Why employers need to be aware of the changes on the way for Medi-Cal

Expansion of Medi-Cal under the Affordable Care Act (ACA) was expected to generate as many as 2 million new enrollees by the end of 2014. With 1.9 million consumers already registered for the program by the end of March, however, and an additional 900,000 applications pending, the response has been even greater than anticipated.

Medi-Cal is California’s version of Medicaid and has been around since 1966. It was created to provide government sponsored free or low-cost health coverage for California residents who meet eligibility requirements. Effective Jan. 1, 2014, Medi- Cal and Denti-Cal (government sponsored dental care) is available to everyone in California with an income below 138 percent of the federal poverty line.

For children, it is available up to 266 percent of their parents’ federal poverty level, meaning that children may still qualify for the plan, even if their parents do not.

“Some employers may have employees and/or children that qualify for Medi-Cal,” says Ron Filice, president and CEO of Filice Insurance. “This no-cost option can help relieve the employee of the burden of paying employee contributions each month and it can help the employer save money for each employee that chooses not to enroll with the employer sponsored health plan.”

Smart Business spoke with Filice about why employers need to take note of what is happening with Medi-Cal.

How does Medi-Cal work with employer health plans?

Medi-Cal eligibility is based on the income from an individual’s tax return, without consideration of health insurance offered by an employer. So if someone is eligible for Medi-Cal, they have the option to choose

between the employer plan or Medi-Cal. All of the health plans offered by Medi-Cal include the same ‘essential health benefits’ offered under the ACA. Many individuals who enroll in Medi-Cal have no premium, no co-payment and no out-of-pocket costs.

In some cases, households will see affordable costs such as a low monthly premium. The overall intent, however, is to keep the program in line with its original goal of providing coverage for those who couldn’t otherwise afford it.

How are children covered through the Medi- Cal program?

The eligibility rules for Medi-Cal children are different than they are for adults.

They are meant to ensure that no child lacks affordable health care coverage. This makes Medi-Cal a valuable option for low wage-earning employees to consider when evaluating their health insurance options, as well as an important benefit for their company. It also provides peace of mind for an employee worried about ensuring that his or her children will have access to the medical care that they need.

What about dental coverage?

There has been an expansion of Denti-Cal. It offers more services with participating dentists including exams and X-rays, cleanings, fluoride treatments, fillings, front-teeth root canals, crowns, dentures and other essential dental services.

How does Medi-Cal work with Covered California?

Under federal law, if someone is currently enrolled in or eligible for Medi-Cal, that individual is ineligible to purchase subsidized coverage through Covered California. If the person is eligible for Medi-Cal, he or she can still purchase an individual health plan. But these individuals cannot receive premium assistance to reduce the cost and will have to pay the plan’s full premium.

Medi-Cal is health coverage, just like the coverage offered through Covered California. Medi-Cal provides benefits similar to the coverage options available through Covered California, but often at lower or no cost. Depending on the county of enrollment, Medi-Cal enrollees may even have a managed health care plan through a private insurance carrier such as Anthem or Kaiser.

How can employers help employees choose the best option to meet their needs?

The laws regarding who qualifies for a subsidy are confusing. It is in the best interest of an employer to work with a third- party benefits consultant or other expert that can provide an outreach program for their employees.

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