Understanding the Affordable Care Act
There is much confusion around the Affordable Care Act (ACA) and the Health Insurance Marketplace.
Here is some information to help you understand it a bit better.
The ACA is a law that guarantees everyone with minimum essential health care coverage. You can’t be denied ACA health insurance coverage because of a pre-existing health condition and you can’t be charged more for your plan because of it. In California, the ACA marketplace is known as Covered California.
It’s important to know what’s required under the ACA. Here’s what you need to know as you get started:
- Open enrollment, from November 1 to January 31, is your time to buy health insurance.
- In many instances, you can get tax credits to help you pay for your health insurance.
Most everyone needs to have health insurance
When you’re looking for health care coverage, check the health plans you’re considering to be sure it says it meets “ACA minimum essential coverage.”
There are several ways to buy health insurance:
- Your employer
- Health insurance companies
- Health Insurance Marketplaces (Covered California)
Keep in mind
- Open enrollment is your time to buy health insurance.
- Open enrollment is a yearly time period set by Covered California. It’s your time to shop for individual health insurance and purchase a plan so you won’t pay a penalty at tax time.
- If you miss this window of time to purchase a plan, there are some exceptions called Qualifying Life Events that let you buy a plan during a Special Enrollment Period.
In some instances, you can get tax credits to help you pay for your health insurance
Depending on your family situation and annual income, you may be able to get a tax credit to help offset your health insurance costs. In California, if your household income exceeds138% of the Federal Poverty Level (FPL) you will receive an Advance Premium Tax Credit (APTC) to lower your premium to a maximum of 8.5% of your income based on the second-lowest Silver plan in your area.
Covered California is the intake platform for enrollment in Medi-Cal
If your income is 138% of the Federal Poverty Level or less, you qualify for Medi-Cal, which is California's version of the federal Medicaid program for low income individuals. The Covered California enrollment application is also the gateway to enrolling in Medi-Cal. Completing your Covered California application's "income" section accurately is important to avoid being mistakenly enrolled in Medi-Cal instead of a Covered California health plan. We can help you avoid this mistake by completing your application on your behalf.
This chart is the Program Eligibility by Federal Poverty Level for 2025:
What to do if your income doesn't qualify you for a tax credit
If your income is too high to qualify for a tax credit, it may be better for you to purchase a plan directly from a carrier. This is called buying a plan "off-exchange". Call us to find out more about off-exchange plans and whether they could meet your goals.