Individuals & Families
California’s Health Insurance Marketplace
Last updated October 2022
It can be overwhelming to find the right health plan for you and your family. Before you get started, it is important to understand your options.
Our staff at OnlyHealthInsurance is fully informed about health care reform. As insurance brokers we went through extensive training in preparation for the health care reform launch. We gained a great deal of experience from the first open enrollment period. Couple this with 30 years of working in the individual and family health insurance market in California, and we have become a leading expert and producer in this market.
The information below is a summary of some of the important aspects of the California insurance market. I hope you find it useful in your research.
Health Care Reform
Health care reform brought with it several changes to the healthcare system. Starting January 1, 2014, denying coverage or charging higher premiums to anyone with a pre-existing condition is prohibited. Other significant reforms have been implemented such as expanded preventive care services; dependent coverage until age 26, and removal of annual and lifetime coverage maximums. Carriers are also required to spend at least 80% of premium dollars directly on health care.
Two Ways to Enroll
California has two marketplaces or exchanges in which to obtain ACA-compliant health insurance, the Public Exchange or the Private Exchange.
Penalty For Not Carrying Coverage
Effective Jan. 1, 2020, and continuing in 2023, Californians must carry qualifying health insurance coverage throughout the year or be subject to a penalty.
While the individual mandate penalty was rescinded on the federal level for 2019, it was reinstated at the state level for 2020. Under the new state mandate, those without qualifying health insurance could face a financial penalty unless they qualify for an exemption. Generally speaking, a taxpayer who fails to secure coverage and is without a qualified exemption, will be subject to a penalty of $850 per adult and $425 per dependent child under 18, or 2.5 percent of household income, whichever is larger. Qualified coverage can be obtained from either the Public (CoveredCA) or Private marketplaces.
Covered California is the public marketplace or “on-exchange” and is where premium subsidies and cost sharing reduction assistance is available for those who qualify. Eligibility for assistance is based on ZIP code, household size and projected household income.
The American Rescue Plan
The American Rescue Plan (ARPA) was signed into law March 11, 2021 and remained in effect in 2022, provided funding so more people can afford health insurance and others can pay lower premiums. People who are currently uninsured, insured through CoveredCA, or insured directly with a carrier (private exchange), may benefit from this new expanded funding program. One must enroll through CoveredCA to be considered for government funding.
The Inflation Reduction Act
The recently passed Inflation Reduction Act (IRA) ensures that the ARPA’s subsidies continue without interruption for an additional three years, through 2025. Just like the ARPA, the enhanced subsidies in the Inflation Reduction Act reduces costs across the board by further lowering payments for people who were already eligible for subsidies under the original ACA subsidy structure and by extending subsidy eligibility to middle-income people by removing the upper income limit on subsidies.
This public marketplace is managed through the CoveredCA website, www.coveredca.com, where one can register, disclose required personal and financial information, compare plans, and enroll in coverage. Enrollment support is available from CoveredCA representatives, some insurance brokers, and registered navigators. To find out if you qualify for assistance, click here to use CoveredCA’s Shop and Compare tool. NOTE: If you do not qualify for assistance, but still enroll through CoveredCA, you may qualify for a subsidy if income changes and/or you meet new assistance guidelines.
The other marketplace is called the private market or “off exchange” market, where coverage can be obtained directly from an insurance carrier. There is no financial assistance available in this market. As a result, less information is required in the application, making the process much simpler. Also, some carriers offer only certain types of plans in the CoveredCA market, while others have chosen not to participate at all. The result is that more carrier choices and plan options are available in the private market in some areas. For those who don’t qualify for financial assistance and are not likely to in the coming year, or those who prefer not to enroll through CoveredCA, we recommend enrolling through the Private marketplace.
After careful consideration OnlyHealthInsurance has concluded that the best way we
can be of service to consumers is by offering plans through the Private Exchange.
How OnlyHealthInsurance Can Help
If you are considering individual or family health insurance, have decided to enroll in a private exchange plan, or are not sure what type of plan you’re eligible for, we hope you will contact us for assistance. After understanding your personal circumstances and health insurance needs, we can make an assessment and recommendation for the most appropriate solution. If it is determined that applying through CoveredCA is your best option, we will tell you, and refer you to CoveredCA or a registered representative.
If you have individual insurance that started on or before the Affordable Care Act was passed (March 23, 2010) and has stayed the same since, your plan is said to be “Grandfathered” and you may keep it indefinitely if you so choose. Grandfathered plans do not have to comply with all of the mandates outlined in the new healthcare reform law (ACA).
Note: Consider your options carefully before terminating or replacing a grandfathered plan. They offer some advantages over ACA reform plans (non-grandfathered) and once terminated you cannot get it back. Some grandfathered plans have experienced sizeable rate increases in recent years and carriers (Blue Shield and Anthem Blue Cross the most notable), have terminated some grandfathered contracts forcing people into the public or private marketplaces.
Eligibility for Insurance
Legal residents of California may be eligible to buy health coverage through CoveredCA and receive financial assistance. Those unlawfully present in CA may still qualify for some assistance. Legal residents of California are also eligible to buy health coverage through the private market exchange.
Each year there is an annual open enrollment period (AEP) when consumers can research, change, and enroll in a health plan for the following plan year. For the 2023 plan year, the open enrollment period runs from November 1, 2022 through January 31, 2023. To be eligible for a January 1, 2023 effective date, you must enroll no later than December 31, 2022.
If you have a life-changing event, such as the loss of a job, a move, a marriage or divorce, or the birth of a child, then you may qualify for “special enrollment” in either Covered California or the private marketplace. The special enrollment period runs 60 days before and 60 after the date of the life event. An application with supporting documentation of the life event must be submitted during this time period for successful enrollment. Insurance carriers may have additional rules and documentation requirements for enrollment so it’s important to check with your broker.
All individual health insurance plans offered through the health insurance marketplace cover a comprehensive set of benefits known as “essential health benefits.” All newly sold health insurance plans — whether sold through CoveredCA or in the private marketplace — will cover these services.
They include the following 10 categories:
- ambulatory patient services
- emergency services
- maternity and newborn care
- mental health and substance use disorder services, including behavioral health treatment
- prescription drugs
- rehabilitative and habilitative services and devices
- laboratory services
- preventive and wellness services and chronic disease management
- pediatric services, including oral and vision care
In addition to the essential health benefits, all health plans are offered with standard benefit designs so you can make apples-to-apples comparisons between plans.
Standard Benefit Designs
Plans must fall into four categories of coverage based on the overall percentage of cost-sharing of the plan: platinum level at 90%, gold level at 80%, silver level at 70%, and bronze level at 60%, as well as a catastrophic plan for individuals under 30 years old. Each category of plan must cover the essential benefits mentioned above, but with co-insurance, deductibles, and copays to correspond to the level of coverage. The private marketplace offers these same standard designs as well as other plan options that meet the benefit level cost sharing requirements. Click here to see the 2023 Standard Benefit Designs and Medical Cost Shares.