Understanding Your Health Insurance Options

By In Dance

December 1, 2013, PUBLISHED BY IN DANCE

From the first hints of reforms to the nation’s health care system several years ago to the opening of the “statewide exchanges” this past October, the Affordable Care Act (ACA) has been a BIG topic. That any change to health care is so deeply personal—especially if your body is your tool for expression and your means of income—makes the topic all the more charged, and it’s (hopefully positive) impact all the more meaningful. But, politics aside, its passage and implementation can be confusing to navigate.

At Dancers’ Group, we have spent the past few months holding several free workshops about California’s statewide exchange, Covered California™, and gathering and sifting through information. This article presents some “what if…” questions that we noticed come up often when artists are beginning to learn about what Covered California is and how its coverage and payment structure works.

If you…. have insurance through an employer. Can you switch?
If your current insurance is “affordable,” you don’t have to do anything at all. But, if you are paying more than 9.5% of your household income toward insurance premiums, then you may be able to drop that plan and go through Covered California to obtain cheaper insurance independently of your job. If your employer covers your health care, but does not offer coverage for your partner and/or children, they are certainly able to get health care through Covered California.

If you…. plan to secure insurance for the first time, and are worried about the cost.
For you, this will be a new expense to add to the many other monthly expenses. That being said, the state of California is leading the way in terms of subsidies to underwrite the cost of insurance for individuals and families with lower incomes.

The Covered California website has a useful calculator tool, “Shop and Compare,” where you input basic personal data (age, zip code, income), and you are then shown an array of insurance plan options and pricing, including any subsidies you qualify for. Through this tool, you are able to shop around and research your options before going through the process of submitting an application. Subsidy options may include:

1.    Premium assistance, which is applied to your monthly insurance premium, reducing the amount you pay. In dollar terms, this would be available to an individual making up to $45,960 and a family of four earning up to $94,200.
2.    Cost-sharing subsidies reduce the amount of out-of-pocket health care expenses, like co-pays. When looking at the plan options using the “Shop and Compare” tool, you’ll know that you’re eligible for cost-sharing if you see the word “Enhanced” in front of the plan name (i.e. Enhanced Silver).
3.    Medi-Cal: Starting in 2014, the state of California is planning to expand the Medicaid program (called Medi-Cal in California) to cover people under age 65, people with disabilities, an individual with an income of less than $15,856 or a family of four with income less than $32,499. The coverage is free for those who qualify.

As you’re exploring the available plans in the “Shop and Compare” area of the Covered California website, you’ll notice that there are fours pricing levels for individual insurance plans: Bronze, Silver, Gold and Platinum. Bronze and Silver plans have higher deductibles but lower monthly payments. Gold and Platinum plans are more expensive each month, but have lower deductibles. Certain subsidies are only available to you with a Bronze or Silver plan, which you can see on the “payment details” screen for each plan. No matter what level plan you choose from, you will get the same standard of care and the same access to doctors.

If you….have income that is hard to predict or that tends to vary from year to year or month to month.
The application for Covered California requires that you enter your “annual income.” They are asking for an estimation of your total income. For many dancers or choreographers, your annual income can be difficult to predict, because of working project to project, juggling multiple part time jobs, or not yet knowing how much grant funding will come through.
Ultimately, your income will be verified with your completed 2014 tax returns, which you will file in 2015. If you received a subsidy on your insurance, the IRS will check as to whether your actual income kept you within the range for that subsidy (a bit like tax brackets). If you ended up making substantially more or less than your estimation, you pay or receive money back for the difference with your taxes.

If partway through the year, you are in a position to know that your income has changed—for example, if you land that well-paying dream dance job—you can call a Covered California agent. You can then adjust your payments for the rest of the year. The same would work if you started earning less.

If you…. currently have health care through Healthy San Francisco.
If you have Healthy SF, someone will likely have already contacted you to talk through your options. Depending on your income, you will now either qualify for free health care through MediCal, or you will get new insurance through Covered California. Healthy SF will still exist, since it will provide coverage to undocumented immigrants, but the majority of people will be required to transition to a plan with more comprehensive coverage.

If you…. have children.
Not much changes about applying for, or receiving subsidies through, Covered California. When using the “Shop and Compare” tool as well as when you formally apply for coverage, you will enter the number of people in your household based on who is included in your tax return, as well as the age of your dependent(s) and/or spouse. The plans and pricing that you can select from will be for your whole family.

If you…. lose your insurance or choose to leave your job.
Health insurance plans typically have “enrollment periods,” and Covered California is no different. In essence, this means that you have a several month window each year to “enroll” for a health plan, and if you miss signing up during that window, you have to wait until the next one.

But, there are exceptions for this, namely big life changes that impact your prior insurance coverage. For example, if you leave your job partway through the year to focus on performing as a freelancer (foregoing your employer-paid health coverage), or if you go through a divorce and your insurance had been through your ex. In instances like these, you have a 90-window to enroll outside of the annual “enrollment period.”

If you…. own or manage a small business or organization.
Whether you operate a for-profit business, are fiscally sponsored or a larger 501(c)(3) organization doesn’t matter in the eyes of Covered California. The determination of what they qualify as a “small business” is having at least one employee besides the owner, and fewer than 50.

An employee is someone who receives a W-2 tax form, and the employer pays payroll tax for him/her. If this is you, you are not required to provide insurance to your employees, but may find that the subsidies and tax breaks available to you make it worthwhile. If you are sending people 1099 tax forms each year that means that you do not have “employees,” but rather “independent contractors.” Those people will need to buy insurance independently.

If you are a small business and want to either begin covering your employees’ health insurance or to switch to less expensive coverage through Covered California, we’d recommend you contact a representative to help you determine the best options for you.

If you…. are over the age of 65.
If you’re over 65, you qualify for Medicare, which is managed quite separately from Covered California. Anyone with Medicare can purchase supplemental health insurance through Covered California, but you will not be eligible for subsidies.

Outside of Covered California, the Affordable Care Act will impact Medicare. If you’re in the Part D coverage gap known as the “doughnut hole,” you will receive a 50% discount on brand name drugs. And, by 2020 the doughnut hole will be phased out entirely. Also, certain preventive screenings will now be free. These include: blood pressure, cholesterol and diabetes testing, certain cancer screenings (including colorectal, breast and cervical cancers), osteoporosis screenings, vaccines and immunizations, flu and pneumonia shots, HIV and STD testing, and counseling on healthy lifestyle changes.

If you…choose to remain uninsured.
The Affordable Care Act includes what’s known as the “individual mandate,” which means that everyone is required to have health insurance of some kind, whether it’s through your employer, purchased directly through an insurance company, obtained through the Covered California exchange, or via Medi-Cal or Medicare. The penalty for being uninsured is a fee, which is taken through the IRS when you file your taxes. In 2014, an individual will face a penalty of $95 or 1%
of your annual income, whichever is greater. Each year thereafter, the fee will increase, until it is essentially what it would cost to pay for health insurance. For example, by 2016 (in two years), the penalty will increase to $695 per adult or 2.5% of your income.

If you…. are not a US citizen.
Only legal residents of California will be eligible to purchase health insurance through Covered California. If you are not a legal resident and reside in San Francisco, you can still get health care through Healthy SF.

*  *  *
Remember that “enrollment period” mentioned earlier? This year, you have until March 31st to enroll in Covered California. Every year after that, you have from October 15-December 7  to enroll or renew your coverage.

Glossary of Covered California and Health Insurance Terms

Covered California™: A state agency created to help Californians who cannot find affordable health insurance through their job or a public program. To help insure people, it is a new health insurance marketplace where private insurance companies offer plans at affordable rates. You can use this marketplace to compare insurance companies, and find the plan that’s right for you.

Co-pay or Copayment: What you pay each time you go to the doctor, or visit the emergency room. These costs are a lot lower when you have health insurance than when you don’t.

Deductible: The total amount you pay each year for health care services before your insurance starts to pay. The deductible will be different for each health insurance plan. Many preventive health care services do not cost you anything. Any health plan from Covered California will pay for services like vaccinations, cancer screenings and preventive care for infants, children and adolescents at no cost to you.

Essential Health Benefits:
According to the Affordable Care Act, essential health benefits consist of 10 categories that must be covered by all health insurance plans offered through an exchange. These categories are: Ambulatory patient services; Emergency services; Hospitalization; Maternity and newborn care; Mental health and substance abuse disorder services; 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.

Enhanced Benefits: Covered California has created the “Enhanced Silver Option,” which can greatly cut your out-of-pocket costs. Enhanced Silver is a Silver health insurance plan in which copay costs for doctor visits, prescription drugs, and routine tests are reduced on a sliding scale, based on your income. Individuals who earn between $15,856 and $28,725 or a family of four earning between $32,499 and $58,875 may be eligible to enroll in the Enhanced Silver option.

Or Health Maintenance Organization is a type of insurance plan in which you can only go to doctors, other health care providers, or hospitals on the plan’s list except in an emergency. You often need to get a referral from your primary care doctor to see a specialist outside or within the insurance “network.” Kaiser Permanente is an example of
an HMO.

California’s Medicaid health care program, a public insurance program that pays for a variety of medical services for children and adults with limited income. In 2014, individuals who make less than $15,856 a year will qualify for Medi-Cal. A family of four that makes less than $32,499 will also now qualify. For more information about Medi-Cal, visit dhcs.ca.gov, or visit your local county social services office.

Out-of-pocket costs: Health care costs on top of your monthly premium costs. The most common out-of-pocket costs are deductibles, copayments and co-insurance. People who qualify for Enhanced Benefits can get help paying their out-of-pocket costs.

A preferred provider organization is a health plan that has contracts with a network of “preferred” providers from which you can choose. You do not need to select a Primary Care Physician and you do not need referrals to see other providers in the network. If you receive your care from a doctor in the preferred network you will only be responsible for your annual deductible (a feature of some PPOs) and a copayment for your visit. If you get health services from a doctor or hospital that is not in the preferred network (known as going “out-of-network”) you will pay a higher amount.

Premium assistance: When you receive premium assistance, the federal government pays a portion  of your insurance bill every month. Federal money is sent at the same time you pay your portion of the bill. You can only get premium assistance when you buy insurance through Covered California. Premium assistance is based on your income, and comes in the form of a tax credit from the federal government. If your income changes during the year, so will your amount of premium assistance. Individuals making between $15,856 and $45,960 or a family of four making between $32,499 and $94,200 may be eligible for premium assistance on a sliding scale.

As a final note: Dancers’ Group has no affiliation with Covered California, and this article likely hasn’t answered all of your questions, nor do we have all of the answers. Information from this article came from The Actors Fund (actorsfund.org) and CoveredCA.org, both are important resources for further information.

This article appeared in the December 2013 issue of In Dance.

In Dance is a publication of Dancers' Group.