Updated: 2021-04-03 by
It's not too late! Affordable Care Act (Obamacare) enrollment is OPEN in California.
California has announced a special enrollment period (SEP) for health plan signups under the Affordable Care Act (Obamacare). This COVID-related enrollment period will run until the end of 2021. It is available to Californians who are currently uninsured or who currently have insurance purchased outside of Covered California.
Also, a new federal law, The American Rescue Plan Act of 2021 (ARPA), increases premium subsidies, provides free health insurance if you’re unemployed in 2021, and waives excess subsidy payments for the 2020 tax year. If you qualify for new financial assistance, you can visit Covered California to sign up.
This website provides information about the new programs available under ARPA as well as other facts about getting health insurance under the Affordable Care Act (ACA), including:
- whether you must get health insurance
- what the available plans cover
- how much coverage will cost
- how to sign up for a plan
- how to get help if you need it.
To begin, keep in mind these key points about health insurance in California:
1. California law requires you to have health insurance.
The federal tax penalty for going without health insurance ended in 2019, but a handful of states, including California, have enacted laws to replace it. If you are uninsured in 2020 and you don't qualify for an exemption, you'll face a penalty when you file your California taxes in 2021.
To learn more about the penalty and to find out whether you qualify for an exemption, see Do I Have to Get Health Insurance in California?
2. You can use the COVID special enrollment period to get covered under the Affordable Care Act, even though open enrollment is over.
Because of the COVID-19 pandemic, Covered California is open for new Obamacare signups until the end of 2021. This extension of the state's usual open enrollment period allows all Californians to get health coverage and benefit from new financial assistance programs.
To learn more about enrollment, see How To Sign Up for Obamacare in California.
3. You may qualify for new health insurance premium subsidies.
On March 11, 2021, President Biden signed the American Rescue Plan Act. The law provides $1.9 trillion of federal aid to Americans still struggling with the COVID-19 pandemic. The relief measures include additional premium subsidies for those who purchase health insurance under the Affordable Care Act. Also, California offers its own financial assistance programs. Here's a summary of the available programs:
Federal tax credits. Until the passage of ARPA, the ACA provided premium subsidies only for those whose income fell between 100% and 400% of the federal poverty level. (For example, the cutoff for a family of four in California was $104,800. For an individual, it was $51,040.)
Now, no individual or family will have to pay more than 8.5% of their household income for a mid-level “silver” plan purchased from Covered California. Even though the amount of the subsidy is based on a silver plan, you can apply the subsidy to any marketplace plan, including bronze, gold, or platinum plans. The subsidies are tax credits, but you can choose to have them automatically deducted from the cost of your monthly premiums when you purchase a plan through Covered California.
Even though California is allowing only uninsured people to enroll during the COVID-related enrollment window, you should still be able to switch to a silver plan at Covered California. That's because becoming eligible for new subsidies is a qualifying event that will allow you to buy or change plans outside of open enrollment. Keep in mind, however, that you have only 60 days to act after you become newly eligible.
These enhanced subsidies are retroactive to the start of 2021, but they're also temporary. They will last only through 2022 unless Congress enacts legislation to extend them.
Cost-sharing subsidies. More than half of the people who purchase coverage through a health insurance exchange receive "cost-sharing reductions" (CSRs). These subsidies automatically reduce your premiums and lower your costs when you use your insurance benefits—for example, when you go to the doctor, get lab work, or have to stay in the hospital. CSRs are available to people who make between 100% and 250% of the federal poverty level. (For 2021 health plans, that means a family of four in California can't earn more than $65,500 and an individual not more than $25,520.) Keep in mind that cost-sharing subsidies are available only on silver plans. If you think you may qualify, look carefully at costs for the silver plans available at Covered California while you are shopping for coverage.
California state subsidies. The state offers its own subsidies to the following three groups:
- Californians who earn between 400% and 600% of the federal poverty level are eligible to save an average of 23% on their monthly premiums. For 2021, 600% of the federal poverty level is $76,560 for an individual and $157,200 for a family of four.
- Those earning between 100% and 400% of the federal poverty level (see above) are eligible to receive state subsidies in addition to federal assistance. The state subsidy will contribute additional average savings of 5% on monthly premiums.
- State residents whose annual household income is less than 138% of the federal poverty level may see premiums for certain plans lowered to just $1 per person, per month. The 2021 earnings cutoff for this level is $17,609 for an individual and $36,156 for a family of four.
Medicaid. If your income is very low, you may qualify for free or low-cost coverage through Medi-Cal in California.
For more information, see Ways to Save Money on Obamacare in California.
4. If you are unemployed in 2021, you qualify for free health insurance.
If you receive unemployment benefits for at least one week in 2021, the American Rescue Plan guarantees that you can receive a mid-level silver plan for 2021 at no cost to you. This is because the law will disregard any income you earn over 133% of the federal poverty level. And that, in turn, will lock in the highest level of premium assistance for you. If you get a job, your eligibility will change. You’ll be able to apply for this benefit when you purchase an insurance plan through Covered California. Be prepared to prove that you are receiving or have received unemployment compensation this year.
As an alternative, from April through September of 2021, ARPA provides for 100% free coverage under COBRA for those who have been laid off or subject to a reduction of hours great enough to trigger COBRA eligibility. Speak to your former employer about this benefit; for more information about COBRA, see the U.S. Department of Labor website.
5. If you owed excess premium subsidies for 2020, you don’t have to pay.
Did you expect to owe the IRS for excess health insurance premium subsidies you received last year? The American Rescue Plan Act says you don’t have to pay back the money.
If your subsidy assistance fell short of your eligibility, you can still claim the additional amount owed to you when you file your taxes. But if your subsidy amount was too large, you get a free pass this year—and only this year. In other words, don’t underestimate your income when you purchase a 2021 plan because you hope for a similar break next year.
Because this rule is new and tax season is upon us, you may need to call your tax preparer for help. It’s not yet clear, for example, what you should do if you’ve already filed your 2020 tax return and repaid your excess tax credit. If you’re not sure what to do, you can always request an extension to file your taxes, giving you until October 15 to sort it out.
6. California insurers are sticking with the marketplace and premium rates are stable, despite the Covid-19 pandemic.
In California, all 11 insurers in the marketplace are continuing to offer plans for 2021, and Anthem Blue Cross and Oscar will offer plans in more counties. This means that most Californians will be able to choose between three or more insurers. Even better, rates for California insurance coverage are set to go up an average of just 0.6%.
A press release from Covered California stated that the pandemic will have "little effect on the total costs of care in California's individual market for 2020 and 2021."
7. California bans the sale of "short-term insurance plans" lasting more than 12 months.
In 2018, the Trump administration made it easier to purchase short-term insurance plans. These plans don't have to cover preexisting conditions or the essential health benefits provided by Obamacare plans. The new federal rules say that short-term plans can last for as long as three years. But California placed its own limits on the expansion of short-term plans. Under California law, insurers may not sell short-term plans lasting longer than 12 months.
If you’re genuinely caught without health insurance and need it for a few months to cover a new health condition, you might want to consider a short-term plan to get you through to the next open enrollment period. Otherwise, be careful of plans that don’t meet the requirements of the Affordable Care Act. Shop around to look for coverage that truly meets your needs.
Remember, if your income is very low, you may qualify for free or low-cost coverage through Medicaid in California.
8. You can get help signing up if you need it.
A couple of years back, the Trump administration drastically cut funding for programs that provide help with health insurance enrollment. But the Biden administration is expected to quickly reverse that trend, making it much easier to get the information you need to get covered. To connect with local support resources, see How To Sign Up for Obamacare in California.
You may also be interested in:
Where to go in California to get health plans under the Affordable Care Act (Obamacare) and how to get help with the application process.
Learn whether you must have health coverage under the Affordable Care Act (Obamacare) in California.
Learn the five factors that determine what residents of California will pay for health insurance under the Affordable Care Act