The annual open enrollment period for individual health insurance plans will run from October 15th through January 15, 2020. (It will be extended to January 31, 2020 if Governor Newsom signs AB 1309.) This is your opportunity to purchase or change plans for the 2020 plan year. Please note, you may not purchase or change plans outside of open enrollment unless you have a qualifying event.
As you know, one of the main provisions of the Affordable Care Act (aka Obamacare) is the individual mandate which states that virtually all U.S. citizens and legal residents must carry a minimum level of health insurance or pay a penalty. The penalty was in effect for the 2014 – 2018 plan years but President Trump eliminated the penalty for 2019 and beyond. However, beginning in 2020, California will have its own individual mandate. Individuals who don’t carry a minimum level of health insurance in 2020 will pay a penalty when they file their 2020 state taxes. The penalty will be the greater of $695 per uninsured adult and $347 per uninsured child or 2.5% of your annual household income with the maximum penalty not exceeding the cost of a Bronze plan.
As always, you have two options when purchasing an individual health insurance policy. You may purchase a policy directly from the carrier or through our state exchange, Covered California. (We can help you either way.) The only reason to purchase a plan through Covered California is if you qualify for a tax credit which is based on income. In addition to the federal tax credits that are available to households making between 138% and 400% of the Federal Poverty Level, California will offer additional subsidies this year to households making between 200% and 600% of the Federal Poverty Level. That means you may qualify for the new state subsidy even if you haven’t qualified for a federal tax credit through Covered California in the past.
The new Program Eligibility by Federal Poverty Level chart for 2020 is attached. To give you an idea, a household of one making less than $74,940 – or a household of four making less than $154,500 – may qualify for a federal tax credit and/or a state subsidy. (By the way, they are both advanced tax credits intended to lower the monthly premium. The state is just using different terminology.) Just a reminder that if you are offered affordable coverage from your employer you do not qualify for a federal tax credit or state subsidy through Covered California. (And it’s the IRS who defines whether or not a plan is affordable.)
Please contact us at (916)467-4647 if we may be of service.