Covered CA Director abruptly resigns

Covered CA Director abruptly resigns

Only 24 hours after meeting with small business owners at an early morning coffee arranged by state Sen. Bill Monning, D-Carmel, Covered California’s Sales Director Michael Lujan resigned. Insurance agents liked him because he was responsive to industry questions and frequently met with businesses affected by the new program, which was created to administer the Patient Protection and Affordable Care Act, more commonly known as Obamacare.

He was a 25-year veteran of the insurance industry, including a stint as small group sales director for Blue Shield of California, yet has come under criticism from many in the industry.


According to insurance agent Kevin Kaus, “In the conservative world of insurance, any agent that supports anything less than a totally unregulated insurance market place is viewed as some sort of socialist. Lujan has taken his fair share of push back and was successfully educating agents on how their skills and resources were necessary to reach families and small business about the new insurance options offered from Covered California.”

Covered California

Joined by Monning in Santa Cruz and Aptos on Wednesday, Lujan met with local business owners and discussed what to expect as major provisions of the new health care law go into effect in January.

“’We’re creating a culture of coverage,” Lujan said, the Santa Cruz Sentinel reported. “There is no mandate for small businesses to offer health insurance. There are no fines except for individuals. The employer penalty has been delayed to 2015.”

This occurs as California continues taking the lead in implementing Obamacare. Its health care insurance “exchanges,” which are being set up by legislation signed by Gov. Arnold Schwarzenegger in 2010, serve as a model for exchanges in other states.

But, according to  a joint statement by the IRS and the Department of Health and Human Services, “Starting in 2014, the individual shared responsibility provision calls for each individual to have basic health insurance coverage (known as minimum essential coverage), qualify for an exemption, or make a shared responsibility payment when filing a federal income tax return.”

So if you sign up for a healthcare plan through an employer, you are exempted from participating in Obamacare. But if you have an employer plan available, and do not sign up, you will be taxed and penalized. There are some exceptions. For example, military veterans do not need to sign up because they can use the Veterans Administration for medical care.

It is important to note that the Congressional Budget Office projects only 2 percent of Americans will actually pay the “mandatory” fine for non-participation.

California’s Obamacare spin

In a May interview with the Business Journal, Lujan explained how California’s health insurance plan will work:

Question: “What will be different about Small Business Health Options Program from what small employers have today?”

Lujan: “Employee choice. Larger employers have (had) it for years and small employers can offer this today — except this flexibility currently requires higher premiums. The rules change in 2014, when employers can offer multiple plan types from multiple companies through the Small Business Health Options Program, all in one online shopping experience and on a single bill to the employer.”

But some of the business owners at the coffee meeting with Monning and Lujan weren’t so excited about the mandatory government health care plan, the Sentinel reported. As if to assuage their concerns, Lujan reminded them that, even if Obamacare is repealed at the federal level, California likely would continue with its own health insurance exchanges.

“’It’s a state law,” he said. “For California we’re going ahead anyway. California would have to [repeal] it at the state level.”

And then, the following morning, Lujan resigned.

Bailing out

A spokesman explained to media that Lujan will leave Covered California Aug. 9, but didn’t have details on whether Lujan had specific plans or another job lined up. But a return to the private sector would put him in a position to benefit heartily in the health care industry, now that he has worked as an insider in government.

“Now that he has accomplished what he came for, he intends to resume his career in the private sector,” said Santiago Lucero, the exchange’s spokesman.

“I am proud to have played a small role in the development of our state exchange and grateful for the opportunity to apply my industry experience to my role at Covered California,” Lujan said in a statement released by the agency. “I can leave with confidence knowing that our SHOP staff, sales team and agents are prepared for success and ready to get California enrolled.”


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  1. Let It Collapse
    Let It Collapse 1 August, 2013, 10:48

    In all honesty I sort of feel sorry for Lujan. The man was just a messenger doing his job. Since he worked for the state he had to push this new healthcare system to the business community. And they didn’t like what he told them. No win for Lujan.

    ObamaCare is a train wreck in motion. Now all the provisions (LAWS) are being changed mid-stream to benefit the corporations. But the commmon working joe who has the bucks to buy a health care insurance package is just getting bludgeoned. His premiums are going to skyrocket to subsidize the poor, which is growing by leaps and bounds in California. Wait until amnesty get approved. And if Joe6Pack refuses to buy insurance the IRS agents (who are demanding exemption from the ObamaCare mandate) will knock on your door and order you to pay a stiff penalty. So the bottom line: If you’re not getting free health care in California – why stay here? It’s a big country.

    Reply this comment
  2. Ron Keffer
    Ron Keffer 1 August, 2013, 18:06

    We had free education provided by the State of California…… what happened to it

    Reply this comment
  3. RT
    RT 1 August, 2013, 19:40

    So the same state that runs the much sued and inefficient “Medi-Cal” behemoth is now going to run “Covered California”. Boy I cannot foresee any problems with that……

    Reply this comment
  4. SCA
    SCA 4 August, 2013, 10:42

    There has to be more to this story. The spokesperson for CoveredCA said “Now that he has accomplished what he came for, he intends to resume his career in the private sector.” The exchange isn’t even open yet.

    Reply this comment

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