Off Exchange Health Insurance

If you do not qualify for a Covered California subsidy, you will need to purchase an off exchange health insurance plan. If you qualify for a Covered California subsidy, you can purchase a plan through Covered California.

To qualify for an on exchange Covered California plan, you must earn less than $47,520 as an individual or are a family of four that earns less than $97,200 a year.

If you meet these criteria, then you will qualify for an on exchange, Covered California, plan 

Purchasing a plan through Covered California is considered an on exchange health insurance plan. Primarily because those on exchange plans will receive a tax credit from the government to help pay for your health insurance premiums. If you qualify for this tax credit, it can save you an immense amount of money. 

If you do not qualify for Covered California, then you will need to purchase an off-exchange health insurance policy. Since insurance companies make less profit off of on exchange health insurance plans, off exchange plans is where they seek to recoup their loses. Traditionally, individuals who fall outside of the Covered California assistance program will pay increased insurance premiums. Although you will not receive assistance from the government with an off-exchange health insurance plan, you will save a significant amount of time and stress avoiding the long and often faulty Covered California enrollment process.

Off exchange plans have faster enrollment processes and less headaches when it comes to annual enrollments or changes. So there are some positive outcomes when choosing an off exchange health insurance plan.

Enrolling for an off exchange health insurance plan through Covered California.

If you do not qualify for a Covered California subsidy then you should not enroll, register, or renew through Covered California. You will pay just as much money if you went through a broker and you will be subject to the constant delays with Covered California’s website and customer service. We have seen clients wait on the phone for hours just to make a small modification of their plan during open enrollment. 

92% of the 1.8 million people enrolled through Covered California actually receive the subsidy. Roughly 144,000 have enrolled through Covered California yet do not receive a subsidy. 

• Your family size
• The ages of the individuals on the plan
• Your home zip code

There can be numerous nuances within a zip-code in regards to health insurance. Since the implementation of Covered California, many health insurance companies will simply not offer any health insurance plans in a given zip-code. In addition to not offering health insurance in a specific zip-code, there can be issues with which type of insurance policies are accepted at local hospitals or which are accepted through the local primary care physicians. All of these factors are what dictates the cost of your insurance premium.

• Which health insurance policies does your family’s doctor’s office accept?
• Which health insurance policy does the ER accept closest to your, and your dependents, home accept?
• What prescription drugs does the plan cover?

The three questions above will drastically affect your current cost of living and current set up with your primary physician. If you chose a plan your doctor does not accept, then you will need to pick a new primary care physician. If you pick a plan that is not accepted at the local ER and you are seen there during an emergency you can pay a lot of money out of pocket. Then you couple potentially choosing a plan that does not cover your prescription and you have to pay out of pocket until next years open enrollment.

Make sure to thoroughly review these three questions before choosing your plan. 

• Names of all individuals and family members who will be on the plan.
• Birthdates of all individuals and family members who will be on the plan.
• Zip code of where the policy will be taking place.

October 15, 20– through January 31, 20–

Traditionally open enrollment for on exchange and off exchange health plans falls between the two dates above. Sometimes there have been extensions but make sure to plan on enrolling during the allotted time frame so you do not have to rely on an extension. If you are looking to enroll for a new plan before or after these dates then you will have to meet certain criteria a special open enrollment. 

To be eligible to enroll for special open enrollment, it is required that you apply for new insurance within 60 days of the following qualifying life events:

• Expiration of Cobra
• Employer no longer offers health benefits
• Marriage or Divorce
• Birth of a baby
• Adopting or Fostering a child
• Moving your residence
• Gaining citizenship
• Aging out of your parent’s plan

Unfortunately, you will not be able to enroll for a new health insurance plan until the following open enrollment period. In 2017, congress voted to remove the tax penalty for not having health insurance. If you find yourself in this situation, you can still purchase short term health insurance as stop gap coverage to cover any major issues like accidents and major sickness. 

Here at JBC Insurance Services, we are a 3rd generation insurance agency that specializes in simplifying the multistep consideration process outlined above. Feel free to connect with us so we can help guide you through this process to pick the best off exchange plan that fits you and your family’s needs.