Posted By: CFP&WM On: Aug 29th, 2013 In: Insurance/risk mitigation Money Matters

California Health Care Change 2014

With the full implementation of the Affordable Care Act (ObamaCare) taking place on January 1, 2014, everyone with individual health coverage should be aware there of the 3 options that you will have starting very soon.

Having 3 options reminds me of the game show “Let’s Make a Deal”. The host gives the participants 3 choices of what is behind Door # 1, Door # 2 and Door # 3. Let’s take a peek at what’s behind the health care doors starting very soon.

Door #1: Keep your current plan

The 1st option is to keep your current coverage. Your current individual insurance may likely be modified in order to become compliant with the new health law effective January 1, 2014. It is important that you review the modifications to your plan and the new premium associated with those changes.

Do not ignore notifications mailed to you by your insurance carrier. Bring them to the attention of your health insurance agent for a review on how these changes affect you and the premium you pay.

If you do not have an agent that can do this for you, consult a local agent who represents many carriers, such as Pam Fugitt-Herick in Santa Cruz at 831-423-8542 or Leesa Fons in the Sacramento area at 916-797-0555. Having a local agent is preferable to working with the company directly and does not cost any more.

Door #2: The California Health Exchange – Individual Health Insurance Marketplace

The 2nd option is obtaining coverage via the new Health Insurance Marketplace.

Step 1: Individuals should go to The Exchange displays all available plan options within the 4 different levels of coverage. All plans will be guaranteed issue and there are no “pre-existing” condition restrictions. They are also portable meaning the policy is not tied to your employment.

The choices can be complex and I again recommend you use an experienced local agent. They can advise you on the health plans and compare them to options behind Doors #1 and #3.

Step 2: You could complete an application online on your own, use a non-licensed “assistor” to help you with the forms completion, (“assistor’s” cannot recommend options for you) or have a local licensed agent assist you in your choice. You may be eligible for tax credits based on your income.

Step 3: Individual Health Insurance Marketplace bills you for your portion of the premium (i.e. the total premium minus tax credit) and the Marketplace forwards payment to the carrier.

Door #3: New plans available outside the Individual Health Insurance Marketplace

Outside the Exchange, insurance carriers may have the same health plans offered in the Exchange, plus additional options. Some carriers are not electing to participate in the Exchange so their offerings will be available here.

  1. Options outside the Exchange will not qualify for a tax credit/premium subsidy.
  2. Options outside the Exchange may exist that do not exist inside the Exchange.
  3. Individuals that do not meet the income requirements to receive a subsidy are especially advised to review these options.
  4. Using a licensed agent, at no cost to you, to access these options and help you see the potential value if any as compared to your current (Door #1) options, and your options within the exchange (Door #2).

Plans Available in the Health Insurance Marketplaces

All individual plans sold on the Individual Health Insurance Marketplaces (IHIM) must meet the federal ACA definition of a Qualified Health Plan (QHP). The plans will be offered by level of coverage for essential health benefits (EHB), to allow consumers to compare plans on an “apples to apples” basis.

Similar to the 3 Olympic medals, there are different levels of plan performance. The 4 metal levels are: Bronze plans which pays 60%, Silver plans pay 70%, Gold plans pay 80%, and Platinum plans pay 90%. Each State is expected to release plan details by the late summer of 2013.


Percentage of expenses paid by health plan

Percentage expenses paid by individual













Health Insurance Marketplaces – Enrollment Periods

The plans offered through the IHIM will be guaranteed issue. You cannot be denied because of pre-existing conditions. But, there’s a catch in that consumers can only enroll in guaranteed issue health insurance during designated enrollment periods.

  • • Initial enrollment period, October 1, 2013–March 31, 2014
  • • Annual enrollment periods, October 15–September 7
  • • Special enrollment periods, after a triggering event

A triggering event allows for enrollment after the event takes place outside of the enrollment periods. Individuals can enroll in or change from one plan to another as a result of the following triggering events:

  • • Loss of minimum essential coverage.
  • • Marriage, birth, adoption, or placement for adoption.
  • • Gaining citizenship or national status.
  • • Gaining access to new qualified plans as a result of a permanent move.
  • • A qualified individuals enrollment or non-enrollment in the plan is unintentional, inadvertent, or erroneous and is the result of the error, misrepresentation, or inaction of an officer, employee, or agent of the Health Insurance Marketplace or HHS, or its instrumentalities as it evaluated and determined by the Health Insurance Exchanges.

Health Insurance – Tax Credits

Tax credits will be available for households earning up to 400% of the Federal Poverty Line (FPL). The key fact is that individuals can only access the premium tax credits through the Individual Health Insurance Marketplace. Here are the 2013 FPL guidelines by household size and the premium range after federal tax credits:

Household size 100% of FPL 400% of FPL Premium Cap Range

































Remember that the prices for insurance plans in or out of the Exchange are the same whether you enroll on your own online, use a non-licensed “assistor”, or a licensed health care agent who can provide assistance to you year-round and not just at the time of the application.

If you do not currently have a broker who is advising you on this most important change, I recommend you consult with Pam Fugitt-Herick in Santa Cruz at 831-423-8542 or Leesa Fons in the Sacramento area at 916-797-0555.

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