The State of California is working to reduce the number of uninsured families with the adoption of a new state individual health care mandate.
Here are three things California residents need to know:
1. Make sure you have health coverage
The mandate, which takes effect on January 1, 2020, requires Californians to have qualifying health insurance coverage throughout the year.
Many people already have qualifying health insurance coverage, including employer-sponsored plans, coverage purchased through Covered California or directly from insurers, Medicare, and most Medicaid plans.
Under the new mandate, those who fail to maintain qualifying health insurance coverage could face a financial penalty unless they qualify for an exemption.
Generally speaking, a taxpayer who fails to secure coverage will be subject to a penalty of $695 when they file their 2020 state income tax return in 2021. The penalty for a dependent child is half of what it would be for an adult.
The penalty is based on your state income and the number of people in your household.
Summary of possible penalties
|Household Size||If You Make Less Than You May Pay|
|Family of 4||$140,200||$2,085|
To avoid a penalty, California residents need to have qualifying health insurance for themselves, their spouse or domestic partner, and their dependents for each month beginning on January 1, 2020.
The open enrollment period to sign up for health care coverage through Covered California is scheduled for October 15, 2019 through January 31, 2020.
2. Exemptions available
There are exemptions to the penalty, and families will not have to pay a penalty if the cost of their health care coverage exceeds a certain percentage of their income.
Most exemptions from the mandate will be claimed when filing 2020 state income tax returns in early 2021. Additional exemptions from the mandate will be granted through Covered California beginning in January 2020.
- Income is below the tax filing threshold
- Health coverage is considered unaffordable (exceeded 8.24% of household income for the 2020 taxable year)
- Families’ self-only coverage combined cost is unaffordable
- Short coverage gap of 3 consecutive months or less
- Certain non-citizens who are not lawfully present
- Certain citizens living abroad/residents of another state or U.S. territory
- Members of health care sharing ministry
- Members of federally-recognized Indian tribes including Alaskan Natives
- Incarceration (other than incarceration pending the disposition of charges)
- Enrolled in limited or restricted-scope Medi-Cal or other coverage from the California Department of Health Care Services
3. Financial assistance available
To help Californians meet the requirement to have insurance coverage, the state will provide financial assistance to qualifying individuals and families, dependent on their household size and income, through Covered California. This new state financial assistance will be in addition to federal financial assistance some already receive through Covered California.
Options for no-and low-cost coverage are also available through the Medi-Cal program.
To find out more about health insurance options and financial assistance, visit CoveredCA.com.