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Open Enrollment Period.  Beginning on November 1, 2015, Californians who do not currently have health insurance can enroll for coverage through Covered California, the California health insurance exchange established under the Affordable Care Act (aka, ObamaCare). The open enrollment period continues through January 31, 2016. If you do not sign up during the open enrollment period, you will not be able to purchase health insurance through Covered California until the next open enrollment period beginning in November of 2016, and, as a result, you will not be eligible to receive financial assistance under ObamaCare to help pay your insurance premiums and you may be subject to tax penalties. However there are two exceptions to this rule: first, you may enroll through Covered California (and obtain financial assistance) at any time that a life changing event occurs, such as marriage, child birth, or re-location; and second, if you qualify for Medi-Cal, you may apply for coverage at any time.

Covered California estimates that approximately 2 million Californians are presently uninsured and would qualify either for Covered California or Medi-Cal. It is making a major effort to reach out to this group and urge them to obtain coverage. 

(Note: This blog entry is addressed to those Californians who have not obtained health coverage through Covered California. For those individuals and families who already have such coverage, the open enrollment period (November 1, 2015-January 31, 2016) is also significant. During this time you may renew or change your coverage. I will post a blog soon discussing why it is important for this group to review its current coverage by shopping around for a better deal).

Tax Penalties. Unless your income falls below a certain level, you are required under ObamaCare to have health insurance. Perhaps you have coverage through your employer, but if you do not, then you are responsible for obtaining insurance. You may do so by directly contacting any qualified health insurer in California. However, if you want to take advantage of financial assistance provided under ObamaCare, you must purchase coverage from one of the qualified plans (provided by private insurance companies) offered through Covered California. (More on the financial assistance program below). If you fail to obtain health insurance coverage for 2016 you will be assessed a tax penalty when you file your 2016 tax return in early 2017. The penalties for non compliance are gradually being increased. In 2016 the tax penalty will be the greater of 2.5 percent of your yearly household income (above the tax filing threshold) and approximately $695 per person (but with a maximum of approximately $2,085 for a family of four). 

Financial Assistance. The tax penalty is the stick. The carrot is financial assistance available under ObamaCare for many eligible applicants. Of those presently insured through Covered California, approximately 90 percent receive financial assistance. More than one-half of those presently insured pay monthly premiums of less than $100, and 350,000 customers pay less than $50 per month in premiums. (But keep in mind that there are other out of pocket costs, including co-pays, co-insurance charges and deductibles). The amount of financial assistance you are eligible for depends upon your age, annual income and number of dependents. 

As an example of the impact of financial assistance (the figures used here are approximate), if you are a single (no dependents), 40-year old person, earning about two times the Federal Poverty Level ($23,450) you will be eligible for a subsidy of approximately $290 per month. If you live in San Mateo County (where I live) and are willing to purchase the second least expensive Silver tier policy offered by the lowest cost provider in that market, you would pay (after the subsidy) a monthly premium of $91. If you purchased the second least expensive silver tier policy offered by the highest cost provider in San Mateo, you would pay a monthly premium of $182.

Research conducted by Covered California indicates the 36 percent of uninsured Californians are unaware that financial subsidies are available. A greater percentage are familiar with the tax penalties. 

Bottom Line. If you are currently uninsured, please think carefully about your options. Avoid the tax penalty, take advantage of the financial assistance available to you, and secure the peace of mind that comes with having quality health care coverage for you and your family. You can obtain further information on the various policies available to you, the types of coverage available, premiums in your pricing region, and the level of financial assistance for which you qualify, on the Covered California website. Or, you can call or email me. I am a qualified Covered California agent and can help you select the coverage, carrier and policy that is best suited to your needs -- at no cost to you. But remember, you must act during the open enrollment period.

Alex Pfeifer
Pfeifer Insurance Brokers
650 762-8087
alex@pfeiferins.com

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