Covered California highlights major health insurance changes
SACRAMENTO, Calif. — With the new year right around the corner, Covered California is reminding consumers and small businesses about important changes that will take place in 2016.
“There are big changes taking effect in 2016 that will affect thousands of small businesses and millions of consumers,” said Covered California Executive Director Peter V. Lee. “Covered California consumers have reason to celebrate as we enter the new year, and we want to make sure that everyone knows how to get the right coverage at the best price. Those insured with us will have new and improved benefits with their coverage and ways to be sure they get the care they need and deserve.”
Starting Jan. 1, Covered California will be increasing access to plans and providers, as well as giving consumers more health plans to choose from and improving the number of benefits that are not subject to a deductible.
What follow are some of the major changes taking effect in 2016. Some affect the 1.3 million insured through Covered California, while others will benefit all Californians.
Most California Consumers to Get New Forms for 2015 Tax Year
- This year, for the first time, consumers who are insured through their employer or a government-sponsored program, like Medi-Cal, will receive a Form 1095-B or Form 1095-C. The forms show who maintained minimum essential coverage and is therefore not liable for the individual shared responsibility payment, or tax penalty. Consumers insured through Covered California will continue to receive a Form 1095-A, which details when they had coverage and is used to file their federal taxes. For more information on the 1095 tax forms and how to use them when filing your taxes, visit https://www.irs.gov/Affordable-Care-Act/Questions-and-Answers-about-Health-Care-Information-Forms-for-Individuals.
The Penalty for Not Buying Affordable Insurance Is Going Up — A Lot
- The penalty, which is payable to the Internal Revenue Service by individuals who go without insurance when they could afford to buy it, will increase for 2016 to at least $695 per adult and $347.50 per child under the age of 18 or 2.5 percent of household income, whichever is greater. A recent study by the Henry J. Kaiser Family Foundation (http://kff.org/health-reform/issue-brief/the-cost-of-the-individual-mandate-penalty-for-the-remaining-uninsured) estimated that the average household penalty in 2016 would be $969, which is a 47 percent increase from the average estimated penalty of $661 in 2015. For more information on the penalty, and to calculate what they may owe, consumers can visit www.taxpayeradvocate.irs.gov/estimator/isrp.
New Requirements and New Options for Many of California’s Small Businesses
- Employers with more than 50 full-time-equivalent (FTE) employees will be required to offer health insurance to their employees or pay a penalty. Through 2015, this requirement applied only to businesses with more than 100 employees. Additionally, any of these employers with an employee who does not take their offer of coverage will have to pay a penalty if that employee goes on to receive financial assistance to purchase coverage through Covered California. For more information on the requirement that employers must offer coverage, visit https://www.irs.gov/Affordable-Care-Act/Employers/ACA-Information-Center-for-Applicable-Large-Employers-ALEs.
- Covered California for Small Business will expand beyond the current ceiling of 50 employees to serve companies employing 100 or fewer FTE employees. Through Covered California for Small Business, employers have more control over their costs, with increased flexibility, by being able to offer their employees multiple carriers across multiple metal tiers, or coverage levels. Covered California for Small Business also relieves employers of the administrative burden by handling much of the payment distribution to health plans across multiple carriers and metal tiers. For more information on Covered California for Small Business, visit www.CoveredCA.com/ForSmallBusiness.
Major Improvements in Choice, Access and Benefits for Consumers with Covered California Coverage
Covered California used its power as an “active purchaser” to hold rate changes down for a second consecutive year. Prior to the Patient Protection and Affordable Care Act, consumers regularly experienced double-digit increases to their health insurance premiums. For 2016, Covered California successfully negotiated a weighted average change of 4 percent, which is lower than last year’s change of 4.2 percent.
In addition, nearly 90 percent of Covered California enrollees receive some measure of financial assistance to help them pay for their premiums. On average, those subsidies resulted in more than $5,200 for each household in 2014.
Other benefits for the 2016 coverage year:
- The majority of Bronze plan consumers will now get three office visits a year to a primary care provider or specialist that will no longer be subject to a deductible. Other needed services, such as lab tests and rehabilitation, will also no longer be subject to a deductible.
- Covered California’s Silver plan will be simplified by combining copay and coinsurance into a single product. Every doctor visit, lab test and prescription will not be subject to a deductible in this single product. Consumers with chronic conditions will be protected by a cap on specialty drugs. The vast majority of consumers will see their specialty drugs capped at $250 per month, per prescription. Plus, because of Covered California’s standard benefit design, the caps must be offered by every health insurance plan in the individual market as well as by all plans offered by the exchange. For more information, visit http://news.CoveredCA.com/2015/05/covered-california-board-protects.html.
- Adult dental coverage is now offered as an “add-on” to the health coverage consumers purchase through the exchange. Pediatric dental benefits for members under 19 years of age continue to be included with all Covered California health insurance plans.
- Thanks to the addition of two new health insurance companies — UnitedHealthcare Benefits Plan of California and Oscar Health Plan of
California — and the expansions of Blue Shield of California and Health Net, 99.6 percent of Covered California consumers will be able to choose from at least three health insurance companies.
- More than 90 percent of hospitals (“general acute centers” as designated by the California Office of Statewide Health Planning and Development) in California will be available through at least one health insurance company, and 74 percent will be available through three or more companies.
Medi-Cal Coverage for Undocumented Children Starting in May 2016
- Medi-Cal will be expanded to all children regardless of their immigration status. The new law goes into effect in May 2016. Please contact the California Department of Health Care Services for more information.
Health Care Improvements for All Californians
There will also be several improvements to California’s health care system that benefit all Californians, not just Covered California enrollees.
- Starting July 1, 2016, California state law will require health plans to publish and maintain printed and online provider directories and will set requirements that health plans must meet to maintain accurate provider directories, including routine updates. For more information, visit http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160SB137.
- A new state law will require health plans and insurers to implement formulary tier requirements and cost-sharing caps similar to products offered through Covered California. Assembly Bill 339 also requires plans and insurers to have formularies that do not discourage the enrollment of individuals with certain health conditions, and sets requirements regarding access to in-network retail pharmacies, standardized formularies, and coverage for certain single-tablet HIV and AIDS treatments. For more information, visit http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB339.
Open enrollment in the individual market runs through Jan. 31. Consumers can enroll online by visiting www.CoveredCA.com, or they can get in-person enrollment assistance by visiting www.CoveredCA.com/get-help/local to find the nearest certified enroller. Enrollment assistance is free, confidential and available in a variety of languages. Consumers can also enroll over the phone by reaching Covered California at (800) 300-1506, between 8 a.m. and 8 p.m. on weekdays and from 8 a.m. to 6 p.m. on Saturdays.
Once open enrollment ends, consumers can enroll in Covered California if they experience a qualifying life event. The most common qualifying life events are getting married, having or adopting a child, losing your health care coverage or moving. For more information on special enrollment through Covered California, visit http://hbex.CoveredCA.com/toolkit/PDFs-Collateral/SEP-Fact-Sheet_English-(customizable).pdf.
Enrollment into Medi-Cal or into Covered California for Small Business occurs year-round.