BIG CHANGES IN 2020 FOR COVERED CALIFORNIA – TAX CREDIT, PENALTIES, AND MORE
The seventh year of Covered California looks to be one with big changes.
Most of these changes are specific to California where the State enacted it’s own expansion of original ACA law.
We’ll cover the highlights so you can make the best decision as well as look at some of the basis to nagivate the Open Enrollment process (can be tricky).
We’ll look at these topics:
- 2020 Covered California tax credit expansion
- 2020 Covered California tax penalty
- 2020 Covered California Open Enrollment
- 2020 California health carrier changes
- How to Apply for 2020 Covered Ca Coverage
- What if you can’t afford the plans or miss Open Enrollment?
Let’s get started!
2020 Covered California Tax Credit Expansion
The biggest change for 2020 deals with the tax credit.
There’s a state-sponsored expansion of the tax credit in two ways.
- The income threshold for the cap is going up to 600% of the PFL
- The tax credit itself is going up across the board
Let’s look at each of these two.
First, the change in income threshold for 2020 tax credits in California.
The biggest issue we’ve had since 2014 is the drop-off.
If you’re income goes over the 400% level (see chart here) which was about $47K for an individual, the tax credit would go to zero.
Especially in California.
The “F” in FPL (Federal Poverty Level) is a nationwide standard.
Let’s just assume that it costs more to live in California than Iowa.
Don’t even mention LA or SF!
For that reason, income levels are much higher on average than in other States.
$47K is might be fine for a cutoff in Nevada but it’s not great in California.
This disproportionately hit Californians hard.
That cap has now gone from 400% of the FPL to 600% of the FPL.
Many more Californians will now qualify for a tax credit.
We really see this impact for older people where just being under the wire can result in 100’s of dollars a month!
Over the limit…nothing.
We see this all the time.
Worse yet is when you think you’ll be under and then at tax time, find out you’re just over and owe back $10K.
So…this expansion on the top income threshold is big deal.
Many people already enrolled may suddenly have a tax credit and many people not enrolled due to cost may find it now makes sense.
You can run your 2020 quote with the next tax credit starting 10/15 here:
Now, the second piece.
Increased 2020 tax credits
Let’s say you qualify for a tax credit now at $24K income estimate.
Starting in 2020, you can potentially qualify for more tax credit at that same income level
This SHOULD result in a lower monthly premium.
There may be situations (based on area, carrier, plan level, age, etc) where that doesn’t happen.
You really have to run the quote here to see how it all settles out.
In theory, everyone eligible for a tax credit should get more of one in 2020 comparing apples and apples.
As we get into the quoting and rates, we’ll see how that pans out but it should mean less out of pocket costs.
Interestingly, the other income caps such as medi-cal, CHIP, and enhanced Silver plans are the same.
This extra tax credit is on top of the ACA law will apply federally and will supposedly be paid for with a new State-based tax penalty for not having health insurance.
Let’s look at that piece now.
2020 Covered California Tax Penalty
The Federal ACA tax penalty went away in 2019.
In 2020, California will reinstate their own version of the penalty for not having qualified health insurance.
This penalty is listed as the greater of:
- $695 for each adult
- 2.5% of household income
Max penalty is $2100.
There’s a stipulation that this penalty may not apply if the cost of health insurance exceeds a certain percentage of income.
We can help with that calculation here.
As Certified Covered Ca agents, there’s ZERO cost for our assistance.
Since these numbers mirror the old Federal ACA penalty, we’re curious to see if it’s similar in other aspects:
- Waiver of penalty for short term 3 month lapse in coverage
- Other exemptions based on hardship, etc
- Health sharing exemption
We’ll see but we expect this patterned after the Federal rules.
Next up, Open Enrollment for 2020.
2020 Covered California Open Enrollment
So…when can we enroll and what are the rules for effective dates?
Currently, 2020 Covered Ca open enrollment will start October 15th and end Jan 15th, 2020.
There’s a chance that the State will expand the back-end of the open enrollment so check with us to see if it’s been expanded.
One note…the earliest effective date available will be 1/1 even if we enroll 10/15.
The main qualifying events that allows us to get an earlier effective date is one of the following:
Loss of qualified coverage (involuntarily)
Those are the most common.
Check with us regarding your situation and possible qualifying.
Loss of coverage can allow us to get the next 1st of the month.
The other qualifiers have the following rules:
- Enroll by the 15th, get the next 1st of the month
- Enroll after the 15th, get the 1st of the month following the next 1st
If you don’t have a qualifying event, 1/1 is the earliest date we can get (outside of medi-cal which is year around) but we have to enroll by 12/15.
The 15th of the month cutoff runs right through 2020 open enrollment.
If you enroll on the 1/15th, you would get 3/1 (outside of loss of coverage).
It’s all very confusing!
Get help for free! We’re licensed Covered Ca agents and we can help with of and off-exchange enrollment.
We have a simplified 2020 Covered Ca application available here.
2020 California Health Carrier Changes
The 2020 California health market is pretty stable.
In fact, Anthem Blue Cross will be re-entering a great part of the State after it left in 2019.
They pulled out of the southern 2/3rds of the State Jan of 2019.
You can check the full range of carriers and options here:
One note…the plans are standardized so a Silver plan will resemble another Silver plan from a different carrier.
The networks can be different of course as are the drug formularies (list of covered medications).
You can see both through the link quote above for any given plan or carrier.
How can you apply for a given plan?
Good news there!
How To Apply For 2020 Covered Ca Coverage
This is probably our biggest strength as Certified Covered Ca agents.
We put a great deal of time into creating a simplified online application available here:
Here’s the process.
We get the application securely and then go through to make sure there’s nothing that will mess up the enrollment.
Keep in mind that roughly ½ of the people we come across who self-enroll at the Covered Ca site have errors that can either generate no tax credit or generate too much which they have to pay back at tax time.
It’s incredibly confusing!
Let us guide you through this process especially regarding:
- Household make-up
- Income calculation
- Correct entry across multiple fields which can delay or prevent tax credits and enrollment
- Plan selection
Again, there’s no cost for our assistance at Certified Covered Ca agents.
What If You Can’t Afford The Plans Or Miss Open Enrollment?
This can be tricky.
If we’re past open enrollment (initially 1/15 cut off)
We don’t qualify for a special enrollment trigger
We’re not eligible for a medi-cal…
We may not be able to enroll in an ACA plan either on-exchange or off-exchange (direct with the carrier).
In that case, short term or catastrophic health sharing plans through AlieraCare may be our only option.
You can quote and enroll in those plans here:
Again, check with us first and we’ll see what you’re eligible for.
- We have enrolled 1000’s of people in Covered Ca since 2014
- We have 20+ years experience in California health insurance
- There’s no cost for our assistance.
We’re here to help!
You can run your 2020 Covered California health quote here to view rates and plans side by side from the major carriers…Free.
Again, there is absolutely no cost to you for our services. Call 800-320-6269 Today!