What Types of Offered Health Insurance Coverage Will Disqualify You From Receiving A Subsidy Through Covered California?

Posted: August 27, 2014

by Wendy Barnett

You may have heard on the news or talked to a family member or friend who is receiving assistance in paying their health insurance premiums. This may have gotten you thinking, “Hey, I could use some help paying for my health insurance!” All of us could use help with this growing annual expense, referred to by many as a second mortgage payment. Not a fun thing to even think about. 

But the truth of the matter is, not everyone qualifies for a government subsidy, also known as a Tax Credit.  Aha you say,   “I knew there was a catch.” But before you leave mid-stream, remember that there are still many people that do qualify for a tax credit who have not claimed it yet. So, keep reading to understand whether that includes you or not.

There are some health coverage plans such as a group policy offered by an employer, a student health plan or a government plan that limit your options to receiving tax credits and some that do not; so it’s important to know what type of insurance you’re offered so that you know if you’re eligible for assistance in paying for your health insurance.

For certain types of health coverage options, just the fact that you are eligible, disqualifies you from receiving a tax credit (or subsidy), even if you choose not to enroll.  These plans include:

• Employer sponsored coverage (that is affordable and provides minimum value standard)
• Most Medi-Cal Coverage, including Medi-Cal for children program or CHIP
• Medicare, with Part A coverage that does NOT require you to pay a premium

In other words, if you are eligible for health benefits through your employer or through Medi-Cal or have Medicare Part A for free, then this is the “help” you are eligible to receive, and you do not have the option to receive assistance on Covered California.

For other types of coverage, you have the option to enroll in either your offered plan or a Covered California Exchange plan with a tax credit (or subsidy).  These plans include:

• Retiree health coverage offered by a former employer
• COBRA coverage
• Student health plan coverage
• Medicare Part A that requires you to pay the premium
• Veteran’s coverage
• Coverage under certain Tricare programs, including: Continued Health Care Benefit Program, Retired Reserve, Young Adult and Reserve Select
• State high-risk pool plan (e.g., Major Risk Medical Insurance Program or MRMIP)

The important thing to remember is if you want to enroll in a Covered California plan, you must do it during open enrollment or a special enrollment period.  You may qualify to enroll during  the special enrollment period if your offered benefits end or have been exhausted and you decide to not re-enroll. (Please note that opting to not pay for your health insurance benefits that are offered to you does not qualify you for a special enrollment.) This special enrollment period will only last 60 days from the day your coverage ends, so make sure you apply in time.

Call us and we would be happy to hear your story and help you navigate your way. For quotes, and health insurance advice call 1-877-752-4737.