714.716.4060 Login
Let's Talk

Live in California? Starting in 2020, are you aware that you may pay a financial penalty for not having health care insurance?

January 10, 2020

Even though the federal requirement for individuals to enroll in health insurance or be penalized has been removed, the state of California has introduced the same requirement, requiring all Californians to be enrolled in a health plan or be penalized effective 1/1/2020,

Here are three things California residents need to know:

1.Make sure you have health insurance 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, including employer-sponsored plans, individual coverage purchased through Covered CA or directly from health insurers, Medicare and most Medicaid plans.

Under the new CA mandate, those who fail to maintain qualifying health insurance coverage could face financial penalty unless they qualify for an exemption. Generally, a taxpayer who fails to secure coverage will be subject to a penalty of $695 or 2% of income, whichever is greater, 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.

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 to sign up for health coverage with California insurers ends on January 31, 2020 for an effective date of February 1, 2020. Californians may then have to wait until next January 2021 to obtain coverage with some exceptions.

2.Exemptions available

Most exemptions from the mandate will be claimed when filing 2020 state income tax returns in early 2021. Additional exemptions from the mandate may be granted through Covered CA beginning in Jan 2020.

3.Financial assistance available To help Californians meet the requirement to have insurance coverage, the state, starting in 2020, will extend the limits of current federal financial assistance limits to qualifying individuals and families, dependent on their household size and income, through Covered CA. This new state financial assistance will be in addition to federal assistance some already receive through Covered CA.

Contact us today to explore options to obtain health insurance coverage.