Is income based on individual income or household income?

Household income is used for determining eligibility for premium assistance and cost-sharing reductions.

Which tax year will the Marketplace use to determine household income?

The taxpayer’s actual household income for the taxable year will be used.  Marketplaces will use data from tax filings and Social Security data to verify household income information provided on the application, and in many cases, will also use current wage information that is available electronically.  If the data submitted as part of the application cannot be verified using IRS and SSA data, then the information is compared with wage information from employers provided by Equifax.  If Equifax does not substantiate the information on the application, the Marketplace will request an explanation or additional documentation to substantiate the applicant’s household income.

What if my income changes after I apply?

If information that you put on your application changes during the year, you must report it. Changes in things like address, family size and income can affect whether you qualify for Medi-Cal or qualify to get help paying for your health insurance through Covered California.

If you have Medi-Cal, you must report changes to your local county office within 10 days of the change. If you have health insurance through Covered California, you must report changes within 30 days.

What is the timeline for Covered CA to determine eligibility for premium assistance and cost sharing? Do they know immediately after entering information on the website?

The application processing times are as follows:

• Online and telephone applications that do not require resolution of any inconsistencies – Real-time, within minutes.
• Complete paper applications received by mail or fax and do not require resolution of any inconsistencies – 10 calendar days.

If an employer offers affordable and minimum value coverage to employees but does not contribute to the dependents’ premium (including the spouse), can the dependents still qualify for premium assistance and cost sharing reductions?

When dependent coverage is “offered” in an employer-sponsored plan (regardless of employer contribution to the dependent coverage) subsidy eligibility will be dependent on the affordability of the employee-only share of premium costs and if those costs exceed 9.5% of the employee’s household income.  Costs for dependent coverage are not part of the affordability calculation with respect to employer-sponsored coverage.  So if the employer’s offer of coverage is affordable according to this measure, neither the employee nor the dependents will be subsidy eligible.

Can an individual who qualifies for a cost-sharing subsidy move up to ‘gold’ or ‘platinum’ without losing the subsidy?

No, cost-sharing subsidies are only available to individuals enrolled in silver plans.

Please elaborate on the premium assistance. Do consumers pay the full premium and receive a monthly check or do consumers pay a lower premium each month?

Covered California uses the consumer-friendly term “premium assistance” in referring to the Advance Payment of the Premium Tax Credit (APTC).

Consumers who are eligible for premium assistance can choose when and how
they want to apply their premium assistance amount.

Consumers have the following options:

1. Taking the premium assistance in advance to lower the cost of monthly premiums;
2. Applying the premium assistance at the end of the year when filing taxes; or
3. Using some of the premium assistance in advance and receiving the balance at tax time.

Please explain cost sharing reductions.

Cost sharing reductions (CSR) help people with their out-of-pocket costs such as deductibles, coinsurance and copayments.  It is only available to people who enroll in in a silver plan.  The issuers provide the extra help with out-of-pocket costs by covering more of the costs of covered benefits, hence increasing the actuarial value of a silver plan.  As a result, the individual pays lower deductibles, coinsurance, and/or copayments.

There are three levels of savings available to people who qualify for a CSR.  The level of savings is based on the family’s income.  See table on page 18 in the Eligibility for Individuals and Families participant guide.

If an individual does not pay taxes does that mean they are not eligible for subsidies?

Applicants seeking premium assistance must intend to file taxes or be claimed as a tax dependent in the coverage year. However, if an individual’s household income is less than the applicable filing threshold, their income may be below 138% of the federal poverty line and therefore may be eligible for Medi-Cal.

What is Modified Adjusted Gross Income (MAGI)?

Gross income is total income minus certain exclusions (e.g. public assistance payments, employer contributions to health insurance payments). From gross income, adjusted gross income (AGI) is calculated to reflect a number of deductions, including trade and business deductions, losses from sale of property, and alimony payments. MAGI is defined as AGI plus certain foreign earned income and tax-exempt interest. For premium assistance purposes, the definition of MAGI will include non-taxable Social Security benefits.

See: http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf