Health Care Reform

Older Man Sitting on Beach
What do I need to do?

What Plan should I take?

Highlights of Health Care Reform

  • For Individuals and Families
  • For Small Employers (1 to 50 employees)
  • For Large Employers (51+ employees)
  • For Medicare Recipients
  • For More Information

Group or Individual Plan?

  • For Large or Small Employers
  • For Consumers who do not work for an Employer (Self Employed,Unemployed, Retired, etc.)

Pro’s and Con’s

  • Group Plans – Advantages and Disadvantages
  • Individual Plans – Advantages and Disadvantages


What do I need to do?

Health_Care_Reform-1The good news is that the decisions on plan choices, i.e. HMO, PPO, etc. will become much simpler as a result of the introduction of standardized plans (Platinum, Gold, Silver and Bronze plans). These plans will be available inside and outside of the Exchange at the same rates. You may even qualify to receive a Federal subsidy to help pay the premium on plans inside of the Exchange. However, there are expected to be many more plan variations available outside of the Exchange than inside. Also, Individual Medical Underwriting has been eliminated, meaning that you will be accepted regardless of any pre-existing health conditions.

The bad news is that the former underwriting and approval complexity has been replaced by complicated decisions, such as: whether to accept an employer group plan, buy an individual plan, determine if you qualify for a subsidy and use the CA Health Exchange, etc. These are decisions that will require research and careful review. You will also be subject to verifications by the IRS, the Social Security Administration, credit bureaus and other entities to investigate your background and eligibility for subsidies.

(A) The first thing that you need to do is to get a good handle on your current health plan situation. By that I mean:

1) Who provides your health plan right now? Yourself, your employer, your union, your association, your parent, your spouse, your domestic partner, your own business, etc.

2) How rich is the coverage that you have right now? Is it the equivalent of a Platinum plan, Gold, Silver, Bronze, Catastrophic, or Mini-med plan?

3) How much do you have to contribute toward the premium? Does your employer deduct your portion of the premium from your paycheck before tax? Do you draw from an FSA (Flexible Spending Account) to pay for it? Do you pay for it out of your own pocket, after tax?

4) Do you have an HSA (Health Savings Account)? An HRA (Health Reimbursement Account)? Do you have or are you eligible for Medicare? Medicaid or MediCal? Veterans health benefits or TriCare? Are you over 65? Are you a foreign resident?

5) Are you making a change in status, like terminating from a job, retiring, aging out of a parent’s plan at age 26, getting married, getting a divorce, moving to another state, moving back into the state , or moving to another country, or moving back into the U.S., having a newborn, adopting a child?

6) What other options do you have access to? Cobra, HIPAA, Retiree plan, Spouse’s employer plan, Healthy San Francisco, Healthy Families, AIM, Medicare, MediCal, Medicaid, Tricare or Veterans plan?

What Plan should I take?

(B) Once you know the answers and know where you stand, then you can do the following:

1) Obtain comparison rates for plans inside the California Exchange (Covered California) and plans that are outside of the Exchange.

2) Use the online Subsidy Calculator on the Covered California website to estimate if you are eligible for any subsidy based on your income (AGI).

3) Obtain rates and benefit descriptions for all the other options that you have access to: i.e. Employer plan, Cobra, retiree plan, union plan, etc.

(C) With all of the above information, and ideally with the help of a knowledgeable agent or broker, you may then make a decision on the best plan for your situation.

(D) Once you have made a decision, the agent or broker may assist you in preparing and submitting your enrollment application, and possibly also your federal subsidy application.

Highlights of Health Care Reform

Due to the large number of regulations and sheer volume of information related to health care reform. I will give you brief summaries of the most important items, in bullet point fashion.

I have divided the items into 4 categories so that you only need to read the category that’s relevant to you.

You may choose to buy health plans either inside the California Exchange (Covered California) or outside. The only difference is that if you want either a subsidy or a tax credit, you have to choose an Exchange plan.

Your objective should be to:

1. Be insured.

2. Find the most affordable plan for your needs.

3. Qualify for a subsidy or tax credit, if you are eligible.

– For Individuals and Families

1. Major carriers participating in the Individual Exchange will be Anthem Blue Cross, Blue Shield, Health Net and Kaiser.

2. The guarantee-issue rule for individual health plans will go forward as planned on Jan. 1st. Individuals and Families may enroll between Oct. 1st 2013 and March 1st 2014. Enrollment effective dates will be Jan. 1st or later.

3. Starting on Oct. 1st, Individuals and Families may start choosing and applying for Individuals health plans within Covered California (the State Individual Exchange) or from plans available outside the Exchange. Plan choices within the Exchange are likely to be more limited than plan offerings outside of the Exchange. However, if one needs a federal subsidy based on their income, they may only apply for plans within the Exchange.

4. Agents who are certified by the Exchange may offer health plans both inside and outside of the Exchange, and may assist consumers in applying for subsidies.

5. Federal and Cal Cobra will continue to be offered to terminated employees.

– For Small Employers (1 to 50 employees)

1. Major carriers participating in the Group Exchange, aka SHOP, will be Blue Shield, Health Net and Kaiser.

2. Tax credit will be available to employer groups with low salaried employees.

3. Most insurance carriers allow existing groups to renew early in Nov. or Dec. of 2013 so that they will not be subject to the new Jan. 1st ACA-compliant plans and rates for another 12 months.

4. 2 employee groups consisting of only the owner and spouse will no longer be allowed.

5. 1099 employees will not be considered employees for group eligibility.

6. Employer groups in CA must have 51% or more of its employees in CA in order to qualify. Out of State employees may enroll in an Individual/Family plan in their own state.

7. Agents who are certified by the Exchange may offer health plans both inside and outside of the Small Group Exchange, known as SHOP.

8. Flex Spending Account Salary Deferral limit of $2500 for 2014.

9. Employer Model Notices requirement – On Oct. 1st or within 14 days of hire.

10. On 1/1/2016, Small Group will be defined as 1 to 100 employee companies.

– For Large Employers (51+ employees)

• The employer mandate to provide a minimum level of health insurance to employees, along with the associated penalties; have been delayed to Jan. 2015.

• On 1/1/2016 Large Group will be defined as 100+ employee companies.

– For Medicare Recipients

• ACA and the Exchanges are not expected to affect Medicare.

– For More Information:

Please go to the official website for the California Exchange, aka Covered California, at You will find:

• Summaries of Exchange plans that will be available.

• Sample rates for Exchange plans for your age in your zip code.

• A calculator to help give you some idea if you might qualify for a subsidy.

Group or Individual Plans?

Tough Decisions for Consumers, Employees and Small Business Owners

1. Small Business Employers

Should Small Business Employers (<50 employees) Disband their Group plans, and allow employees to buy their own private Individual Health plans either inside Covered California (the State’s Healthcare Exchange), or outside in the private marketplace?

2. Employees of Small or Large Businesses

Should Employees of Small Businesses enroll in their Employer’s Group Health plan, or try to apply for a subsidized plan from Covered California (the State’s Healthcare Exchange), or outside in the private marketplace?

Should Dependents (spouses and children) of Employees who work for Small Businesses enroll them in their Employer’s Group Health plan, or try to apply for a subsidized plan from Covered California (the State’s Healthcare Exchange), or outside in the private marketplace?

3. Consumers who do not work for an Employer (Self Employed, Unemployed, Retired, etc.)

Should you continue your current plan, buy an Individual plan from the Exchange or buy one from the outside marketplace?

To help you in your decision-making, I have outlined some Pro’s and Con’s of Group plans vs. Individual plans.

Pro’s and Con’s

Group Plans


• Premiums tax-deductible to business

• Employee share of premiums tax deductible to employees.

• Possible Tax Credit available to Businesses with low income employees.

• A good health benefit plan makes an Employer more attractive when competing for competent employees.

• Employers may choose plans either within or outside of the Exchange. (To qualify for a tax credit, they are limited to just the Exchange plans.)


• Employer’s time required to administer group plans.

• Employees cannot qualify for a tax subsidy if they are on an employer group plan.

• These plans are not portable for the employees if they terminate employment.

Individual Plans


• Employees may apply for a tax subsidy if they are eligible.

• Employees may choose plans either from inside or outside of the Exchange.

• These plans are fully portable.


• Premiums paid by the employees, are not tax deductible to the employees.

• If an employer reimburses the cost of individual premiums to employees, those contributions may not be deducted as a business expense.


Get every new post on this blog delivered to your Inbox.

Join other followers:

Contact us for the best healthcare insurance for individuals, families, business groups and seniors.

Lee Health Insurance Services | Healthcare Insurance Agency, Individual Health Insurance, Family Health Plans, Group Medical Insurance, Small Business Health Insurance, Whole & Term Life Insurance, Dental Insurance, Health Care Reform Assistance, Covered California Insurance Exchange Plans, Medicare Supplement Insurance, Medicare Advantage, Medigap Plans, Anthem Blue Cross, Kaiser Permanente, Blue Shield of CA, Health Net, Cigna, Aetna, Contra Costa County CA, Pleasant Hill, Danville, Concord, Berkeley, Martinez, Albany, Oakland, San Ramon, Alameda, Santa Clara, Campbell, Milpitas, Cupertino, Sunnyvale, Saratoga, Fremont, Palo Alto, Newark | 935 Moraga Road, Suite 240, Lafayette CA 94549 (925) 284-2000 or Toll-Free, (800) 286-7445