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Health Care Reform Guide

As we've been in the past, Health Net is here today to support you in what you do best – match your clients with the coverage that works for them.

Health Net offers health plans through Covered California.

From guaranteed issue to essential health benefits, Health Net health plans connect consumers with affordable, personal and local solutions that are simple to use.

In times of change, you've got one sure thing. Health Net.

Even though health care reform has hit Main Street, there will be continued changes to the way health care coverage works. We created this online guide to give you a high-level overview of the primary reform provisions and how they impact individual consumers and businesses.

The Metal Levels

The way health plans are structured will change in 2014 under the Affordable Care Act. The goal is to make it easier for individuals and small businesses to compare coverage options and tradeoffs, all while expanding access to coverage.

Effective 2014, all nongrandfathered individual and small group health plans will be organized in four levels of coverage: bronze, silver, gold, and platinum.

The levels are based on actuarial value calculations They define the split between what the consumer pays and what the health plan pays. As the metal category increases in value, so does the percent of medical expenses that health plans cover.

Percentage of medical expenses that health plans cover
Category Percentage of expenses paid by health plan Percentage of expenses paid by individual
Platinum 90% 10%
Gold 80% 20%
Silver 70% 30%
Bronze 60% 40%

In addition, all carriers who offer a metal level health plan – the Individual marketplace – are required to offer child-only plans in that level.

Carriers may offer a catastrophic-only policy to young adults (under age 30) and other individuals who are exempt from the ACA's individual responsibility (generally, individuals who would experience a hardship purchasing coverage). The catastrophic-only policy is available in the individual market only.

Individual consumers can compare and buy health insurance via the health insurance marketplaces. Every state has either a state-run marketplace or is using the federal Health Insurance Marketplace.

Health Net is participating in Covered California. We have the same plans – and many others – available to purchase through brokers and directly from us.

Marketplace health plans

Through the marketplaces, consumers have a choice of health plans from different insurance companies. The plans come in four levels: bronze, silver, gold, and platinum.

Health plans in each level offer the same benefits. So a silver plan from Company A has the same benefits as the one from Company B. This makes it easy to compare.

Open enrollment

Individuals and families may apply for coverage during open enrollment.

People can enroll outside of open enrollment if they qualify for a special enrollment period. Events that qualify include loss of employer-sponsored coverage, change in marital status, birth/adoption of a child, and others.

Eligible small business employers can enroll via Covered California for Small Business either according to their policy's renewal date or whenever they choose. Upon enrollment, the group coverage and premiums are locked in for 12 months.

Individuals may apply for coverage through the new health insurance marketplaces during open enrollment.

Individuals and families

Enrollment period Time frame
Enrollment date Coverage date
2018 enrollment period November 1 - January 31 On or before December 15
December 16 - January 19
January 20 - January 31
January 1
February 1
March 1

Making health insurance affordable is another priority of the Affordable Care Act. The federal government is providing financial assistance for eligible consumers who buy through a state or federal marketplace.

There are two types of financial help available to reduce the cost of health insurance:

  • Premium assistance: New premium tax credits will help to lower the cost of monthly premiums for qualified individuals. Eligible consumers can choose to:

    • Take the entire amount of premium assistance right away to lower their monthly premium bills.
    • Wait until the end of the year and apply the amount as a credit when filing taxes.
    • Apply some right away, and the balance at tax time.

  • Cost-sharing reductions: (Also known as subsidies and cost-sharing subsidies). In addition to premium tax credits, certain consumers may also be eligible for reductions of their out-of-pocket costs. For example, a copayment for a doctor office visit might be $3 instead of $20. To receive cost-sharing reductions, eligible consumers have to enroll in a silver-level qualified health plan.

Both types of financial help are available only to eligible consumers who buy health insurance through a state marketplace or the federal health insurance marketplace.

Eligibility is based on annual household income as a percentage of the Federal Poverty Level (FPL).

Household income Eligibility
134%–250% FPL
  • Premium assistance
  • Cost-sharing reductions if enrolled in a silver-level health plan through a state marketplace or the federal health insurance marketplace
250%–400% FPL Premium assistance
Over 400% FPL Can purchase health insurance through the marketplace but do not qualify for financial help

Consumers at or below 133% of the FPL qualify for Medicaid and are not eligible for premium assistance. Some states are planning to expand Medicaid eligibility to 138% of the FPL.

People offered coverage by an employer are not eligible for premium assistance unless the employer's plan does not meet the minimum value of at least 60 percent or unless the person's share of the premium is more than 9.5 percent of their household income.

Coverage changes and consumer protections are among the biggest provisions of the Affordable Care Act (ACA). Here is a snapshot of the provisions in place today.

Provision Coverage Details

No lifetime limits and restriction on annual limits

Prohibits individual and group health plans from placing lifetime limits on the dollar value of coverage.

Restricts annual limits on the dollar value of coverage.

100% coverage for preventive care

Plans must cover, without cost-sharing, a variety of preventive services as determined by organizations such as the U.S. Preventive Services Task Force and the Centers for Disease Control and Prevention.

Over-age dependent coverage

Group and individual market health plans providing coverage for dependent children must continue to make coverage available for an adult child until the child turns 26 years of age.

No pre-existing conditions exclusions for children

Plans are prohibited from denying coverage to children with pre-existing conditions who are under 19 years of age.

Emergency services

For all ACA-compliant plans, emergency services are covered:

  • With no prior authorization.
  • For any provider, whether in- or out-of-network.
  • At the same copayment or other cost-sharing, whether in- or out-of-network.
  • Without difference in coverage, whether in- or out-of-network.

Rescinding coverage

Insurers and group health plans may not rescind an enrollee's coverage unless the individual has performed an act that constitutes fraud against the plan or has intentionally misrepresented a material fact to the plan.

The Affordable Care Act defines large employers as companies that have, on average, at least 50 full-time (or full-time equivalent) employees. These employers are required to provide health coverage that is affordable and meets a minimum value or pay a tax penalty.

The provision was originally slated to take effect in 2014 and then, under transitional relief, moved to 2015. Then in February 2014, the administration announced final rules that provide additional flexibility for employers.

Play or Pay

Nicknamed the "Play or Pay Rules," this provision applies to for-profit, nonprofit and government employers, and defines a full-time employee as an employee who was employed on average at least 30 hours of service per week during the preceding calendar year. The penalty applies if the employer does not offer coverage that meets the minimum value standard and is affordable, and at least one employee gets financial help through their state marketplace or the federal Health Insurance Marketplace.

  • Minimum value standard: Employer-sponsored health plans must cover at least 60 percent of covered costs.
  • Definition of affordable coverage under Safe Harbor rules:
    • Employees pay no more than 9.5% of their household income for their contribution of an employer-sponsored health plan.
    • Employers that offer more than one health plan: The affordability test applies to the lowest-cost option available to the employee as long as that option meets minimum value.

Employers can use the government-developed calculator to check minimum value. The Health Net Summary of Benefits of Coverage (SBC) states whether the plan meets minimum value.

Effective dates

The IRS published final regulations on February 12, 2014. Under the final regulations, applicable large employers that have fewer than 100 full-time employees generally will have until 2016 to comply with the pay or play rules. Applicable large employers with 100 or more full-time employees must comply starting in 2015.

Employer Shared Responsibility Reporting Requirements (ACA Section 6056)

Applicable Large Employers (ALEs) who are subject to the employer shared responsibility provisions of the Affordable Care Act must comply with IRS reporting requirements. The IRS defines an ALE as an employer with at least 50 full-time employees or a combination of full-time and part-time employees that is equivalent to at least 50 full-time employees (for example, 100 half-time employees equals 50 full-time employees).

Beginning in 2016, ALEs must annually report the offer of health insurance coverage to employees, and send a statement about the offer of coverage to full-time employees. The IRS will use the information to determine if individuals are eligible for a marketplace subsidy and/or if ALE owes a shared responsibility penalty.

When to report and send statements to employees

Employer shared responsibility reporting begins in 2016, for the 2015 calendar year. Employers are required to:

  • File Forms 1094-C and 1095-C with the IRS by February 28 (March 31 if filing electronically); and
  • Send Form 1095-C to each full-time employee (including former employees employed at any point during the prior year) by January 31.

    Attention: IRS Notice 2016-4, released December 28, 2015, provides additional time for Employers to comply with Employer Shared Responsibility filing requirements for tax year 2015. Applicable Large Group Employers must provide Form 1095C to full time employees by March 31, 2016 and file the 1094C with the IRS by May 31, 2016 or by June 30, 2016 if filing electronically.

    • The form may be sent with an employee's W2 statement.
    • Groups may send Form 1095-C to employees electronically, but only if the group obtains the employee's consent in advance and follows all the rules for notice, updating and withdrawal of consent.

Note: ALEs with self-insured plans may use Forms 1094-C and 1095-C to fulfill reporting requirements under Sections 6055 (MEC reporting) and 6056 (Employer Shared Responsibility reporting). Non-ALE groups (i.e., small business groups) with self-insured plans must also report under Section 6055 but are not required to report under Section 6056.

What to include on the forms

Form 1094-C

  • Identifying information for your organization, including your Employer Identification Number (EIN) and a name of a person the IRS may contact;
  • Information about whether you offered coverage to 70 percent of your full-time employees and their dependents in 2015. (In 2016, the threshold changes to 95 percent);
  • Total number of 1095-C forms you issued to employees;
  • Full-time employee and total employee counts by month; and
  • Whether you are eligible for transition relief under Section 4980H.

Form 1095-C

  • Who is/was a full-time employee for each month;
  • Identifying information for employer and employee, including the employee's TIN/SSN;
  • Information about the health coverage offered by month, if any;
  • The employee's share of the monthly premium for lowest-cost self-only minimum value coverage;
  • Months the employee was enrolled in your coverage;
  • Months the employer met an affordability safe harbor with respect to an employee and whether other relief applies for an employee for a month; and
  • If the employer offers a self-insured plan, information about the covered individuals, including dependents enrolled in the plan, by month.

Filing requirements at-a-glance

In addition to the forms that health plans are required to file, the marketplaces and certain employer groups also have form-filing requirements. The chart below outlines who sends what form.

The chart below summarizes the responsibility for entities that provides Minimum Essential Coverage and are subject to Employer Shared Responsibility.

Plan type Minimum Essential Coverage Reporting (Section 6055) Employer Shared Responsibility Reporting (Section 6056)
Individual (marketplace plan) Form 1095-A Sent by the marketplace N/A
Individual (non‑marketplace) Forms 1094-B and 1095-B Filed and sent by the health plan N/A
Small Group fully insured plan (SHOP and non‑marketplace) Forms 1094-B and 1095-B Filed and sent by the health plan N/A
Small Group self-insured plan (non-ALE) Forms 1094-B and 1095-B Employer's responsibility to file and send statements to employees/former employees N/A
ALE fully insured plan Forms 1094-B and 1095-B Filed and sent by the health plan Forms 1094-C and 1095-C (sections I and II only) Employer's responsibility to file and send statements to employees
ALE self-insured plan Forms 1094-C and 1095-C (all sections)
  • Employer's responsibility to file and send statements to employees
  • Self-insured large group plans meet reporting requirements of both section 6055 and 6056 by filing Forms 1094-C and 1095-C

Forms 1094-C and 1095-C (all sections)

  • Employer's responsibility to file and send statements to employees
  • Self-insured large group plans meet reporting requirements of both section 6055 and 6056 by filing Forms 1094-C and 1095-C

Additional forms and information

This information is for general purposes only and is not legal or tax advice. For more detailed information about IRS filings, taxes or legal implications, please contact your professional tax advisor or legal counselor.

Beginning January 2014, all nongrandfathered individual and small group commercial health plans have to include a comprehensive package of items and services called Essential Health Benefits (EHBs).

Large group plans do not have to provide EHB coverage. However, if a large group plan currently provides coverage of an EHB, annual dollar limits are prohibited. For reference, the minimum EHB categories include:

  • Ambulatory patient services.
  • Emergency services.
  • Hospitalization.
  • Maternity and newborn care.
  • Mental health and substance use disorder services, including behavioral health treatment.
  • Prescription drugs.
  • Rehabilitative and habilitative services and devices.
  • Laboratory services.
  • Preventive and wellness services, and chronic disease management.
  • Pediatric services, including dental and vision care.

Actual services vary by state – each state may define EHBs by choosing a benchmark plan.

Plans subject to the EHB requirement must provide benefits that are equal to or greater than the benchmark plan; annual dollar amounts are prohibited.

Annual cost-sharing limits

Annual cost-sharing limits are limits on how much people have to spend on their own health care. The annual cost-sharing — or out-of-pocket (OOP) expenses — is for self-only and for family coverage.

The limitation and cross-accumulation of cost-sharing applies to all covered plan services, including non-Essential Health Benefits and ancillary benefits.

All medical services cross-accumulate to this annual cost-sharing limit. However, cross-accumulation to benefits administered by third-party service providers may be delayed.

Excise tax

Scheduled to take effect in 2018, the excise tax is a 40 percent tax on employer-sponsored group health plans with costs that exceed a predetermined level. The cost level (as of July 2013) is $10,200 for individual coverage and $27,500 for family coverage.

For more information please see Excise Tax aka "Cadillac Tax" section on this page.

Guaranteed availability of insurance

Health insurance issuers must accept all individuals in the state that apply for coverage regardless of health, age, gender, or any other factors including pre-existing conditions.

A "grandfathered" plan is a group or individual health plan in which a person was enrolled on March 23, 2010.

Grandfathered plans are exempt from certain mandates that can add to cost, such as:

  • Covering specified preventive services without cost-sharing.
  • Eliminating differences in coverage or premiums based on salary.
  • Certain limits on out-of-pocket costs for participants in 2014.

Grandfathered plans do incorporate three key protections of the ACA:

  • No lifetime limits.
  • Restricted annual limits through 2013; no annual limits effective January 1, 2014 (applies only to group grandfathered plans).
  • Extension of dependent coverage up to age 26.

Grandfathered plans are not subject to marketplace-related fee requirements or risk adjustments. However, all plans – regardless of grandfathered status – are subject to ACA provisions that are outside of the sections relating to insurance reform, such as revenue raisers (excise tax).

Individuals and groups can keep a grandfathered plan for as long as it is offered, and there are no significant changes to the plan per the requirements of the Affordable Care Act (ACA). Here are all the things groups cannot do if they want to retain grandfathered plan status:

  • Cannot significantly cut or reduce benefits. For example, a plan cannot choose to no longer cover care for people with diabetes, cystic fibrosis or HIV/AIDS and maintain grandfathered status.
  • Cannot raise coinsurance charges.
  • Cannot significantly raise copayment charges.
  • Cannot significantly raise deductibles. Compared with the deductible required as of March 23, 2010, grandfathered plans can only increase these deductibles by a percentage equal to medical inflation plus 15 percentage points.

    In recent years, medical costs have risen an average of 4 to 5 percent, so this formula would allow deductibles to go up, for example, by 19 to 20 percent between 2010 and 2011, or by 23 to 25 percent between 2010 and 2012.
  • Cannot significantly lower employer contributions. Grandfathered plans cannot decrease the percentage of premiums the employer pays by more than 5 percentage points (for example, decrease their own share and increase the workers' share of premium from 15 percent to 25 percent).
  • Cannot add or tighten an annual limit on what the insurer pays. Plus, plans that do not have an annual dollar limit cannot add a new one unless they are replacing a lifetime dollar limit with an annual dollar limit that is at least as high as the lifetime limit.
  • Cannot restructure the company for the purpose of moving employees to a GF plan. Employers cannot conduct a merger, acquisition or similar business restructuring, if the principal purpose of the action is to cover new individuals under the grandfathered plan.
  • Cannot move employees to a plan with lesser benefits. Cannot force employees to switch to another grandfathered plan that has fewer benefits or higher cost-sharing unless there is a bona fide employment-based reason for the change. Reducing employers' costs is not a bona fide reason.

Increasing the number of Americans who have health insurance is a primary objective of the Affordable Care Act. That's why the reform law has coverage requirements for individuals.

Most U.S. citizens and legal residents have to be enrolled in a health insurance plan that meets minimum essential coverage. People currently insured through an employer or a plan they bought on their own likely meet the requirement already. So do those enrolled in a Medicare plan, TRICARE, Medicaid, and a few other programs.

People who are exempt from the requirement are those who:

  • would have to pay more than eight percent of their income for health insurance,
  • have incomes below the threshold required for filing taxes, or
  • qualify for religious exemptions.

Also exempt are:

  • undocumented immigrants,
  • people who are incarcerated, and
  • members of Native American tribes.

People who are required to have health insurance but choose not to buy it will be required to pay a penalty when filing their taxes.

Pay the greater of …
Year Percentage of family income Set dollar amount

2014

1%

$95 per adult and $47.50 per child (up to $285 for a family)

2015

2%

$325 per adult and $162.50 per child (up to $975 for a family)

2016 and beyond

2.5%

$695 per adult and $347.50 per child (up to $2,085 for a family)

The total penalty for the taxable year will not exceed the national average of the annual premium for a bronze-level plan offered through the health insurance marketplaces.

The waiting – or probationary – period is the period of time set by an employer before coverage becomes effective for a new employee enrolling into the group's health benefit coverage.

Group health plans and health insurance carriers that offer group coverage may not apply a probationary period that exceeds 90 days.

The probationary period provision applies to grandfathered and nongrandfathered plans, and to fully insured and self-insured/ASO groups.

What is the Probationary Period?
The probationary period is the period of time set by an employer before coverage becomes effective for a new employee enrolling into the group's health benefit coverage.

What are the Probationary Period Maximums?
Under the ACA provision, the maximum probationary period is 90 days for group health plans and health insurance carriers that offer group coverage.

Because Small Business Group members may only be enrolled on the first of the given month, the longest probationary period a Small Business Group employer may impose is the First of the Month Following (FOMF) 60 days.

Does the federal law apply to all plans?
The federal ACA provision applies to:

  • Grandfathered and nongrandfathered plans.
  • Fully insured and self-insured/ASO groups.
  • Groups with collective bargaining agreements (CBAs).

It does not apply to student health plans since, under the ACA, student health plans are treated like individual plans.

Is the probationary period for COBRA participants, retirees or early retirees the same as for active employees?
No. The probationary period for COBRA participants, retirees and early retirees may be different than the probationary period for active employees. COBRA participants, retirees and early retirees typically would have no probationary period, whereas one may be imposed for all other classes of employees.

Are groups that manage their own probationary periods required to adhere to the ACA probationary period regulation?
Yes. Groups that manage their own probationary period are expected to adhere to applicable federal regulations.

What do groups do if their probationary period exceeds the new limits?
Groups that have a probationary period that falls outside the new limits must change their probationary period.

Are groups allowed to have shorter probationary periods or waive the probationary period altogether for rehires?
Yes. There are no federal rules that prohibit an employer from waiving the probationary period if an employee is reinstated/rehired.

Can groups continue to require employees/plan participants to satisfy a minimum number of hours or days of service before the probationary period begins?
Yes. As long as the intent of the requirement is not to circumvent the probationary period regulations, groups may continue to require employees meet a threshold before the probationary period begins.

The Medical Loss Ratio (MLR) is one of the Affordable Care Act (ACA) provisions designed to provide better value to consumers and increase transparency. It limits the portion of premium dollars health insurance companies may spend on administration, marketing, and profits.

The provision took effect for coverage purchased in 2011 and requires health insurance companies to:

  • Report annually the proportion of premium dollars spent on health care costs and the quality of care.
  • Pay rebates to policyholders if the share of premiums spent on clinical services and quality is less than:
    • 80% for plans in the individual and small group markets.
    • 85% for plans in the large group markets.

MLR is calculated based on a company's entire book of business, not by a specific plan or group.

One of the responsibilities employers have under the Affordable Care Act is to notify employees about the health insurance marketplaces that will open in October 2013.

Employers of all sizes are required to provide the notification to employees at time of hire. The notice has to go to full-time and part-time employees. For all current employees, the original notification deadline was March 1, 2013. However the Department of Labor (DOL) changed that deadline to no later than October 1, 2013, to coincide with the initial open enrollment period for the marketplace.

The written notification has to do three things:

  1. Tell employees about the marketplace, including a description of the services provided and how they can contact the marketplace if they need help;
  2. State whether the employer offers a health plan that meets the minimum value standard. To meet the minimum value standard, the total allowed benefits costs covered by the lowest-cost plan the employer offers must be no less than 60 percent. If a plan does not meet the standard, the notification has to tell employees that they may be eligible for a premium tax credit if they purchase a qualified health plan through the marketplace; and
  3. Explain that if the employee purchases a qualified health plan through the marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.

The major provisions of the Affordable Care Act are right around the corner. The way premiums are rated will be a major factor in reshaping the health insurance market.

As one example, health insurers in the Individual and Small Group markets must treat the entire market as a single risk pool when setting rates.

In addition, differences in premiums based on health status are not allowed. Insurers must rate sick people and healthy people the same based on specific rating factors.

Health plans under reform can vary premiums based on the following four allowable rating factors:

  • Age – limited to a 3:1 ratio. This means that the rate for a 64-year-old can't be more than three times (i.e., 300 percent) the rate for a 21-year-old.
  • Family composition with member-level rating applied. This means that each family member will be rated individually based on his/her age.

    Carriers can charge only for the three oldest children in the family who are under 21*. For example, let's say the Moore family has mom, dad and four children under age 21. The Moore family's rate would include: mom + dad + the child rate x 3 (age 0–21).

    Now if the oldest of the four children in the Moore family is over 21 years old, the rates would include: mom + dad + 23-year-old + the child rate x 3 (age 0–21).
  • Geographic rating area.
  • Tobacco use – limited to a 1.5:1 ratio.

Health Net has opted against rating for tobacco, so we will not be factoring that into our rates.

* Rating methodology varies by state. For example, in California, the three oldest dependents under age 21 are rated for individual and family plans.

Back in the day, the three Rs were reading, writing and arithmetic. In the world of health care reform, they are reinsurance, risk corridors and risk-adjustment.

The "3Rs," as they are commonly known, are Affordable Care Act provisions that concern pooling and risk-sharing. These provisions are intended to remove health status from premium calculations, so that neither individuals nor employer groups who have sick employees are rate-disadvantaged.

Here's what you need to know:

Reinsurance program

Health and Human Services (HHS) and the states will establish a $25 billion transitional (2014 through 2016) reinsurance program to stabilize the individual market. The program is funded by health insurers and group health plans.

Risk corridors

This provision establishes a risk corridor program for "Qualified Health Plans (QHPs)" in the Individual or Small Group market (2014 through 2016) based on the plan's ratio of allowable costs to a target amount (modeled on the risk corridors under Medicare Part D for regional PPOs).

Risk-adjustment program

HHS or the states will establish a risk-adjustment process for the Individual and Small Group markets within that state to adjust funds from health plans that serve enrollees with lower actuarial risk to those issuers that serve enrollees with higher actuarial risk.

See also: Taxes and Fees on this page.

Health plan companies, like Health Net, are required to report Minimum Essential Coverage (MEC) data to the IRS for individuals, including covered dependents, beginning in 2016. This requirement is Section 6055 of the Affordable Care Act.

There are two forms to file:

  • Form 1094-B: the transmittal to the IRS – electronically filed by March 31, 2016, for 2015 and annually thereafter.
  • Form 1095-B: the return – filed along with the transmittal; copy is sent to the individual consumer by January 31 of the year following the coverage year.

    Attention: IRS Notice 2016-4, released December 28, 2015, provides additional time for Health Plans to comply with Minimum Essential Coverage filing requirements for tax year 2015. Health Plans must provide Form 1095B to individuals by March 31, 2016 and file the 1094B with the IRS by June 30, 2016.

Both forms are filed for these plan types:

  • Individual & Family Plan, off-exchange
  • Small Business Group, fully insured, off-exchange
  • Large Group, fully insured

Reporting is not required for government programs including state health plans, Medicare and Medicaid (Medi-Cal in California).

Reporting details

General
The IRS forms require the name and Social Security number (SSN) or a tax identification number (TIN) for each covered individual. The months for which that individual was enrolled for at least one day of coverage and entitled to receive benefits also will be reported.

Health plans are required to make three attempts to collect SSNs/TINs for covered members in order to provide complete reporting to the IRS.

Health Net specifics
Health Net will solicit SSN/TIN numbers at time of enrollment, followed by two annual solicitations for any member for whom we do not have a number. We will begin these attempts in 2015.

Please encourage your clients – employer groups and individuals alike – to provide Health Net with SSNs/TINs for themselves and any covered dependents.

Reassure them that it is completely safe to give Health Net this information. It's also to their benefit. Without the SSN/TIN, the IRS will not be able to match coverage reported on your client's IRS Form 1040 with the coverage information Health Net will report on the Form 1095-B. The inability to match could result in a tax penalty related to the ACA individual responsibility mandate.

Annual statements to consumers
Health plans must send Form 1095-B statements to responsible individuals by January 31 of each year, starting in 2016 for the 2015 calendar year. Consumers can use the statement as supporting documentation for tax purposes.

Filing requirements at-a-glance
In addition to the forms that health plans are required to file, the Marketplaces and certain employer groups also have form-filing requirements. The chart below outlines who sends what form.

Plan type Minimum Essential Coverage Reporting (Section 6055) Employer Shared Responsibility Reporting (Section 6056)
Individual (marketplace plan) Form 1095-A Sent by the marketplace N/A
Individual (non-marketplace) Forms 1094-B and 1095-B Filed and sent by the health plan N/A
Small Group fully insured plan (non-marketplace) Forms 1094-B and 1095-B Filed and sent by the health plan N/A
Small Group self-insured plan (non-ALE) Forms 1094-B and 1095-B Employer's responsibility to file and send statements to employees/former employees N/A
ALE fully insured plan Forms 1094-B and 1095-B Filed and sent by the health plan Forms 1094-C and 1095-C (sections I and II only) Employer's responsibility to file and send statements to employees
ALE self-insured plan Forms 1094-C and 1095-C (all sections)
  • Employer's responsibility to file and send statements to employees
  • Self-insured large group plans meet reporting requirements of both section 6055 and 6056 by filing Forms 1094-C and 1095-C

Forms 1094-C and 1095-C (all sections)

  • Employer's responsibility to file and send statements to employees
  • Self-insured large group plans meet reporting requirements of both section 6055 and 6056 by filing Forms 1094-C and 1095-C

Additional forms and information

This information is for general purposes only and is not legal or tax advice. For more detailed information about IRS filings, taxes or legal implications, please contact your professional tax advisor or legal counselor.

The Affordable Care Act imposes new taxes and fees designed to fund many of the health care system changes. Many directly impact employer groups and health insurance companies like Health Net.

Analysis

This annual fee will fund premium subsidies for the health insurance marketplaces and Medicare expansion. It applies to health insurers, health maintenance organizations and entities providing insurance under government programs (e.g., Medi-Cal).

Provision Effective date Applicable to Impact Products affected

Health insurance tax is an annual fee to help fund premium subsidies for the health insurance exchanges and Medicaid expansion.

January 1, 2014, and beyond

Insured plans, including health insurers, HMOs and plans providing insurance under government programs such as Medicaid, Medicare Advantage and Medicare Part D.


  • We expect the impact of the 2014 Health Insurance Tax to be approximately 2.47% of premium. For 2015, we expect health insurer tax to be approximately 3.49% of premium.
  • The total amount to be collected across all health insurers is set at:
    • $8 billion in 2014
    • $11.3 billion in 2015
    • $11.3 billion in 2016
    • $13.9 billion in 2017
    • $14.38 billion in 2018
    • 2019 and forward – The threshold for total fees to be collected will increase annually thereafter based on premium growth.

The fee is based on the net premiums written during the preceding calendar year (for example, the tax due in 2014 will be based on the net premiums written in 2013).

All "covered entities," which include any entity providing health insurance for any U.S. health risk, including medical, dental, vision, behavioral health, and pharmacy plans, the Federal Employees Health Benefit plan, and Medicare Advantage and Part D prescription plans.

Examples of entities and plans exempted from the fee: self-insured groups, governmental entities, Medicare Supplement plans, specific disease insurance, hospital-only indemnity insurance, and long-term care insurance.

Transitional Reinsurance Risk Pool Assessment Fee is an annual fee that will support the transitional reinsurance program established by each state. The intent of the program is to help stabilize premiums and minimize the effects of adverse selection in the individual exchange market.

January 1, 2014, through 2016

Insured plans and self-insured plans2


  • We expect the Transitional Reinsurance Risk Pool Assessment fee to be about $5.25 per member per month based on 2014 membership.1 For 2015, the transitional reinsurance tax is estimated at $3.67 per member per month.
  • The total amount to be collected across all health insurers and self-insured plans is set at:
    • $12 billion in 2014
    • $8 billion in 2015
    • $5 billion in 2016
    • Funds collected for benefit years 2014–2016 will be used for reinsurance payments through 2018.

These fees apply to commercial insured and self-insured plans, including grandfathered and non-grandfathered plans.

Excludes standalone dental and vision plans, Medicare Advantage and Medicare Part D plans, Medicare Supplement plans, Medicaid, and CHIP plans.

Patient-Centered Outcomes Research Institute (PCORI) fees will fund the Patient-Centered Outcomes Research Institute which was established as part of ACA to provide key information that will directly benefit patients by helping them make better health care decisions. Tasked with researching the effectiveness of medical treatments – and the associated risks and benefits – the intent of PCORI's research is to help improve health care delivery outcomes by helping patients gain a better understanding of the care options available to them, as well as the science supporting those options.

October 1, 2012, through September 30, 2019

Insured plans and self-insured plans

The total amount to be collected across all health insurers and self-insured plans is based on each plan's average number of covered lives:

  • $1 multiplied by the average number of covered lives for plan or policy years ending on or after October 1, 2012, and before October 1, 2013.
  • $2 multiplied by the average number of covered lives for plan or policy years ending on or after October 1, 2013.
  • The fee increases after October 1, 2014, are based on a formula that takes into account the increase in the per capita amount of national health expenditures.
  • Health Net will pay the PCORI fees in accordance to ACA provisions for its insured clients as required by law.
  • For self-insured groups, payment of all applicable PCORI fees are the employer group's responsibility.

These fees apply to commercial insured and self-insured plans, including grandfathered and non-grandfathered plans.

1In the state of Oregon, an additional Oregon Reinsurance Fee has also been considered (estimated $4.00 per member per month).

2In December 2013, HHS proposed regulations that would exempt self-insured group health plans from the reinsurance contributions in 2015 and 2016. This exemption does not apply to self-insured plans that use third-party administrators (TPAs) for adjudication, claims adjustment, processing, communication, and other core administrative functions.

Impact to Health Net employer groups

Health Net is making the necessary adjustments to new business and renewal rates. Health Net's allocation of ACA-related fees to a client group's final premium will vary by group based upon the anniversary date of the policy and any differences between initial proposed and final sold rates/plan design.

Since the policy periods for new and renewal business may include revenue and enrollment from two different calendar years, Health Net has elected to prorate, or smooth, the Health Insurance and Reinsurance Contribution fees over the full 12-month policy period by applying a constant load factor for these fees over the 12-month period. This proration, or smoothing, eliminates the need for off-cycle rate changes and stabilizes contributions and plan selections for the group and enrollees.

In the event additional federal or state legislative guidance or regulatory requirements emerge that result in a modification of the estimated impact of the benefit mandates, taxes or fees, Health Net reserves the right to further adjust its premium schedule.

As part of the Affordable Care Act (ACA), high-cost health plans are subject to an excise tax on benefits that exceed the predetermined cost threshold. This excise tax is often called the "Cadillac Tax."

This tax is scheduled to take effect starting in 2020. The amount of the tax is 40% of the amount considered in excess of the cost threshold.

This fact sheet is based on Health Net's current understanding of the excise tax. Final regulations have not been issued, and we expect further IRS guidance before the tax is assessed.

Details Excise Tax
Description
The ACA imposes a permanent annual tax beginning in 2020 on all employers who provide high-cost benefits through a group-sponsored group health plan.
Purpose To slow the growth of health care costs and to help finance the expansion of health coverage. The IRS expects the tax to generate $80 billion over the next 10 years.
Amount
  • The tax on employers is 40% of the cost of plans that exceed predetermined threshold amounts.
  • The plan costs include the total premiums paid by both employers and employees, but not cost-sharing amounts such as deductibles and copayments when care is received.
  • For planning purposes, the thresholds for high-cost plans are $10,200 per year for individual coverage and $27,500 per year for family coverage.
  • These thresholds will be updated for 2020 when final regulations are issued and indexed for inflation in future years.
  • The thresholds will also be adjusted for:
    • High-risk professions such as law enforcement and construction.
    • Group demographics, including age and gender.
  • For pre-65 retirees and individuals in high-risk professions, the threshold amounts are $11,850 per year for individual coverage and $30,950 per year for family coverage.
Who calculates and pays Insured: Employers calculate the tax due on a per-subscriber basis, and insurers submit the tax to the IRS on behalf of their customers.

Self-funded: Employers calculate and pay.
How a plan's cost is determined The tax is based on the total cost of each subscriber's coverage above the threshold amount. The cost includes premiums paid by employers and employees plus:
  • Group and subscriber pre-tax contributions to Health Care Flexible Spending Accounts, Health Reimbursement Accounts and Health Savings Accounts.
  • The cost of onsite medical clinics and wellness programs.
How the tax will be paid Forms and instructions for paying the tax are not yet available.
Tax implications The excise tax is not tax deductible.
Who's impacted All employers providing fully-insured and self-insured coverage.
Coverage not subject to the excise tax
  • U.S.-issued expatriate plans for most categories of expatriates.
  • Standalone dental plans.
  • Standalone vision plans.
  • Accident coverage.
  • Disability benefits.
  • Long-term care insurance.
Next steps Health Net is preparing for implementation and is closely watching for additional IRS guidance. Health Net will provide additional information as updates occur.

How it works

(Examples based on current threshold amounts)

Self-only coverage
Self-only coverage that costs $12,000 per year would pay an annual excise tax of $720
per subscriber:

$12,000 - $10,200 = $1,800 above the $10,200 threshold
$1,800 x 40% = $720

Family Coverage
Family coverage that costs $32,000 each year would pay an annual excise tax of $1,800
per subscriber:

$32,000 - $27,500 = $4,500 above the $27,500 threshold
$4,500 x 40% = $1,800

These charts show how the excise tax increases as the plan's cost increases.

Self-only coverage
Plan cost $11,000 $12,000 $13,000 $14,000 $15,000
Tax $320 $720 $1,120 $1,520 $1,920
Family coverage
Plan cost $28,000 $30,000 $32,000 $34,000 $36,000
Tax $200 $1,000 $1,800 $2,600 $3,400

Health Net of California, Inc., and Health Net Life Insurance Company are subsidiaries of Health Net, LLC. Health Net is a registered service mark of Health Net, LLC. All rights reserved.

The U.S. Departments of Health and Human Services, Labor and the Treasury have set rules for employment-based wellness programs. The rules:

  • Support participatory wellness programs, which generally are available without regard to an individual's health status and include programs that:
    • Reimburse for the cost of membership in a fitness center;
    • Provide a reward to employees for attending a monthly, no-cost health education seminar; or
    • Reward employees who complete a health risk assessment, without requiring them to take further action.
  • Leverage workplace health promotion and prevention as strategy for reducing the burden of chronic illness, improve health and limit growth of health care costs.
  • Safeguard individuals against unfair underwriting practices that could otherwise reduce benefits based on health status.
  • Outline standards for nondiscriminatory "health-contingent wellness programs," which generally reward individuals who meet a specific standard related to their health. Examples include programs that:
    • Provide a reward to those who do not use, or decrease their use of, tobacco, or
    • Reward those who achieve a specified health-related goal such as a specified cholesterol level, weight or body mass index, as well as those who fail to meet such goals but take certain other healthy actions.

The rules are designed to:

  • Ensure flexibility for employers by increasing the maximum reward that may be offered under appropriately designed wellness programs, including outcome-based programs; and
  • Protect consumers by requiring that health-contingent wellness programs be reasonably designed, be uniformly available to all similarly situated individuals, and accommodate recommendations made at any time by an individual's physician based on medical appropriateness.

What are the new coverage requirements?
Most clinical trials involve drugs or devices, generally provided without cost during the trial period. Effective January 1, 2014, the Affordable Care Act (ACA) requires the following provisions:

If a "qualified individual" is in an "approved clinical trial," the plan may not:

  1. Deny the individual participation in an approved clinical trial.
  2. Deny or limit, or impose additional conditions on the coverage of routine patient costs for items or services furnished in connection with participation in the approved clinical trial.
  3. Discriminate against the individual on the basis of their participation in the approved clinical trial.

What is an "approved clinical trial"?
The term "approved clinical trial" is defined as a phase I, phase II, phase III, or phase IV clinical trial conducted in relation to the prevention, detection or treatment of cancer or other life-threatening disease or condition. In addition, an approved clinical trial must also be classed as one of the following:

  1. A federally funded or federally approved trial.
  2. A clinical trial conducted under a U.S. Food and Drug Administration (FDA) investigational new drug application.
  3. A drug trial that is exempt from the requirement of an FDA investigational new drug application.

Who is a "qualified individual"?
A qualified individual is an individual eligible to take part in an approved clinical trial according to the trial protocol with respect to treatment of cancer or another life-threatening disease or condition. To be a qualified individual, there is an additional requirement that a determination be made by the individual's doctor that participation in the approved clinical trial is appropriate to treat the individual's disease or condition.

This determination must offer medical and scientific information establishing that the individual's participation is appropriate.

What is a "life-threatening condition"?
A "life-threatening condition" means any disease or condition which is likely to result in death unless the course of the disease or condition is interrupted.

What are "routine patient costs"?
Routine patient costs include all items and services typically covered by the Plan for a member who is not enrolled in a clinical trial. This does not include the following:

  • Investigational items, devices or services;
  • Items and services provided solely to satisfy data collection and analysis needs and that are not used in the direct clinical management of the patient; or
  • Any services clearly inconsistent with widely accepted and established standards of care for a particular diagnosis.

Does a member need prior authorization from the Plan to take part in a clinical trial?
Yes. A member or their doctor must ask for approval, known as prior authorization, from the Plan before they take part in a clinical trial. The Plan will review the case to make sure the rules are followed.

Is the member required to participate in an approved clinical trial through an in-network provider?
If a member wishes to participate in an approved clinical trial, the Plan may require the member to participate through an in-network provider. This also requires that an in-network provider is holding an approved clinical trial and that they accept the member as a patient in the trial.

Is there coverage for an out-of-network or out-of-state approved clinical trial?
If the Plan already provides coverage for out-of-network services, then clinical trials may also be covered out-of-network. Some plans do not cover any services received out-of-network.

Out-of-state clinical trials may only be covered if there are no clinical trials available in the patient's primary state of residence.

Are there state laws that apply to coverage of approved clinical trials?
Yes. If a state law has requirements that are more generous or provide more protections to patients, health insurance plans in that state will need to comply with the state law as well as the ACA requirements.

Special Enrollment Quick Reference Chart

Life-Changing Qualifying Event (QE) – Mini-Open Enrollment

Any of the following events would allow the subscriber to change plans and/or add him or herself, or his/her dependents, with the effective dates as listed. The application must be received within 60 days of the qualifying event. Proof of the qualifying event is required.

Date of event

Qualifying event Effective date determination Documentation
Newborn Date of event Birth certificate.
Adoption or placement for adoption
(must be routed to case coordinator)
Date of event Court documentation showing date when court order effective.
Assumption of a parent-child relationship
(must be routed to case coordinator)
Date of event Court documentation showing date when court order effective.
Marriage First of the month following date application is received Marriage certificate
Domestic partnership First of the month following date application is received
  • Declaration of domestic partnership.
  • Certificate of registered domestic partnership.

Loss of minimum essential coverage

Includes (but is not limited to) any of the following events, which resulted in a loss of minimum essential coverage, NOT INCLUDING voluntary termination, failure to pay premiums or situations allowing rescission for fraud or intentional misrepresentation of material fact.

Qualifying event Effective date determination Documentation
Loss of coverage due to death of the covered employee.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
One of the following:
  • Prior coverage certificate
  • Front and back of previous carrier's ID card
Loss of coverage due to termination or reduction of hours of the covered employee's employment.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
One of the following:
  • Prior coverage certificate
  • Front and back of previous carrier's ID card
  • Confirmation of work-hour reduction including termination from employer (must be on employer letterhead and signed by employer management)
Loss of coverage due to divorce or legal separation of the covered employee from the employee's spouse.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
One of the following:
  • Prior coverage certificate
  • Front and back of previous carrier's ID card
The enrollee loses a dependent or is no longer considered a dependent through divorce, legal separation or dissolution of domestic partnership as defined by state law in the state in which the divorce, legal separation or dissolution of domestic partnership occurs or if the enrollee or enrollee's dependent dies.
  • In the case of a court order: on the date the court order is effective OR at the option of the qualified individual.
  • If an enrollee or his or her dependent dies: on the first day of the month following the plan selection.
  • Certificate of divorce decree.
  • Legal separation agreement.
The covered employee becoming entitled to benefits under Medicare.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
One of the following:
  • Prior coverage certificate
  • Front and back of previous carrier's ID card
  • Eligibility document
A dependent child ceasing to be a dependent child under the generally applicable requirements of the plan.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
One of the following:
  • Prior coverage certificate
  • Front and back of previous carrier's ID card
  • Max age letter from previous carrier
The enrollee or enrollee's dependent is enrolled in any non-calendar year group health plan or individual health insurance coverage, even if he or she has the option to renew such coverage. The date of the loss of coverage is the last day of the plan or policy year.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
One of the following:
  • Prior coverage certificate
  • Front and back of previous carrier's ID card
Loss of minimum essential coverage for any reason other than failure to pay premiums or situations allowing for a rescission for fraud or intentional misrepresentation of material fact.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
  • Letter from applicant supporting qualifying event.
  • Letter from previous carrier documenting loss of coverage.
Termination of employer contributions.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
Notice from employer of contributions termination.
Exhaustion of COBRA continuation coverage.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
COBRA paperwork reflecting exhaustion of coverage.
Loss of medically needy coverage under Medi-Cal (Medicaid).
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
Medicaid and/or Medi-Cal documentation.
Loss of pregnancy-related coverage under Medicaid and/or Medi-Cal.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
Medicaid and/or Medi-Cal documentation.

Other Qualifying Events

Qualifying event Effective date determination Documentation
The enrollee or enrollee's dependent's enrollment or non-enrollment in a health plan is unintentional, inadvertent, or erroneous and is the result of the error, misrepresentation, misconduct, or inaction of an officer, employee, a non-Exchange entity providing enrollment assistance or conducting enrollment activities, or agent of the Exchange or the Department of Health and Human Services, or its instrumentalities as evaluated and determined by the Exchange.1 Management review and approval.
  • Front and back of previous carrier ID card.
  • Letter from Exchange or HHS documenting qualifying event.
The health plan in which the enrollee or enrollee's dependent is enrolled in substantially violated a material provision of its contract.1 Management review and approval.
  • Resolution document from the Exchange or other plan.
The enrollee demonstrates to the Exchange that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
  • Letter from applicant supporting qualifying event.
  • Letter from previous carrier documenting loss of coverage.
The enrollee is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
Active duty discharge documentation
Release from incarceration
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
Probation or parole release paperwork showing date of event.
The enrollee or enrollee's dependent becomes newly eligible or ineligible for advance payments of the premium tax credit or have a change in eligibility for cost-sharing reductions.1
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
Advanced Premium Tax Credit (APTC) paperwork that shows the premium assistance enrollee is eligible for.
The enrollee is a victim of domestic abuse or spousal abandonment, including a dependent or unmarried victim within a household, and is enrolled in minimum essential coverage and seeks to enroll in coverage separate from the perpetrator of the abuse or abandonment; or is a dependent of a victim of domestic abuse or spousal abandonment, on the same application as the victim.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
A signed written statement under penalty of perjury stating enrollee's name and names of the victims of domestic abuse who enrolled in coverage.
The enrollee or enrollee's dependent applies for coverage through Covered California™ during the annual open enrollment period or due to a qualifying event, is assessed by Covered California as potentially eligible for Medi-Cal, and is determined ineligible for Medi-Cal either after open enrollment has ended or more than 60 days after the qualifying event; or applies for coverage with Medi-Cal during the annual open enrollment period, and is determined ineligible after open enrollment has ended.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
Denial of eligibility letter from Covered California or Medi-Cal.
The enrollee adequately demonstrates to Covered California that a material error related to plan benefits, service area or premium influenced his or her decision to purchase coverage through Covered California.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
A signed written statement under penalty of perjury stating enrollee's name, name of the health plan, what error occurred, and the date on which the error occurred.
The enrollee was receiving services under another health benefit plan, from a contracting provider who is no longer participating in that health plan,for any of the following conditions:
(a) an acute or serious chronic condition,
(b) a terminal illness,
(c) a pregnancy,
(d) care of a newborn between birth and 36 months, or
(e) a surgery or other procedure that has been recommended and documented by the provider to occur within 180 days of the contract's termination date or within 180 days of the effective date of coverage for a newly covered member, and that provider is no longer participating in the health plan.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
  • Letter from health plan that documents the provider's termination from the network.
    AND
  • Letter from provider that documents the condition of the enrollee.
The enrollee or enrollee's dependent gains access to a new health plan as a result of a permanent move.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
Copy of acceptable proof of residency documents:
  • Current driver's license or identification card.
  • Current and valid state vehicle registration form in the applicant's name.
  • Evidence the applicant is employed.
  • Evidence the applicant has registered with a public or private employment agency.
  • Evidence that the applicant has enrolled his or her children in a school.
  • Evidence that the applicant is receiving public assistance.
  • Voter registration form of receipt, voter notification card or an abstract of voter registration.
  • Current utility bill in the applicant's name.
  • Current rent or mortgage payment receipt in the applicant's name. Rent receipts provided by a relative shall not be accepted.
  • Mortgage deed showing primary residency.
  • Lease agreement in the applicant's name.
  • Government mail in the applicant's name (SSA statement, DMV notice, etc.).
  • Cell phone bill.
  • Credit card statement.
  • Bank statement or canceled check with printed name and address.
  • U.S. Postal Service change of address confirmation letter.
  • Moving company contract or receipt showing enrollee's address.
  • If enrollee is living in the home of another person, like a family member, friend, or roommate, enrollee may send a letter/statement from that person stating that he or she lives with them and isn't just temporarily visiting. This person must prove his or her own residency by including one of the documents listed above.
  • If enrollee is homeless or in transitional housing, he or she may submit a letter or statement from another resident of the same state, stating that he or she knows where enrollee lives and can verify that he or she lives in the area and isn't just temporarily visiting. This person must prove their own residency by including one of the documents listed above.
  • Letter from a local non-profit social services provider (excluding nonprofit health care providers) or government entity (including a shelter) that can verify that enrollee lives in the area and isn't just visiting.
The enrollee or enrollee's dependent becomes a citizen, national, or lawfully present individual.
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
  • A copy of enrollee's immigration papers showing his or her name and change of immigration status; or
  • A signed written statement under penalty of perjury stating enrollee's name, and the date in which he or she gained citizenship or lawful presence.
If the enrollee or enrollee's dependent belongs to a federally-recognized American Indian/Alaska Native tribe and is enrolling in a qualified health plan or changing from one qualified health plan to another one time per month.1
  • For applications received between the 1st and 15th, coverage will be effective the first day of the month following submission of application.
  • For applications received between the 16th and month's end, coverage will be effective the first day of the second month following submission of application.
  • Prior coverage certificate.
  • A letter or document on tribal letterhead showing enrollee's name and status as a federally-recognized AI/AN; or
  • A signed written statement under penalty of perjury stating enrollee's name and the tribe in which he or she belongs to.
Type of event SEP submission time frame
All SEPs except loss of coverage
60 days after event
Loss of coverage only
  • 60 days before date of event
  • 60 days after date of event
  • 1These QEs require Health Net management review and approval.

    Health Net of California, Inc. and Health Net Life Insurance Company are subsidiaries of Health Net, LLC. Health Net is a registered service mark of Health Net, LLC. All rights reserved.

    Special Enrollment Quick Reference Chart

    Life-Changing Qualifying Event (QE) – Mini-Open Enrollment

    Any of the following events would allow the subscriber to change plans and/or add him or herself, or his/her dependents, with the effective dates as listed.

    Qualifying event Effective date determination Documentation
    Newborn Date of event
    Birth certificate.
    Adoption or placement for adoption
    (must be routed to case coordinator)
    Date of event

    Court documentation showing date when court order effective.
    Assumption of a parent-child relationship
    (must be routed to case coordinator)
    Date of event Court documentation showing date when court order effective.
    Marriage First of the month following date application is received.
    Marriage certificate
    Domestic partnership First of the month following date application is received.

    • Declaration of domestic partnership.
    • Certificate of registered domestic partnership.

    Loss of minimum essential coverage

    Includes (but is not limited to) any of the following events, which resulted in a loss of minimum essential coverage, NOT INCLUDING voluntary termination, failure to pay premiums or situations allowing rescission for fraud or intentional misrepresentation of material fact.

    Qualifying event Effective date determination Documentation
    Loss of coverage due to death of the covered employee. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. One of the following:
    • Prior coverage certificate.
    • Front and back of previous carrier's ID card
    Loss of coverage due to termination or reduction of hours, of the covered employee's employment. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. One of the following:
    • Prior coverage certificate
    • Front and back of previous carrier's ID card
    • Confirmation of work-hour reduction including termination from employer (must be on employer letterhead and signed by employer management)
    Loss of coverage due to divorce or legal separation of the covered employee from the employee's spouse. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. One of the following:
    • Prior coverage certificate.
    • Front and back of previous carrier's ID card
    The enrollee loses a dependent or is no longer considered a dependent through divorce, legal separation or dissolution of domestic partnership as defined by state law in the state in which the divorce, legal separation or dissolution of domestic partnership occurs or if the enrollee or enrollee's dependent dies. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. One of the following:
    • Front and back of previous carrier's ID card
    • Max age letter from previous carrier.
    The covered employee becoming entitled to benefits under Medicare. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. One of the following:
    • Prior coverage certificate.
    • Front and back of previous carrier's ID card
    • Eligibility document
    A dependent child ceasing to be a dependent child under the generally applicable requirements of the plan. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. One of the following:
    • Prior coverage certificate.
    • Front and back of previous carrier's ID card
    • Max age letter from previous carrier.
    Loss of minimum essential coverage for any reason other than failure to pay premiums or situations allowing for a rescission for fraud or intentional misrepresentation of material fact. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received.
    • Letter from applicant supporting qualifying event.
    • Letter from previous carrier documenting loss of coverage.
    Termination of employer contributions. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. Notice from employer of contributions termination.
    Exhaustion of COBRA continuation coverage. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. COBRA paperwork reflecting exhaustion of coverage.
    Loss of medically needy coverage under Medi-Cal (Medicaid). Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. Medicaid and/or Medi-Cal documentation.
    Loss of pregnancy-related coverage under Medicaid and/or Medi-Cal. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. Medicaid and/or Medi-Cal documentation.
    Losing eligibility for coverage under a Medicaid plan under XIX of the Social Security Act or a state child health plan under XXI of the Social Security Act. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. Medicaid documentation.
    Becoming eligible for assistance under a Medicaid plan or a state child health plan. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. Medicaid documentation.

    Other Qualifying Events

    Qualifying event Effective date determination Documentation
    The enrollee or enrollee's dependent's enrollment or non-enrollment in a health plan is unintentional, inadvertent, or erroneous and is the result of the error, misrepresentation, misconduct, or inaction of an officer, employee, a non-Exchange entity providing enrollment assistance or conducting enrollment activities, or agent of the Exchange or the Department of Health and Human Services, or its instrumentalities as evaluated and determined by the Exchange.1 Management review and approval.
    • Front and back of previous carrier ID card.
    • Letter from Exchange or HHS documenting qualifying event.
    The health plan in which the enrollee or enrollee's dependent is enrolled in substantially violated a material provision of its contract.1 Management review and approval.
    • Resolution document from the Exchange or other plan.
    The enrollee demonstrates to the Exchange that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received.
    • Letter from applicant supporting qualifying event.
    • Copy of the plan renewal letter.
    The enrollee is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. Active duty discharge documentation
    Release from incarceration Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. Probation or parole release paperwork showing date of event.
    The enrollee is a victim of domestic abuse or spousal abandonment, including a dependent or unmarried victim within a household, and is enrolled in minimum essential coverage and seeks to enroll in coverage separate from the perpetrator of the abuse or abandonment; or is a dependent of a victim of domestic abuse or spousal abandonment, on the same application as the victim. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. A signed written statement under penalty of perjury stating enrollee's name and names of the victims of domestic abuse who enrolled in coverage.
    The enrollee or enrollee's dependent applies for coverage through Covered California™ during the annual open enrollment period or due to a qualifying event, is assessed by Covered California as potentially eligible for Medi-Cal, and is determined ineligible for Medi-Cal either after open enrollment has ended or more than 60 days after the qualifying event; or applies for coverage with Medi-Cal during the annual open enrollment period and is determined ineligible after open enrollment has ended. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. Denial of eligibility letter from Covered California or Medi-Cal.
    The enrollee adequately demonstrates to Covered California that a material error related to plan benefits, service area or premium influenced his or her decision to purchase coverage through Covered California. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. A signed written statement under penalty of perjury stating enrollee's name, name of the health plan, what error occurred, and the date on which the error occurred.
    The enrollee was receiving services under another health benefit plan, from a contracting provider who is no longer participating in that health plan, for any of the following conditions:
    (a) an acute or serious chronic condition,
    (b) a terminal illness,
    (c) a pregnancy,
    (d) care of a newborn between birth and 36 months, or
    (e) a surgery or other procedure that has been recommended and documented by the provider to occur within 180 days of the contract's termination date or within 180 days of the effective date of coverage for a newly covered member, and that provider is no longer participating in the health plan.
    Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received.
    • Letter from health plan that documents the provider's termination from the network.
      AND
    • Letter from provider that documents the condition of the enrollee.
    If the enrollee or enrollee's dependent is Native American and enrolling in a qualified health plan or changing from one qualified health plan to another, one time per month.1 Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received.
    • Prior coverage certificate.
    • A letter or document on tribal letterhead showing enrollee's name and status as a federally-recognized AI/AN; or
    • A signed written statement under penalty of perjury stating enrollee's name and the tribe in which he or she belongs to.
    The enrollee or enrollee's dependent gains access to a new health plan as a result of a permanent move. Up to sixty (60) days AFTER date of qualifying event: First of the month following date application is received. Copy of acceptable proof of residency documents:
    • Current driver's license or identification card.
    • Current and valid state vehicle registration form in the applicant's name.
    • Evidence the applicant is employed.
    • Evidence the applicant has registered with a public or private employment agency.
    • Evidence that the applicant has enrolled his or her children in a school.
    • Evidence that the applicant is receiving public assistance.
    • Voter registration form of receipt, voter notification card or an abstract of voter registration.
    • Current utility bill in the applicant's name.
    • Current rent or mortgage payment receipt in the applicant's name. Rent receipts provided by a relative shall not be accepted.
    • Mortgage deed showing primary residency.
    • Lease agreement in the applicant's name.
    • Government mail in the applicant's name (SSA statement, DMV notice, etc.).
    • Cell phone bill.
    • Credit card statement.
    • Bank statement or canceled check with printed name and address.
    • U.S. Postal Service change of address confirmation letter.
    • Moving company contract or receipt showing enrollee's address.
    • If enrollee is living in the home of another person, like a family member, friend, or roommate, enrollee may send a letter/statement from that person stating that he or she lives with them and isn't just temporarily visiting. This person must prove his or her own residency by including one of the documents listed above.
    • If enrollee is homeless or in transitional housing, he or she may submit a letter or statement from another resident of the same state, stating that he or she knows where enrollee lives and can verify that he or she lives in the area and isn't just temporarily visiting. This person must prove their own residency by including one of the documents listed above.
    • Letter from a local non-profit social services provider (excluding nonprofit health care providers) or government entity (including a shelter) that can verify that enrollee lives in the area and isn't just visiting.
    Type of event SEP submission time frame
    All SEPs except loss of coverage
    60 days after event
    Loss of coverage only
  • 60 days before date of event
  • 60 days after date of event
  • 1These QEs require Health Net management review and approval.

    Health Net of California, Inc. and Health Net Life Insurance Company are subsidiaries of Health Net, LLC. Health Net is a registered service mark of Health Net, LLC. All rights reserved.

    Special Enrollment Quick Reference Chart

    Life-Changing Qualifying Event (QE) – Mini-Open Enrollment

    Any of the following events would allow the subscriber to change plans and/or add him or herself, or his/her dependents, with the effective dates as listed.

    Qualifying event Effective date determination Documentation
    Newborn Date of event
    OR
    At qualified individual's election, the first of the month following the date of birth, adoption or placement for adoption.
    Birth certificate.
    Adoption or placement for adoption
    (must be routed to case coordinator)
    Date of event
    OR
    At qualified individual's election, the first of the month following the date of birth, adoption or placement for adoption.
    Court documentation showing date when court order effective.
    Assumption of a parent-child relationship
    (must be routed to case coordinator)
    Date of event Court documentation showing date when court order effective.
    Marriage First of the month following date application is received. Marriage certificate
    Domestic partnership First of the month following date application is received.
    • Declaration of domestic partnership.
    • Certificate of registered domestic partnership.

    Loss of minimum essential coverage

    Includes (but is not limited to) any of the following events, which resulted in a loss of minimum essential coverage, NOT INCLUDING voluntary termination, failure to pay premiums or situations allowing rescission for fraud or intentional misrepresentation of material fact.

    Qualifying event Effective date determination Documentation
    Loss of coverage due to death of the covered employee. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. One of the following:
    • Front and back of previous carrier's ID card
    Loss of coverage due to termination or reduction of hours, of the covered employee's employment. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. One of the following:
    • Prior coverage certificate
    • Front and back of previous carrier's ID card
    • Confirmation of work-hour reduction including termination from employer (must be on employer letterhead and signed by employer management)
    Loss of coverage due to divorce or legal separation of the covered employee from the employee's spouse. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. One of the following:
    • Front and back of previous carrier's ID card
    The enrollee loses a dependent or is no longer considered a dependent through divorce, legal separation or dissolution of domestic partnership as defined by state law in the state in which the divorce, legal separation or dissolution of domestic partnership occurs or if the enrollee or enrollee's dependent dies. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. One of the following:
    • Front and back of previous carrier's ID card
    • Max age letter from previous carrier.
    The covered employee becoming entitled to benefits under Medicare. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. One of the following:
    • Front and back of previous carrier's ID card
    • Eligibility document
    A dependent child ceasing to be a dependent child under the generally applicable requirements of the plan. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. One of the following:
    • Front and back of previous carrier's ID card
    • Max age letter from previous carrier.
    Loss of minimum essential coverage for any reason other than failure to pay premiums or situations allowing for a rescission for fraud or intentional misrepresentation of material fact. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received.
    • Letter from applicant supporting qualifying event.
    • Letter from previous carrier documenting loss of coverage.
    Termination of employer contributions. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. Notice from employer of contributions termination.
    Exhaustion of COBRA continuation coverage. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. COBRA paperwork reflecting exhaustion of coverage.
    Loss of medically needy coverage under Medi-Cal (Medicaid). Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. Medicaid and/or Medi-Cal documentation.
    Loss of pregnancy-related coverage under Medicaid and/or Medi-Cal. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. Medicaid and/or Medi-Cal documentation.
    Losing eligibility for coverage under a Medicaid plan under XIX of the Social Security Act or a state child health plan under XXI of the Social Security Act. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. Medicaid documentation.
    Becoming eligible for assistance under a Medicaid plan or a state child health plan. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. Medicaid documentation.

    Other Qualifying Events

    Qualifying event Effective date determination Documentation
    The enrollee or enrollee's dependent's enrollment or non-enrollment in a health plan is unintentional, inadvertent, or erroneous and is the result of the error, misrepresentation, misconduct, or inaction of an officer, employee, a non-Exchange entity providing enrollment assistance or conducting enrollment activities, or agent of the Exchange or the Department of Health and Human Services, or its instrumentalities as evaluated and determined by the Exchange.1 Management review and approval.
    • Front and back of previous carrier ID card.
    • Letter from Exchange or HHS documenting qualifying event.
    The health plan in which the enrollee or enrollee's dependent is enrolled in substantially violated a material provision of its contract.1 Management review and approval.
    • Resolution document from the Exchange or other plan.
    The enrollee demonstrates to the Exchange that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received.
    • Letter from applicant supporting qualifying event.
    • Copy of the plan renewal letter.
    The enrollee is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. Active duty discharge documentation
    Release from incarceration Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. Probation or parole release paperwork showing date of event.
    The enrollee is a victim of domestic abuse or spousal abandonment, including a dependent or unmarried victim within a household, and is enrolled in minimum essential coverage and seeks to enroll in coverage separate from the perpetrator of the abuse or abandonment; or is a dependent of a victim of domestic abuse or spousal abandonment, on the same application as the victim. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. A signed written statement under penalty of perjury stating enrollee's name and names of the victims of domestic abuse who enrolled in coverage.
    The enrollee or enrollee's dependent applies for coverage through Covered California™ during the annual open enrollment period or due to a qualifying event, is assessed by Covered California as potentially eligible for Medi-Cal, and is determined ineligible for Medi-Cal either after open enrollment has ended or more than 60 days after the qualifying event; or applies for coverage with Medi-Cal during the annual open enrollment period, and is determined ineligible after open enrollment has ended. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. Denial of eligibility letter from Covered California or Medi-Cal.
    The enrollee adequately demonstrates to Covered California that a material error related to plan benefits, service area or premium influenced his or her decision to purchase coverage through Covered California. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. A signed written statement under penalty of perjury stating enrollee's name, name of the health plan, what error occurred, and the date on which the error occurred.
    The enrollee was receiving services under another health benefit plan, from a contracting provider who is no longer participating in that health plan, for any of the following conditions:
    (a) an acute or serious chronic condition,
    (b) a terminal illness,
    (c) a pregnancy,
    (d) care of a newborn between birth and 36 months, or
    (e) a surgery or other procedure that has been recommended and documented by the provider to occur within 180 days of the contract's termination date or within 180 days of the effective date of coverage for a newly covered member, and that provider is no longer participating in the health plan.
    Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received.
    • Letter from health plan that documents the provider's termination from the network.
      AND
    • Letter from provider that documents the condition of the enrollee.
    If the enrollee or enrollee's dependent belongs to a federally-recognized American Indian/Alaska Native tribe and is enrolling in a qualified health plan or changing from one qualified health plan to another one time per month.1 Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received.
    • Prior coverage certificate.
    • A letter or document on tribal letterhead showing enrollee's name and status as a federally-recognized AI/AN; or
    • A signed written statement under penalty of perjury stating enrollee's name and the tribe in which he or she belongs to.
    The enrollee or enrollee's dependent gains access to a new health plan as a result of a permanent move. Up to thirty (30) days AFTER date of qualifying event: First of the month following date application is received. Copy of acceptable proof of residency documents:
    • Current driver's license or identification card.
    • Current and valid state vehicle registration form in the applicant's name.
    • Evidence the applicant is employed.
    • Evidence the applicant has registered with a public or private employment agency.
    • Evidence that the applicant has enrolled his or her children in a school.
    • Evidence that the applicant is receiving public assistance.
    • Voter registration form of receipt, voter notification card or an abstract of voter registration.
    • Current utility bill in the applicant's name.
    • Current rent or mortgage payment receipt in the applicant's name. Rent receipts provided by a relative shall not be accepted.
    • Mortgage deed showing primary residency.
    • Lease agreement in the applicant's name.
    • Government mail in the applicant's name (SSA statement, DMV notice, etc.).
    • Cell phone bill.
    • Credit card statement.
    • Bank statement or canceled check with printed name and address.
    • U.S. Postal Service change of address confirmation letter.
    • Moving company contract or receipt showing enrollee's address.
    • If enrollee is living in the home of another person, like a family member, friend, or roommate, enrollee may send a letter/statement from that person stating that he or she lives with them and isn't just temporarily visiting. This person must prove his or her own residency by including one of the documents listed above.
    • If enrollee is homeless or in transitional housing, he or she may submit a letter or statement from another resident of the same state, stating that he or she knows where enrollee lives and can verify that he or she lives in the area and isn't just temporarily visiting. This person must prove their own residency by including one of the documents listed above.
    • Letter from a local non-profit social services provider (excluding nonprofit health care providers) or government entity (including a shelter) that can verify that enrollee lives in the area and isn't just visiting.
    Type of event SEP submission time frame
    All SEPs except loss of coverage
    30 days after event
    Loss of coverage only
  • 30 days before date of event
  • 30 days after date of event
  • 1These QEs require Health Net management review and approval.

    Health Net of California, Inc. and Health Net Life Insurance Company are subsidiaries of Health Net, LLC. Health Net is a registered service mark of Health Net, LLC. All rights reserved.

    Last Updated: 11/02/2023