6.3 California State Insurance Programs
Key Takeaways
- Medi-Cal is California's Medicaid program; adult expansion eligibility runs to 138% of the Federal Poverty Level and benefits include dental and vision.
- Covered California is the state marketplace, selling Bronze/Silver/Gold/Platinum metal-tier plans (60/70/80/90% actuarial value) with premium tax credits.
- Under SB 951, California SDI and Paid Family Leave now replace 70-90% of wages; SDI lasts up to 52 weeks and PFL up to 8 weeks.
- CLHIGA caps life death-benefit coverage at 80% up to $300,000, cash value 80% up to $100,000, and annuity present value 80% up to $250,000.
- Producers may not use CLHIGA guaranty coverage as a sales inducement or compare it to FDIC insurance.
Medi-Cal — California's Medicaid
Medi-Cal is the state's joint federal-state Medicaid program providing comprehensive coverage to low-income residents. Producers must be able to recognize when a client belongs in Medi-Cal rather than a private or marketplace plan.
| Population | Approximate income limit |
|---|---|
| Adults (ACA expansion) | 138% of Federal Poverty Level (FPL) |
| Pregnant individuals | ~213% FPL |
| Children (Medi-Cal/CHIP) | Higher, scaled by age |
| Aged, blind, disabled | SSI-related rules |
Medi-Cal benefits exceed many states': physician and hospital care, prescription drugs, mental-health and substance-use services, dental (Denti-Cal), vision, long-term care, maternity, and preventive services. As of 2024 California extended full-scope Medi-Cal to all income-eligible residents regardless of immigration status.
Trap: A person eligible for Medi-Cal generally is not eligible for Covered California premium tax credits. Don't sell a subsidized marketplace plan to someone who qualifies for Medi-Cal.
Covered California — The Marketplace
Covered California is the state-run health insurance exchange created under the Affordable Care Act.
| Feature | Description |
|---|---|
| Individual & family plans | Qualified Health Plans (QHPs) |
| Small Business (SHOP) | Employers of 1-100 employees |
| Premium tax credits | Federal subsidies for eligible buyers |
| Cost-sharing reductions | Lower out-of-pocket on Silver plans only |
Metal Tiers
| Tier | Actuarial value (plan pays) |
|---|---|
| Bronze | ~60% |
| Silver | ~70% |
| Gold | ~80% |
| Platinum | ~90% |
Higher metal tiers carry higher premiums but lower out-of-pocket costs. Cost-sharing reductions attach only to Silver plans, so a subsidy-eligible buyer who picks Bronze forfeits that extra help — a frequent exam point.
Special Enrollment Periods
Outside open enrollment, a qualifying life event opens a 60-day special enrollment window: loss of other coverage, marriage/divorce/domestic partnership, birth or adoption, a permanent move to a new service area, or gaining lawful residency or citizenship.
State Disability Insurance and Paid Family Leave
California's State Disability Insurance (SDI) pays short-term benefits for non-work-related illness, injury, or pregnancy, funded entirely by employee payroll deductions. Senate Bill 951, fully effective for claims beginning January 1, 2025, raised the wage-replacement rate.
| Feature | Current rule |
|---|---|
| Wage replacement | 70-90% of wages (lower earners get ~90%, higher earners ~70%) |
| Maximum duration (SDI) | Up to 52 weeks |
| 2026 maximum weekly benefit | about $1,765 |
| Waiting period | None as of 2025 (the former 7-day wait was eliminated) |
| Funding | Employee SDI payroll deduction (no taxable wage ceiling since 2024) |
Correction flag: Older study material lists 55-60% wage replacement and a 7-day waiting period. Under SB 951 the rate is now 70-90% and there is no waiting period — use the current figures.
Paid Family Leave (PFL)
PFL is the wage-replacement arm of SDI for bonding with a new child or caring for a seriously ill family member, plus qualifying military-family needs.
| Feature | Rule |
|---|---|
| Duration | Up to 8 weeks in a 12-month period |
| Wage replacement | Same 70-90% SB 951 formula |
| Job protection | PFL pays benefits but does not itself guarantee the job; job protection comes from CFRA/FMLA |
Voluntary Plans (VP): an employer may replace state SDI with a private plan that meets or exceeds every SDI benefit and is approved by the EDD; it remains employee-funded.
Long-Term Care Partnership Program
California's LTC Partnership Program rewards buyers of qualifying long-term-care policies with Medi-Cal asset protection.
- Buy a Partnership-certified LTC policy (sold only by trained, certified producers).
- Draw benefits for qualifying care.
- If policy benefits exhaust, apply for Medi-Cal.
- Disregard assets dollar-for-dollar equal to the LTC benefits paid out.
| Without Partnership | With Partnership |
|---|---|
| Spend down to ~$2,000 to qualify | Protect assets equal to benefits paid |
| Standard Medi-Cal recovery applies | Sheltered assets exempt from estate recovery |
Partnership policies must include age-based inflation protection (compound inflation for buyers under 70).
CLHIGA — The Guaranty Association
The California Life and Health Insurance Guarantee Association (CLHIGA) pays covered claims when a member insurer becomes insolvent. It protects California residents who hold policies from licensed insurers. The statutory limits are far lower than the inflated figures in many study guides.
| Coverage type | CLHIGA limit |
|---|---|
| Life insurance death benefit | 80% of the benefit, up to $300,000 per life |
| Life net cash surrender value | 80% of value, up to $100,000 |
| Annuity present value | 80% of value, up to $250,000 per contract |
| Aggregate life + annuity, one person | $300,000 total |
| Health insurance / disability / LTC | 80% of covered claims, subject to statutory limits |
Correction flag: Earlier versions of this guide listed a flat $500,000 life death-benefit limit. That is wrong. CLHIGA pays 80% of the death benefit, capped at $300,000, with an overall $300,000 life-plus-annuity ceiling per individual.
What CLHIGA Does Not Cover
- Surplus-lines and unlicensed-insurer policies
- Self-funded employer (ERISA) plans
- The investment/separate-account portion of variable products
- Amounts above the statutory caps
- Certain guaranteed-interest amounts above a benchmark rate
Producer Advertising Ban
Producers and insurers may not use CLHIGA as a sales inducement. Specifically, you cannot:
- Mention guaranty-association coverage to sell or solicit a policy
- Compare CLHIGA to FDIC bank insurance
- Imply a policy is "guaranteed" or "insured by the state"
Violating the advertising ban is an unfair trade practice subject to discipline by the California Department of Insurance.
Producer Responsibilities With State Programs
Do: stay current on Medi-Cal, Covered California, SDI/PFL, and Partnership rules; refer clients to the right resource; compare private and public options honestly.
Do not: guarantee program eligibility, give tax or legal advice, discourage suitable private coverage, or misstate program benefits. Producers should document recommendations and refer complex eligibility or estate-recovery questions to qualified counsel.
Under SB 951, what share of wages does California SDI/PFL now replace?
What is CLHIGA's maximum coverage for an individual life insurance death benefit?
May a California producer mention CLHIGA guaranty protection to help close a sale?
On Covered California, cost-sharing reductions (lower out-of-pocket costs) attach to which metal tier?
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