How does CalPERS work with Covered California?

November 30, 2014 11:27 PM

Dream job pays $35k/year, health insurance is mandatory through CalPERS at $750/month (no employer contribution.) Since that would be more than 9.5% of my income, it looks like Covered California would kick in a subsidy. How does that work-- what do I ask for?

Or would I be able to choose a marketplace plan instead and bypass CalPERS completely? I've purchased insurance on the marketplace in the past, but have not sought premium assistance (is that a thing? It looks like a thing from the CoveredCA website.) In the event that I am offered this job, I don't want to turn it down because of mere money, but I literally can't afford to take it if the health insurance costs $750/month, so I need to be prepared.

So let me boil down my question--

1) Is premium assistance for employer-based insurance available? If so, what do I ask for when applying at CoveredCA?

2) I also have the option of insuring myself through a spouse (should one suddenly appear) or "Obamacare." This, the cost of insurance through CalPERS, and the fact that it's mandatory is the extent of the information provided in the job description. Does this mean I can decline insurance if I go with a CoveredCA plan? How does that work outside of open enrollment for CoveredCA?

posted by blnkfrnk to Work & Money (4 answers total)

These are all questions that you need to ask the HR recruiter at Dream Job.

While negotiating your salary, ask your questions. "This salary is already pretty thin, requiring me to purchase this particular insurance puts me at a significant financial disadvantage, what are my options for off-setting this cost?"

It's not a dream job if it's financially unfeasible.

Frankly, with that low a salary ANYWHERE in California, they're preying upon the idealistic to accept slave wages because the job is someone's dream.

I PROMISE putting yourself in the position of accepting such a low salary with this condition....you will regret it later when you need more money to support a family.

Also, some state government jobs don't contribute to Social Security. It's been fashionable to pooh-pooh the fact that you may not get any SS back, but it's a big deal. I scoffed when I was in my twenties, but as I get older, I count on it more.

There may be other perks. There may be a pension, or some other contributions. Make sure you understand EVERYTHING about the financial aspects of this job.

Please reconsider.
posted by Ruthless Bunny at 6:19 AM on December 1, 2014 [7 favorites]

Response by poster: Thank you for your concern, but please accept that for my life at this time, it's a major step up (an add'l 12k a year, weekends off, no night shift!) and a first step into my field of choice. So yes, I'll ask HR, but I'd like more information about CoveredCA before go into that process.
posted by blnkfrnk at 8:39 AM on December 1, 2014 [1 favorite]

Best answer: Here is a CalPERS page on Health Insurance Exchange/Covered California.

Can I opt out of CalPERS and go to the Exchange?

You may choose to opt out of your employer-sponsored health benefits to purchase health benefits as an individual through Covered California. If you purchase benefits through Covered California when you have affordable employer-sponsored health benefits available, you will almost certainly lose your employer health contribution. In addition, you most likely will not qualify for premium tax subsidies or cost-sharing reductions.

But yes, you need to talk with HR about this.
posted by Snerd at 10:59 AM on December 1, 2014

Best answer: You are eligible for a subsidy on an Obamacare exchange plan if your employer's plan requires you to pay more than 9.5% of your household income. 9.5% is the ACA definition of affordable. You certainly seem to qualify if your numbers are right because the employer's plan is more than 25% of your income.

Your employer is required to provide a determination of your eligibility for Obamacare and from what you say they have done that. So Obamacare should be a much better deal for you because you should qualify for subsidies.

You can maximize subsidies by minimizing your reported income. The income for determining the amount of your subsidy is not your gross pay but your adjusted gross income. You can reduce your adjusted gross by putting as much money as possible into a traditional (not Roth) IRA and also contributing as much as possible to your 401(k) or Calpers retirement plan.

So you should check with CoveredCA to determine the right amount of subsidy for which you are eligible. Enrollment for CoveredCA is open right now until the end of January, so that shouldn't be a problem. If you change your job after January, that would also generally be considered a qualifying event to allow enrollment.
posted by JackFlash at 11:09 AM on December 1, 2014