May 30, 2013
On May 23, 2013, the State of California health insurance marketplace, known as Covered California, announced its 2014 health care plan offerings and preliminary rates for the individual market.
Following the passage of the Patient Protection and Affordable Care Act ("Affordable Care Act"), California became the first state in the union to pass legislation creating a state-facilitated health benefit exchange to allow residents and small employers (i.e., those with less than 50 employees) access to purchase health coverage. The health plan coverage and rate information set forth below pertains solely to the individual market. Covered California will announce is health care offerings for small employers in June.
Covered California estimates that at over $2.3 million Californian's will enroll in a health plan through the Exchange by 2017. Open enrollment for health coverage that will begin January 1, 2014 is set for October 1 of this year.
Thirteen (13) health plans in total were selected by Covered California. Each meets the state and federal requirements for health care coverage, as well as additional standards established by Covered California. The plans all will include the ten service categories comprising the essential health benefits*and other consumer protections required under the Affordable Care Act. These 13 plans are as follows:
The health plans will be offered in a tiered format with a choice of plans within each tier. Each tier is based on the level of coverage the individual would pay as a patient compared to what the plan pays. The tiers are referred to as the "metal levels" (A bronze plan would be 60% paid by the plan; a silver plan, 70%; a gold plan, 80%; and a platinum plan, 90%).
At total of 19 Rating Regions were established, in which premiums for similar health care coverage could be differentiated. The following is a listing by Rating Region of the insurance companies that will be offering plans in each of the Rating Regions. As indicated by this schedule, not all plans will available in every Rating Region. In the more heavily populated areas of the State, individuals will have as many as six (6) plans to choose from. Fewer plans will be offered in the rural areas of the State; however, each Rating Region will still have a minimum of three plans being offered.
For further information regarding the plan options available to your employees, please refer to the booklet entitled, "Covered California Health Plans & Rates for 2014", available at http://www.coveredca.com/news/index.html
Rates will vary by region, by metal level, and age.
For example, in Rating Region 18 (Orange County), a 40-year old single individual with earnings at 200% of the poverty level** who doesn't qualify for a federal subsidy (e.g., he/she is offered affordable health insurance through his employer) elects a silver plan through Covered California. The individual may be required to pay a monthly premium of between $252 and $332 (depending on the silver plan option selected). If eligible for a subsidy, however, the individual's monthly premiums could be reduced by $165 per month to between $87 and $167. Exact rates within each region are based on age, family size and income.
Note: The rates released on May 23, 2013 and reflected in the documentation released by Covered California are preliminary only. The rates must still be submitted to the applicable state regulator, which is required to assess the rates for reasonableness. It is anticipated that they will be certified as final by July 1, 2013.
For further information regarding the rates available to your employees, please refer to the booklet entitled, "Covered California Health Plans & Rates for 2014", available at http://www.coveredca.com/news/index.html
This information may be especially helpful to employers in assessing their design options for 2014 by comparing their plan options to those offered through Covered California to determine the likelihood of employees or specific employee groups choosing to enroll in the exchange in lieu of the employer plan. If an employer has a significant number of part-time employees, Covered California may be a viable option for them (irrespective of whether they are currently eligible for coverage under the employer plan). In addition, this will better prepare employers to respond to the onslaught of questions that are anticipated as more and more employees become informed of opportunities available to them through Covered California as open enrollment approaches.
*These service categories include ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, behavioral health treatment, prescription drugs, rehabilitative and habilitation services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services, including dental and vision care.
**In 2012, the federal poverty level for an individual was $11,490 per year, which at 200 percent would equal $22,980.
For More Information
For more information about this ACA Pathways or about any other health care reform-related provisions, please contact your Burnham Benefits consultant or Burnham Benefits at:
This ACA Pathways is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.
The information contained in this ACA Pathways includes emerging health care news from a limited perspective and does not encompass all views. The information was selected from a wide range of sources selected on the basis of their potential impact on employers and/or their employee benefit plans. For more information, please contact Burnham Benefits.