The ACA, Covered California and Group Health
10.7% of the exam 2 min
16 of the 75 Accident & Health questions: the Affordable Care Act's eligibility thresholds, enrollment and plan rules, Covered California, and group medical expense insurance with COBRA and Cal-COBRA.
Who qualifies for what
CDI's objectives give the income lines. Medi-Cal: adults 19 through 64 up to 138% of the federal poverty level, children under 19 up to 266%. Cost-sharing reductions on Silver plans: 138% to 250%. Advance premium tax credits: households up to 400%, calculated by Covered California and paid to the insurer, available only on qualified health plans bought through Covered California. Small businesses with 25 or fewer employees may get federal tax credits by buying through Covered California for Small Business.
Plan rules under the ACA
New individual and group health policies are guaranteed issue. Individuals enroll during open enrollment or a special enrollment period after a qualifying event such as losing coverage, marriage, birth or a move. Qualified health plans come in metal tiers by actuarial value: Bronze about 60%, Silver 70%, Gold 80%, Platinum 90%. They cover the essential health benefits, including pediatric dental and vision, which are mandatory, while adult dental and vision are optional. Children may stay on a parent's plan through the 26th birthday, or longer if disabled. The medical loss ratio requires 80% of individual and 85% of group premiums to go to care, with refunds when an insurer falls short. Agents must complete Covered California's agreements and certification before writing exchange applications.
Group medical expense insurance in California
Under CDI's objectives small groups are 2 through 100 employees and large groups 101 or more; small group coverage is guaranteed issue, and large group underwriting looks at occupations, group size and prior claims. Coverage may be insured (HMO, POS, PPO, EPO) or self-funded, but self-insured association health plans are prohibited by regulation. Registered domestic partners receive the same coverage as spouses (Ins. Code 10121.7). Small employers without a group plan can reimburse individual coverage through a QSEHRA, and employers of any size through an ICHRA.
Federal laws and continuation coverage
ERISA sets standards for private employer plans. COBRA lets employees of employers with 20 or more workers continue coverage for 18 months after job loss or reduced hours, and dependents for 36 months after events such as divorce, death or aging out. Cal-COBRA covers employers with 2 to 19 employees and can extend continuation to a combined 36 months. HIPAA adds portability and privacy rules; FMLA keeps coverage in force during up to 12 weeks of job-protected leave; the ADA, the Pregnancy Discrimination Act and mental health parity rules bar discrimination in benefits; and large employers face shared-responsibility payments under the ACA if their coverage is unaffordable.
Where people lose points
✗ "Cost-sharing reductions are available on any metal tier."
✓ They apply only to Silver plans, for incomes of 138% to 250% of FPL.
✗ "I can get a premium tax credit on a plan bought directly from the insurer."
✓ Tax credits require buying a qualified health plan through Covered California.
✗ "COBRA always lasts 18 months."
✓ 18 months for the employee's job loss; 36 months for dependents after divorce, death or aging out.
✗ "Adult dental is an essential health benefit."
✓ Pediatric dental and vision are mandatory; adult dental and vision are optional.
✗ "A small group in California means 2 to 50 employees."
✓ CDI's objectives define small groups as 2 through 100 employees.
Numbers to memorize
| Medi-Cal adults / children | 138% / 266% of FPL |
| Cost-sharing reductions | 138% - 250% of FPL |
| Premium tax credits | Up to 400% of FPL |
| Metal tiers | 60 / 70 / 80 / 90% |
| Dependent age | Through the 26th birthday |
| Medical loss ratio | 80% individual, 85% group |
| Small / large group | 2-100 / 101+ |
| COBRA | 20+ employees; 18 or 36 months |
| Cal-COBRA | 2-19 employees; up to 36 months total |
Test yourself
No answers here on purpose — retrieving them is the practice. Drill this domain if any of these stall you.
- What triggers a special enrollment period?
- Who calculates advance premium tax credits for Californians?
- What must an insurer do if it fails the medical loss ratio?
- How long may a child who ages out continue under COBRA?
- Which kind of health plan is prohibited by regulation in California?
Go deeper on these
- Annuities for the California life exam
- California group health insurance, COBRA and Cal-COBRA
- Covered California and the Affordable Care Act on the exam