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As California finalizes its initial open enrollment results, the data shows the state’s Individual Mandate played a part in the higher turnout.
According to Covered California, the state had a total of 418,052 new individuals sign up for health coverage through the exchange during open enrollment. That is 41% higher than the previous year’s figures, which only had 295,980.
Under California’s state-wide Individual Mandate, state residents, including domestic partners and their dependents, must enroll in qualified health insurance coverage for each month of the calendar year or face a penalty. The penalty state residents will face for failing to comply is calculated at a rate of $695 per adult and $347.50 per child or 2.5% of gross income above the filing threshold, whichever is higher.
Covered California has released an Individual Shared Responsibility Penalty calculator for individuals interested in determining the penalty amount that could be imposed on them for failing to obtain adequate coverage. It can be viewed here.
In light of the penalty for failing to obtain adequate health coverage, Covered California has announced a special-enrollment period to help individuals unaware of the new California penalty obtain coverage. The special-enrollment period will run from February 18 through April 30.
Only in effect for two months, California’s Individual Mandate is already having a positive impact. California Governor, Gavin Newsom said, “California is leading the way when it comes to putting policies in place that make health care more affordable for all.”
The success in California is part of a much bigger picture taking shape across the country as several other states had Individual Mandates go into effect this year. It is only a matter of time until they start seeing positive results as well.
In addition, the federal open enrollment results on Healthcare.gov demonstrate that the health care system is stabilizing and even growing. Over 2 million new individuals signed up for coverage through the federal health exchange, up from 2019 and, for the second consecutive year, the number of insurers participating in the marketplace is increasing.
Employers who thought the ACA was going away should reconsider their position. Evidence shows that the health care law, including its Employer Mandate, is becoming more ingrained in our healthcare ecosystem. And with the recent Fifth Circuit court ruling regarding the constitutionality of the ACA, it is very possible the law remains for good.
Under the ACA’s Employer Mandate, Applicable Large Employers (ALEs) organizations with 50 or more full-time employees and full-time equivalent employees) are required to offer Minimum Essential Coverage (MEC) to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value (MV) and is Affordable for the employee or be subject to Internal Revenue Code (IRC) Section 4980H penalties.
The IRS is currently issuing penalty assessments to employers that fail to comply with the ACA in Letter 226J. The agency is currently issuing notices for the
2017 tax year. It is speculated that IRS enforcement of the ACA will become more severe this year as well.