Subject: CA will impose penalty on those with no health insurance starting in 2020
The federal mandate to have health insurance ended on January 1, 2019, but beginning January 1, 2020, California will impose penalties on California residents who do not have minimum essential health care coverage.
Amount of the penalty– The penalty is generally $695 per adult who does not have qualified coverage (half that for each dependent child). As an example, if a typical family of four is uninsured for the whole year, they would face a penalty of at least $2,000 ($695 + $695 + $347 + $347). However, the penalty can be as much as 2.5% of household income, so a household with $500,000 of income might have a penalty over $10,000.
Exemptions – Some taxpayers can avoid the penalty if they qualify for an exemption. Most of the exemptions are the same as those that applied under the federal Affordable Care Act. Common exemptions include:
- Coverage is unaffordable (using specific guidelines)
- You’ve experienced a severe hardship (e.g., homelessness, eviction, bankruptcy, domestic violence, illness or death in the family, etc.), or
- You have a short-term coverage gap (three months or less) due to switching jobs
Other exemptions are also available. Call our office if you have any questions as to whether you might qualify for an exemption.
How to get coverage – You can sign up for health care coverage online at Covered California (www.coveredca.com). Be sure to get coverage as soon as possible. The penalty may apply for any month after January 1, 2020 that you do not have qualified coverage, and open enrollment through Covered California ends January 31, 2020.
Subsidies available– California is providing subsidies to assist taxpayers who purchase health care coverage through the Covered California website. Subsidies are available to people whose household income is at or below 600% of the federal poverty line ($74,940 for a single person and up to $154,500 for a family of four).
Please call our office ASAP if you have any questions about this new requirement so we have time to help you meet the requirement before January 1, 2020.