GENERAL INFORMATION BULLETIN

Transcription

1 AFL-CIO California School Employees Association GENERAL INFORMATION BULLETIN March 15, 2013 General Information Bulletin No AFFORDABLE CARE ACT (ACA) QUESTION & ANSWER RESOURCE DOCUMENT Action for Chapter Presidents: please review the attached with your Executive Board and membership. A. SUBJECT MATTER The (ACA), President Obama s landmark health care bill, was signed into law in Different parts of ACA were scheduled to go into effect gradually. Several requirements took effect over the last two years and more have started this year. The law is expected to be fully implemented by A major goal of federal healthcare reform is to increase the number of people who can afford healthcare. As part of that, states were required to create healthcare exchanges, or pools of private insurers, that will provide consumers with options for purchasing their own affordable healthcare. The insurers who make up these pools are required to comply with cost and coverage guidelines set by the law. California s healthcare exchange, called Covered CA, is expected to be up and running by October. The open enrollment period for the exchange will be from October 2013 to January 2014 and coverage will begin on January 1, CSEA continues to be an advocate at the local, state and federal levels to ensure that its members get the best healthcare possible without sacrificing pay or other benefits. To that end, we have put together the attached question and answer resource on the ACA and its impact on school employees. Please visit CSEA s website at for updated information on this very important subject. CAUTION: This document is intended to provide only a brief and general summary of CSEA s current understanding of ACA and related regulations as of February It is not intended to provide specific legal or tax advice to individuals for their specific situation. Individuals may wish to consult with a tax advisor and/or legal counsel to determine how ACA affects their circumstances. The information contained in this document is subject to change as the federal and state agencies continue to issue additional regulations and publish additional guidance on ACA. (continued on next page)

2 GIB No March 15, 2013 B. REQUIRED ACTION By Chapter Presidents: For discussion with executive boards and general membership. By Regional Representatives and Labor Relations Representatives: For discussion at chapter meetings and regional presidents meetings. CALIFORNIA SCHOOL EMPLOYEES ASSOCIATION Dave Low Executive Director DL:JB:rc:shea Attachment: (ACA) Question & Answer Resource DISTRIBUTION: (For Action) Chapter Presidents, Regional Representatives and Labor Relations Representatives (For Distribution) Board of Directors; Alternate Area Directors; Assistant Regional Representatives; Chairpersons & Members, Standing Committees; Political Action Coordinators; Regional Communications Officers; Chapter Communications Officers; Retiree Unit Executive Board; Life Members & Honor Roll Recipients; All Staff PREVIOUS BULLETIN INFORMATION: GIB 16 13, dated 03/15/13, and titled, Collective Bargaining Notifications to Employers was given general distribution. California School Employees Association 2045 Lundy Avenue San Jose, CA (408) (800)

3 CALIFORNIA SCHOOL EMPLOYEES ASSOCIATION (ACA) This Affordability Care Act (ACA Obama Care) resource has been developed in a Frequently Ask Question (FAQ) format to provide CSEA members and staff with an overview of the ACA and how it may affect individual CSEA members and CSEA Chapters. This ACA FAQ resource has been reviewed by the CSEA Legal Department, the CSEA Field Operations Department, the CSEA Governmental Relations Department and the CSEA Member Benefits Department for accuracy and relevance to our members and staff. There is no doubt the ACA is complex and confusing. To make it even more complicated and unclear, the federal government and California officials are still working on the final rules and regulations on how the ACA will work. This ACA FAQ resource is based on CSEA s understanding of the ACA as of February Some of the information contained in this ACA FAQ resource may change, as the federal government and California officials issue the final rules and regulations for the ACA. CSEA will make every attempt to update this document on a regular basis as the federal government and California officials issue the final rules for the ACA. Once the California Exchange (Covered CA) is operational, CSEA will provide resources to help individual union members access Covered CA to determine how the ACA might affect them and their families. CSEA will also have resources and training available for CSEA member leaders and staff to help chapters address challenges presented by the ACA at the bargaining table. CSEA is working diligently to insure that our members and staff are prepared for the implementation of the ACA. If you have any questions, contact your CSEA Labor Relations Representative or your CSEA Field Office. Note: Throughout the document you will notice the terms district and Employer used interchangeably. For CSEA s purposes your school or college district and the term employer are synonymous.

4 Page 2 of 13 California School Employees Association ACA Frequently Asked Questions 1) How will the (ACA) affect me? It depends on each individual s circumstances. However, ACA does have the following major requirements that everyone should be aware of that could affect them: Individual Mandate: All individuals must obtain the minimum essential health coverage or pay a tax beginning in 2014 that increases in phases to This is called the individual mandate. Health Care Coverage Requirements: A variety of coverage qualifies as minimum essential coverage and satisfies the individual mandate. Specifically, the following health coverage satisfies the individual mandate requirement: Employer-sponsored health coverage; Health coverage purchased through Covered CA; Health coverage purchased through the individual health care market beginning in 2014; and Health coverage obtained through public programs like Medicare, Veteran s Benefits and Medi-Cal. Unaffordable or inadequate coverage: Coverage is unaffordable if the cost for self-only coverage is more than 9.5% of an employee's household income. Coverage is considered inadequate if the plan covers less than 60% of the allowable costs under the plan. Employees who only have access to unaffordable or inadequate self-only health coverage may purchase health coverage through Covered CA and depending on income could qualify for federal subsidies to help pay premium and other out-of-pocket costs. They could also qualify for an exemption to the individual mandate. ACA provides that coverage is affordable if the employee does not have to pay more than 9.5% of household income in order to receive employee-only coverage. The reference to household income raised concerns from employers who do not have access to information about the employee s household income. To address this concern, new IRS proposed regulations provide three safe harbors. The safe harbors allow employers to determine household income in one of three ways: (1) the employees current W-2 wages from the employer; (2) the employee s current monthly rate of pay, which is the monthly salary for a salaried employee and the hourly rate of pay X 130 for an hourly employee; or (3) the federal poverty level for a single individual. An employer may choose to use one or more of these safe harbors for all or any reasonable category of employees as long as they are used on a uniform and consistent basis for all employees in a category. Coverage will be considered affordable if the coverage is otherwise adequate and the employee portion of the employee-only premium for the employer s lowest cost coverage option does not exceed 9.5% of the safe harbor household income substitute selected by the employer. For purposes of the premium tax credit, an employee will be considered to have access to affordable employer-sponsored coverage (and therefore would not qualify for a premium tax credit) if the employee has to pay less than 9.5% of their household income for employee-only coverage.

5 Page 3 of 13 The Exchange (Covered CA): ACA provides for the creation of state-based health care exchanges, where individuals can purchase health coverage for themselves and their families. California s Exchange has been renamed Covered CA. It includes an online market place where people can go to comparison shop for health coverage and costs. It is expected to be fully functional by January 1, 2014 and will begin pre-enrolling eligible people by October 1, When Covered CA is operational, people can contact them online, by phone or in person. It is the only place where federal subsidies will be available to help eligible people pay for their premiums. Covered CA will also screen people who are eligible for Medi-Cal and will make sure they are referred to the appropriate staff to help them apply for that program. Covered CA is in the process of selecting its health plans, but all plans will have to meet the essential health benefits requirement. Essential Health Benefits: ACA requires health plans offered in the individual and small group markets inside and outside of Covered CA to provide the following Essential Health Benefits: 1) Ambulatory patient services; 2) Emergency services; 3) Hospitalization; 4) Maternity and newborn care; 5) Mental health and substance use disorder services; 6) Prescription drugs; 7) Rehabilitative and habilitative services; 8) Lab services; 9) Preventative and wellness services and chronic disease management; and 10) Pediatric services, including oral and vision care. Selffunded and large group insured plans are not subject to the essential health benefit requirement. Expansion of public programs: ACA allows states to expand their Medicaid program and to make it easier for people to enroll. In California, the Medicaid program is called Medi-Cal. The Governor and the Legislature are working on proposals to expand the Medi-Cal program to single adults under the age of 65 earning up to 138 percent of the federal poverty level ($15,414 for an individual, 2012). If the legislation is passed and signed into law, those meeting the eligibility requirements will be able to enroll in Medi-Cal. More than two million people will qualify. Tax Penalties: Individuals who do not have health coverage beginning in 2014 will have to pay a tax, unless they are exempted. The annual tax is the greater of a flat dollar amount or percentage of income as outlined below: 1% of taxable income or $95 per adult, plus $47.50 per child in % of taxable income or $325 per adult, plus $ per child in % of taxable income or $695 per adult, plus $ per child in 2016 and beyond Families pay a maximum of three times the adult flat dollar amount, unless the percentage of income amount is greater and they would pay that amount. The penalty is calculated on income above the tax filing thresholds ($9,750 for an individual and $19,500 for a married couple, 2012). Thresholds vary for seniors and head of households. Exemptions: ACA provides some exemptions to the individual mandate. Those who are in the following categories will not have to obtain health coverage, nor will they have to pay a tax: Financial hardship (The lowest cost health plan available exceeds 8% of household income, less employer contributions and subsidies); Religious objections; American Indians; Uninsured for less than three months;

6 Page 4 of 13 Incarcerated individuals; Undocumented immigrants; and Individuals with income below the tax filing threshold ($9,750 for an individual and $19,500 for a married couple filing jointly in 2012). Thresholds vary for seniors and head of households. 2) What are the employer requirements? There is no employer mandate to provide health coverage to their employees, but if large employers (with 50 or more full-time equivalent employees) do not offer coverage to their fulltime employees, or it is deemed unaffordable or inadequate, they will have to pay a tax. This is referred to as the free rider penalty. Specifically: Large employers that do not offer health coverage to substantially all full-time employees and their dependent children up to age 26 will be assessed a tax if at least one full-time employee enrolls in Covered CA and qualifies to receive a premium subsidy. A full-time employee is defined as an individual employed on average of at least 30 hours per week. The monthly tax will be 1/12 of $2,000 multiplied by the number of full-time employees, calculated by exempting the first 30 employees. Large employers that do offer health coverage will pay 1/12 of $3,000 per month for each full-time employee who does not have access to at least one adequate and affordable health coverage option sponsored by the employer, enrolls in Covered CA, and qualifies to receive a federal subsidy. This type of penalty is capped at the amount the employer would have to pay for failing to offer coverage to substantially all full-time employees and their dependent children. Employers with fewer than 50 full-time equivalent employees will not owe tax regardless of whether or not they offer coverage, or whether it is affordable or adequate. The following are some additional requirements that may be of interest: Beginning later this year, employers must notify employees of the availability of health coverage in Covered CA. For plan years beginning on or after September 23, 2012, employers must provide Summaries of Benefits and Coverage (SBC) to help eligible individuals understand their available benefit options; employers must provide this information with annual enrollment materials, in connection with a special enrollment event (such as getting married or having a baby), and upon request. Beginning with the 2012 tax year, employers required to file more than 250 W-2 Forms during the previous tax year must report the cost of employer-sponsored health coverage on the employee's W-2 forms. Employers with over 200 full-time employees will also have to begin auto enrolling their newly eligible, full-time employees into health coverage unless they make an election to either opt in or opt out of coverage. The requirements and effective date for this provision will be established by future regulations.

7 Page 5 of 13 3) How will ACA affect my district? Grandfathered plans (that were in existence prior to March 23, 2010 and have not made prohibited changes since then) will be allowed to remain essentially the same, except that they have been or will be required to extend dependent coverage to age 26, eliminate annual and lifetime limits on coverage, prohibit rescissions of coverage, and eliminate waiting periods for coverage of greater than 90 days. Most have met these requirements already. New employer-sponsored health coverage (or plans that have been changed since March 23, 2010 are not eligible to be grandfathered) will have to meet all of the above standards, and have been or will be required to provide specified preventative services with no co-payments or deductibles, cannot require a referral or preauthorization for OB/GYN services, have to provide certain access to emergency services, must have limits on out-of-pocket maximums ($6,050 for single coverage and $12,100 for family coverage 2012 dollars), and cannot discriminate in favor of highly compensated individuals, against participants in clinical trials, or with respect to medical providers. Non-grandfathered, fully insured, small group plans must also cover all essential benefits and cannot impose deductibles greater than $2,000 for individual coverage and $4,000 for family coverage. Districts are not required to provide health coverage to their employees or their dependents, but if large districts do not offer coverage or they offer coverage that is inadequate or unaffordable, and at least one employee enrolls in Covered CA and qualified for federal subsidies, the district will have to pay a tax beginning in Only self-only health coverage has to meet the affordability requirement. Districts will not be taxed in connection with any of their part-time employees. The impact to school districts will vary. It will depend on whether or not the district is a "large employer" and, if so, whether they offer health coverage to all of their full-time employees, and whether the coverage is adequate and affordable. Districts may also try to lower the hours of their full-time employees to less than 30 hours a week to avoid the requirements to offer adequate and affordable coverage or potentially pay a tax. They may attempt to make self-only coverage more affordable by paying less if anything for dependent coverage, since self-only coverage has to be affordable for the employer to avoid paying a tax. 4) Does the district/employer have to bargain any changes to health care? Yes, if health benefits are in the CSEA contract the employer must bargain any changes to the health plan with CSEA. 5) Can the district/employer just decide not to provide health care and just pay the fee instead? No, if health benefits are in the CSEA contract the employer must bargain any changes to the health plan with CSEA.

8 Page 6 of 13 6) If I have employer-sponsored health care, what changes for me? Most likely, there will be no changes for employees who have an affordable health care plan for themselves and their dependents. If you currently have employer-sponsored health coverage, you have satisfied the mandate to have coverage. If the premium costs of your employer-sponsored, self-only health coverage exceeds 9.5 percent of your household income, you could qualify for federal subsidies in Covered CA to help you pay your premiums, depending on your income. You could also choose to keep your employer coverage, but will not receive any federal subsidies because they are only available in Covered CA. You could also qualify for an exemption. If you have dependents and currently have employer-sponsored coverage for them, you will satisfy the mandate for coverage. If you do not have health coverage for your dependents you will likely have to obtain it. There is an exemption if your cost for dependent coverage exceeds 8 percent of your household income. 7) How does ACA affect part-time employees? Under ACA large employers (with 50 or more full-time equivalent employees) have to offer affordable health coverage to full-time employees or they will face a tax. Full-time employees are defined as working 30 hours a week or more. There is no employer obligation to provide health coverage to part-time employees, nor will they be subject to a tax for not doing so. Part-time employees can still purchase health coverage through their employers if it is offered. This will satisfy the individual mandate. If the coverage is considered unaffordable, the parttime employee can purchase health coverage through Covered CA and could qualify for subsidies, depending on their household income. Part-time employees who are not offered health coverage through their employer will be able to purchase health coverage through Covered CA and may qualify for subsidies to help pay premiums, depending on their household income. Part-time employees may be eligible for public health programs. ACA has allowed states to expand public programs to more people and to make it easier for people to apply and enroll in these programs. The Governor and the Legislature are currently working on expanding the Medi-Cal program to single adults up to 138 percent of federal poverty ($15,414 for an individual, 2012). They are also working on making it easier for people who currently qualify for Medi-Cal to apply for the program. The Legislature and Covered CA are also working on various proposals to provide more affordable coverage for people earning between 138 and 200 percent of the federal poverty level ($15,414 to $22,340 for individuals, 2012). If these proposals pass, another option may be available for part-time employees who do not have access to affordable employer-sponsored health coverage.

9 Page 7 of 13 8) Can the district just provide health care for their management employees, teachers, and not classified employees? If some employers wanted to provide health care for some of their full-time employees, but not others, it would have to be agreed to in a collective bargaining agreement. In addition, the plan is not allowed to discriminate in favor of highly compensated employees. If large employers fail to offer coverage to substantially all of their full-time employees, they would also owe a free rider penalty for every full-time employee (after the first 30) if at least one employee enrolls in Covered CA and qualifies for subsidies. Future federal regulations could provide further guidance. 9) Do employers have to offer family coverage or can they just offer self-only coverage? Employers who offer self-only health coverage to their full-time employees must also offer coverage to dependent children up to age 26. However, only the self-only coverage has to be affordable in order for a large employer to avoid paying a potential tax. Employers do not have to offer coverage for spouses. If the self-only coverage is considered affordable, but the dependent coverage is not affordable, the employer has satisfied the requirement to offer affordable coverage under the free rider penalty. The employee would not be eligible for subsidies for Covered CA. If the coverage is affordable for the employee it will also be considered affordable for the dependent and the dependent would not qualify for a subsidy through Covered CA. 10) Is it better for me to get health coverage through Covered CA? That depends on the coverage you currently receive from the employer and your income level. If the employer provides adequate and affordable coverage, then you would not be eligible for subsidies through Covered CA. However, if your employer-sponsored health coverage is considered inadequate or unaffordable you will be able to purchase health care through Covered CA and may qualify for subsidies, depending on your income. You will have to determine which is better in your unique situation. Covered CA is designed to help provide affordable health care to individuals who do not have access to health coverage, or the health coverage that is available to them is considered unaffordable. The coverage in Covered CA is made affordable with federal subsidies and must meet the essential health benefits standard. Without subsidies, the health coverage through Covered CA may be more expensive than health coverage offered through employers. You can use the calculator below from Covered CA to get an estimate of your monthly premium costs, possible subsidies, and how much your maximum out-of-pocket costs may be. Remember, the out of pocket costs are in addition to the premium costs. You can also use the other link from Covered CA to show the standard benefit design, and the possible out-of-pocket costs for specific medical services. The last link shows you a summary of the standard benefits with possible monthly premium costs plus total out-of-pocket cost limits by specific income.

10 Page 8 of 13 Sources: Covered CA calculator Covered CA Standard Benefit Plans Comparison Chart for various coverage HealthPlanBenefitsComparisonChart.pdf Covered CA Health Plan Benefits Summary, examples of monthly and out-of-pocket costs 11) What happens to my childrens coverage? Employers who offer self-only coverage for their employees must now offer health coverage for their dependents. They do not have to offer coverage to spouses. Children up to age 26 have to be offered coverage, but dependent coverage does not have to be affordable. If the self-only coverage is considered affordable, but the dependent coverage is not affordable, the employer has satisfied the requirement to offer affordable coverage, and therefore would not owe a free rider penalty tax. The employee would not be eligible for subsidies through Covered CA. If the coverage is affordable for the employee, it will also be considered affordable for the dependent and the dependent would not qualify for a subsidy through Covered CA. If the employee does not have access to employer-sponsored coverage, or is eligible for coverage that is deemed unaffordable, the employee and dependents may be able purchase health coverage through Covered CA and may qualify for federal subsidies. Depending on income, the dependent children may qualify for Medi-Cal. If they qualify for Medi-Cal, the dependents would not qualify for Covered CA subsidies. 12) What if I pay more than 9.5% of my income in premiums? If you are required to pay more than 9.5 percent of your household income in premiums for self-only coverage, the coverage is considered unaffordable (The employer only has to offer one health plan option that is considered affordable to satisfy their requirement). You can purchase health coverage through Covered CA and may qualify for federal subsidies to help pay your premium costs, depending on your income. You could keep your employer coverage, but will not receive federal subsidies to help with premiums. You may also qualify for an exemption from the individual mandate. If you pay more than 9.5 percent of your household income in premiums for dependent coverage, but self-only coverage is affordable, you are not eligible for subsidies in Covered CA for you or your family. However, you may be eligible for an exemption from the individual mandate for your dependents, but not yourself. It is important to remember that your household income is used to determine your eligibility for subsidies in Covered CA.

11 13) Does the 9.5% affordability standard apply to the self-only and family coverage? Page 9 of 13 If the employer offers health plans with composite rates (the same rate for individuals and families), then the affordability calculation is based on the composite rate. If the employer offers tiered rates, then the affordability calculation is based on the self-only coverage rate. 14) How can I get subsidies to help me pay for my health coverage? For individuals to qualify for subsidies they must: Have household income between 133% and 400% of federal poverty; Be enrolled in health coverage in Covered CA; Be ineligible for government sponsored health programs like Medi-Cal, Medicare and Healthy Families; Be ineligible for employer-sponsored health coverage or their employer-sponsored health coverage is considered unaffordable or does not provide minimum value; and Be lawfully present in California. Note: No subsidies are available to employees with employer-sponsored health coverage. Subsidies are only available to people receiving health coverage through Covered CA. 15) How/When can I enroll in Covered CA? Pre-enrollment for Covered CA will begin October 1, The health coverage will become effective January 1, Open enrollment continues through February 28, There will be several ways to enroll in Covered CA. You will be able to enroll online, by phone or in person. The website will be able to accept applications by October 1, The call centers are still being created and are expected to be operational by October 1, Covered CA will have certified navigators and assistors throughout California helping with the process. Covered CA is also beginning an extensive outreach campaign that will include television, radio and online information about Covered CA and how to apply for health coverage. Employers will also be providing information to employees about Covered CA. CSEA is currently working with Covered CA to plan other ways of outreaching to CSEA members who may be eligible for health coverage and subsidies through Covered CA. Below is a link to Covered CA where you can obtain information about enrollment and other information about Covered CA. Sources: Covered CA calculator

12 Page 10 of 13 16) Will I be required to purchase health care? All individuals must obtain minimum essential health benefits or they will have to pay a tax. However, ACA provides the following exemptions to the individual mandate and tax: Financial hardship (The lowest cost health plan available exceeds 8% of household income, less employer contributions and subsidies); Religious objections; American Indians; Uninsured for less than three months; Incarcerated individuals; Undocumented immigrants; and Individuals with income below the tax filing threshold ($9,750 for an individual and $19,500 for a married couple in 2012). Thresholds vary for seniors and head of households. 17) How much will the Covered CA coverage cost? Covered CA has an online calculator that allows people to get an estimate of premium costs, possible subsidies, and maximum out-of-pocket costs. Remember, out of pocket costs are in addition to premium costs. It also has information on standard benefit designs and estimates for out-of-pocket costs for various medical services. In the future, it will also have a calculator that will help you compare health plans. Below are links to Covered CA s calculator and standard benefit designs. Sources: Covered CA calculator Covered CA Standard Benefit Plans Comparison Chart for various coverage HealthPlanBenefitsComparisonChart.pdf Covered CA Health Plan Benefits Summary, examples of monthly and out of pocket costs 18) Will I have the same coverage in Covered CA that I have with my employer? Covered CA will release information on their health plans and costs in the summer of At that time, you will be able to compare health plans and providers and the plans costs and structures. The plans in Covered CA will be required to meet essential health benefits standards. 19) What do the plans in Covered CA cover? Covered CA is expected to release plans in summer of At that time, we will know what providers are available and the plan structure. The plans will have to provide Essential Health Benefits that include: 1) Ambulatory patient services; 2) Emergency services; 3) Hospitalization; 4) Maternity and newborn care; 5) Mental health and substance use disorder services; 6) Prescription drugs; 7) Rehabilitative and habilitative services; 8) Lab services; 9) Preventative and wellness services and chronic disease management; and 10) Pediatric services, including oral and vision care.

13 Page 11 of 13 Covered CA has also released their standard benefit designs with cost estimates for various medical services, which is outlined in the links below. The first link is also to the Covered CA calculator where you can obtain estimates of costs depending on your situation. Remember premiums costs are in addition to total out of pocket costs. Sources: Covered CA calculator Covered CA Standard Benefit Plans Comparison Chart for various coverage HealthPlanBenefitsComparisonChart.pdf Covered CA Health Plan Benefits Summary, examples of monthly and out-of-pocket costs 20) How will I know if I qualify for Medi-Cal or Covered CA benefits? Individuals and families with adjusted gross incomes under 138 percent of federal poverty (up to $15,414 for an individual and $31,809 for a family of four in 2012) may be eligible for Medi-Cal. The Medi-Cal expansion legislation for adults is pending in the Special Session on health care. Families with incomes between 138 percent and 400 percent of federal poverty ($15,414 to $44,680 for an individual and $31,809 to $92,200 for a family of four in 2012) may be eligible for subsidies in Covered CA, if they are not offered affordable and adequate employer coverage. Subsidies are provided for premiums and some cost sharing. Subsidies are designed to limit the cost of premiums to 3 percent of family income for a family at 138 percent FPL and 9.5 percent of family income for a family at 400 percent federal poverty. Covered CA will be able to determine if you are eligible for Medi-Cal or Covered CA benefits. You will be able to contact them online, in person, or by phone. You can use the link below to obtain contact information and get an estimate of costs and income eligibility. You can also contact your local county welfare department to see if you are eligible for Medi-Cal. Sources: Covered CA calculator 21) I am a single parent with employee only coverage and my child is covered through the Healthy Families Program. How am I affected? If you currently have affordable employer-sponsored health coverage you have satisfied the individual mandate requirement. If the coverage is affordable, you would not qualify for subsidies through Covered CA. If your child is currently covered by the Healthy Families Program he or she will remain eligible for the program. However, the Healthy Families Program is now being merged into the Medi-Cal program. No child will lose medical coverage, but may have to change providers. The Medi-Cal program is notifying Healthy Families participants of the transition and will let them know how they will be impacted and if they must change providers.

14 22) If I decide not to buy insurance, how much will I have to pay for the fee? Page 12 of 13 Individuals who do not have health coverage beginning in 2014 will have to pay a tax, unless they are exempted. The annual tax is the greater of a flat dollar amount or percentage of income as outlined below: 1% of taxable income or $95 per adult, plus $47.50 per child in % of taxable income or $325 per adult, plus $ per child in % of taxable income or $695 per adult, plus $ per child in 2016 and beyond Families pay a maximum of three times the adult flat dollar amount, unless the percentage of income amount is greater and they would pay that amount. The penalty is calculated on income above the tax filing thresholds ($9,750 for an individual and $19,500 for a married couple, 2012). Thresholds vary for seniors and head of households. 23) I have heard Medi-Cal may expand in California; will I be eligible for those benefits? ACA allows states to expand their Medicaid program and to make it easier for people to enroll. In California the Medicaid program is called Medi-Cal. The Governor and the Legislature are working on proposals to expand the Medi-Cal program to single adults under the age of 65 up to 138 percent of the federal poverty level (approximately $15,414 annually 2012 data). If the legislation is passed and signed into law, those meeting the eligibility requirements will be able to enroll in Medi-Cal. Over two million people are expected to qualify. Covered CA will be able to determine if you are eligible for Medi-Cal benefits. You will be able to contact them online, in person, or by phone. You can use the below link to obtain contact information and get an estimate of costs and income eligibility. You can also contact your local county welfare department to see if you are eligible for Medi-Cal. Sources: Covered CA calculator 24) What is the excise tax and how will it impact me? ACA requires insurers and plan administrators to be taxed at 40 percent of the aggregate value of health plans above the high cost threshold beginning in It will be imposed on health care coverage in excess of $27,500 for family coverage, and $10,200 for self-only coverage. For retirees age 55 and older who are not Medicare eligible and for employees in high risk occupations, the limits will be higher $30,950 for family coverage and $11,850 for self-only coverage. These dollar thresholds will be indexed with inflation. The tax will take effect in It will only apply to premiums in excess of the dollar limits, is a 40 percent tax on insurance companies for insured plans and on plan administrators for selfinsured plans. The value of coverage does not include vision or dental if they are offered separately from the major medical coverage. It is likely that the costs of this tax will be passed on to employers and enrollees through higher premiums. To avoid the tax some employers may propose changing the plan types offered, making changes to networks or other cost saving measures.

15 Page 13 of 13 25) If I m still unclear on how this will affect me, who do I contact for more information? If you have any questions, contact your CSEA Labor Relations Representative or your CSEA Field Office. CAUTION: This document is intended to provide only a brief and general summary of CSEA s current understanding of ACA and related regulations as of February It is not intended to provide specific legal or tax advice to individuals for their specific situation. Individuals may wish to consult with a tax advisor and/or legal counsel to determine how ACA affects their circumstances. The information contained in this document is subject to change as the federal and state agencies continue to issue additional regulations and publish additional guidance on ACA.