50% of the employer’s contribution toward the employee’s health insurance premium. Employers are eligible to take the tax credit for two years.   Tax-exempt small businesses meeting these requirements are eligible for tax credits of up to 25% of the employer’s contribution toward the employee’s health insurance premium for tax years 2010 to 2013, and up to 35% for tax years 2014 and later.

50+ Employees:  
Businesses with fewer than 50 employees are exempt from penalties faced by larger employers that do not offer coverage. The penalties for employers of 50 or more employees that do not offer health coverage is $2000 per head, after the 30th employee. 

Fewer than 100 Employees: 
Small businesses with fewer than 100 employees will be able to purchase coverage through Small Business Health Options Program (SHOP) Exchanges beginning in 2014. These state-based exchanges are intended to allow employers to shop for qualified coverage and more easily compare prices and benefits.  In 2017, states will have the option to allow businesses with more than 100 employees to purchase coverage through the SHOP Exchanges.
​ 

Do I have to buy Health Insurance?

​If you don't have health insurance, you should. Health insurance is an important way to make sure we have access to medical care when we need it. Starting in January 2014, most people will be required to have health insurance or pay a penalty if they don't.

Coverage may include employer-provided insurance, coverage someone buys on their own, Medicare or 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. You can get Medi-Cal as long as you meet the eligibility requirements..

The penalty phases in for three years and becomes increasingly more costly.  In 2014, the penalty will be 1 percent of annual income or $95, whichever is greater. By 2016, the penalty will be 2.5 percent of your annual income or $695. This means that if you do not have coverage in 2014, you will be required to pay a penalty when you file your taxes at the end of the year. 

Some people do not have to pay 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 2012,
    $9,750 for a single person and $27,100 for a married couple with two
    children)
  • People who qualify for religious exemptions
  • Undocumented immigrants
  • People who are incarcerated
  • Members of Native American tribes

There will be a penalty for those who are not covered and do not fall into one of these categories.