Do I Qualify For A Health Subsidy?

This is single-handedly the most important question that a Californian can ask Jan 1st, 2014 and after. It could mean the difference of $1000's dollars in health insurance premium per year. There are a few key requirements but we'll look at the three big ones that will dictate whether most people will qualify for a subsidy or not. It's estimated that approximately 50% of Californian's are eligible so many people can expect to gain this benefit. Let's get started...how do you know if you qualify?

Step 1 - Group health insurance offering and the subsidy

(If you are not offered group health coverage through your employer, spouse's employer, or parent's employer, please continue to Step 2)

This step gets a little tricky but we'll try to simplify it as much as possible. Feel free to call us at 800-320-6269 regarding your situation.

If you are offered group health insurance from your employer or through a spouse/domestic partner/parent and the coverage is affordable (definition below) to the employee only (not considering dependent costs) and the coverage is of a minimum value (bronze level of health benefits), you may not be eligible for a subsidy. You just have to be offered the coverage. Choosing to decline coverage does not affect your eligibility. All companies are required to send out notification as to whether they are offering affordable coverage of a minimum value but expect some confusion on this front...it's very complicated. Let's break down the two main points.

Is the group coverage affordable?

Here's the rule...does your employee-only share of the second lowest priced, MV plan offered by the company (not necessarily the one you're on) exceed 9.5% of your gross income. Again, remember that they do not look at dependent cost...only employee costs. Furthermore, if the employee only premium is shown to be affordable (under 9.5%), the dependents will likely not be able to qualify for a subsidy. It's a big issue in the structure of the bill but HHS has verified this interpretation.

Is the plan of Minimum Value?

This gets even trickier. All the new Metallic group plans will be Minimum Value by law (at least Bronze level). Many companies will opt for an early renewal (called grandmothering) so they can keep old plans and rates. Not all the carriers have certified if their 2013 plans are MV and the worksheet used to run the calculation is just short of rocket science. So what should you do?

Look to your company or their broker to provide you with the Notification for existing employees and shortly after hiring for new employees. If you do not have group coverage or if your offered coverage coverage does not provide an affordable (your employee only premium is less than 9.5% of gross income) MV option, continue on to see if you meet the next big requirement.

Step 2 - Income basis for subsidy eligibility

There is an income basis to qualify for a California health subsidy. You need to make between 138% and 400% of the Federal Poverty Level. The amounts are based on your best estimate of this year's personal Modified Adjusted Gross Income (total household).

If you make under 138% of the FPL, Medi-Cal will be available to you at no charge. If you are eligible for Medi-Cal, you will not be able to get a subsidy towards one of the Metallic plans.

Considerations in taking the Subsidy

The upside is $1000's of dollars to offset health insurance premium. Are there downsides? There are two issues both tied to the same situation. Some people have Grandfathered plans, plans which were started and not changed materially since 3/22/2010. These plans are not affected by the new requirements. They may have lower rates (than un-subsidized plans) but more importantly, they may have much larger doctor networks. The new Exchange networks are about 2/3rds the size of the old PPO networks (which Grandfathered plans use). If doctor/hospital choice is critical to you, make sure to first check the new networks if you have a Grandfathered plan. Non-grandfathered plans automatically had to move to the new plans either way.

These are main requirements aside from general citizenship, resident requirements. Please feel free to email below or call us with your particular situation since so much money is at stake with the subsidies.

It's confusing...let us do the work for you. Call us at 800-320-6269 and we can quickly find your tax credit in 10 minutes.

We'll try to find the maximum subsidy available at no cost to you.

You can run your Covered California Plan 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!