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Covered California Rates are on the Rise

With the news reporting 24 percent increases to some health plans under Covered California it is important to stay up to date on these changes.

Although this news is disappointing to hear, it is not a surprise. If an individual has never been educated or does not understand the risk of not having health insurance and they are healthy, it is unlikely they will enroll. Those enrolling for the first time are likely higher utilizers due to deferred care. Individuals who are responsible and understand the value of health insurance need to enroll to balance out the utilization. The penalty in 2016 for not having health insurance is 2.5% of income or $695 (indexed), whichever is greater and it is not tax deductible. With the expansion of Medi-Cal those earning less than $33,500 may qualify.

This does beg the bigger question: If you have a company with two or more employees, why wouldn’t you offer health insurance? It is tax deductible to the employer and it is tax free to the employee. If you chose to pay a higher wage and your company has fewer than 50 employees, you may inadvertently disqualify your employees from qualifying for a financial subsidy through Covered CA. Employees are paying a penalty that is not tax deductible and they have absolutely no security.

Group health insurance may be more affordable than you realize. Lets’ talk.

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