Healthcare Reform

The employer mandate applies to to businesses with 50 or more FTE employees. A business may have to pay a per-employee, per-month fee called the Employer Shared Responsibility Payment if the business:

• Does not offer coverage (to at least 95 percent of FTE employees) that complies with specified reforms under the Affordable Care Act.
• Does not offer coverage that meets minimum value of 60 percent of the essential benefits of the ACA.
• Does not offer coverage that is affordable. (The employee’s premium is more than 9.66 percent of that employee’s annual household income).

The penalty applies when an employee who is not offered coverage purchases health insurance on an exchange and receives a federal subsidy to help pay for that coverage. The penalty is assessed monthly and is equal to the number of FTE employees (minus the first 30) multiplied by one-twelfth of $2,000.

If a business offers coverage, but that coverage does not meet minimum-value and affordability requirements, the penalty is triggered when an employee rejects offered coverage and purchases health insurance on an exchange and receives a federal subsidy to help pay for that coverage. The payment is assessed monthly and is the lesser of: one-twelfth of $3,000 per FTE employee receiving federal subsidies through the exchange, or one-twelfth of $2,000 per full-time employee (minus the first 30).

• No pre-existing clause. Insurance companies can no longer increase rates or deny coverage because of a pre-existing condition.
• Dependents up to age 26 may be added to an insurance policy for both individuals and employer coverage.
• Gender is no longer a factor in determining rates.
• Renewal rates are the same as new business rates.
• Waiting period should not exceed 90 days.

To be in compliance with the new healthcare reform laws and avoid costly penalties, you must purchase Insurance coverage that pays at least 60% of the costs of the following “essential benefits:”
-Ambulatory patient services
-Emergency services
-Hospitalization
-Maternity and newborn care
-Prescription Drugs
-Mental health and Substance Abuse disorder services
-Rehabilitative and habilitative services and devices
-Pediatric services, including oral and vision care
-Preventive and wellness services, and chronic disease management

In 2020, there will be a new state subsidy program that will help Individuals lower the cost of health insurance for low and middle-income Californians.  Previously, those who made above 400% of the federal poverty line (FPL) were not eligible for premium tax credits. In 2020, those who make between 400 to 600% of the FPL will newly be eligible for subsidies. This means that a family of four with an annual income of around $150,000 per year will be eligible for subsidies.

Small businesses who purchase their health insurance through Covered California for Small Business may also be eligible for tax credits which are applied as a discount on monthly insurance premiums.

To see if you are eligible for a tax credit (premium subsidy), please click the appropriate button below.

Individuals under 65 seeking an individual health insurance policy must purchase their insurance during the annual open enrollment period which runs each year from November 1st through December 15th.  If you do not purchase qualifying coverage during this period, you may be charged a tax penalty for non-compliance of California’s healthcare laws and you may have to wait until the next annual open enrollment to obtain health insurance if you miss the deadline.

However, there are some instances one may qualify to enroll for health insurance outside of the normal open enrollment period.  You can still sign up for health insurance after the deadline if you meet any of the following qualifying events:

• change in legal marital status
• a change in the number of dependants
• a change in place of residence and the current carrier is not available
• significant cost or coverage change
• a change in coverage of a spouse or dependant
• a COBRA qualifying event
• legal judgements, decrees and orders
• entitlement to Medicare or Medicaid