Covered California and Medicaid Overlap: Understanding Your Options and Avoiding Financial Penalties

What is Covered California and Medicaid?

Covered California is California’s health insurance marketplace, established under the Affordable Care Act (ACA). It allows individuals and families to purchase health insurance plans that meet specific standards and offer financial assistance to those who qualify. Medicaid, on the other hand, is a government-funded health insurance program for low-income individuals, families, and certain disabled persons.

Overlapping Health Insurance Coverage

If an individual has overlapping health insurance coverage, meaning they are enrolled in both a Medicaid plan and a private health insurance plan, they may face penalties from the IRS. This is because receiving government-funded health insurance when ineligible can result in tax penalties.

The Importance of Disenrollment

To avoid potential penalties, it is crucial to disenroll from Medicaid when you become eligible for other health insurance coverage, such as employer-sponsored insurance. This should be done promptly to prevent any overlap in coverage.

Penalty for Overlapping Coverage

If an individual receives Medicaid benefits for a period when they were not eligible, they may be required to repay those benefits and face additional penalties. The penalty amount can vary depending on the individual’s income and the length of time of the overlap.

How to Disenroll from Medicaid

Disenrolling from Medicaid in California can be done by contacting Covered California directly. There are several ways to contact Covered California, including by phone, online, or through their local enrollment center. It is important to provide accurate information when disenrolling to ensure that your coverage is terminated correctly and to avoid any potential penalties.

Seeking Professional Assistance

If you have questions about your health insurance coverage or need assistance with disenrolling from Medicaid, there are licensed agents available to provide guidance and support. These agents can help ensure that you understand your coverage options and avoid costly penalties.

Additional Information

For more information about Covered California and Medicaid, refer to the following resources:

Covered California: https://www.coveredca.com/
Medicaid: https://www.dhcs.ca.gov/services/Pages/Medicaid.aspx