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Individual Mandate – Shared Responsibility Penalty ISR
for not having Health Insurance  in California!

California tax penalty for not having health insurance

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Covered California Mandate Tax Penalty
Fact Sheet
Covered CA Bulletin on Mandate

Note Covered CA simply controls the Market.  These penalties are for EVERYONE!!!
Even if you are not getting Covered CA Tax Subsidies!

Tax Penalty

The penalty for not having qualifying health insurance has increased. As a reminder, there are two methods of calculating the penalty, and a household will pay whichever calculation yields the larger penalty:

  1. FTB Tax Penalty Calculator
  2. A flat amount based on the number of people in the household – $800 per adult 18 years or older and $400 per dependent child for no coverage for an entire year; up to an annual max of $2,400.
  3. A percentage of the household income – 2.5% of all gross household income over the tax filing threshold. (b) (1) Code
    1. Covered CA with subsidies can be as little at $10/mth    *  Get quotes
  4. Covered California Individual Mandate and Penalty Quick Guide  Covered CA 10/2025 
    1. Covered CA Penalty Quick Guide
  5.  
  6. Tools to estimate income for next year.
Instant Health Insurance Proposals & Subsidy Calculation

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Steve Shorr’s Summary of this page and the new law

CA Insurance Mandate Video

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Penalty – Exemptions 

California Mandate Penalty

#Franchise Tax Board  Information  

Penalty Estimator

penalty estimator
 
 
CA legislature passes legislation SB 175  SB 78 and AB 414 to put mandate back in! CA KCRA * 

FTB Table of Contents

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Guaranteed Issue - No Pre X Clause - Quote & Subsidy Calculation - No charge for our complementary services - If not in CA click here for Nationwide Quotes

 

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California Mandate Penalty #Exemptions

Exemptions Claimed on #State Tax Return
Forms   * Form 3853 Exemptions & Penalty *  Instructions FTB 3853

  1. Income is below the tax filing threshold
    1. VITA Free Tax Assistance
    2. IRS Do I need to File a Return Tool
    3. HR Block Listings
  2. Health coverage is considered unaffordable  Tool to calculate affordability 
  3. Families’ self-only coverage combined cost is unaffordable
  4. Short coverage gap of 3 consecutive months or less
  5. Certain non-citizens who are not lawfully present
  6. Certain citizens living abroad/residents of another state or U.S. territory
  7. Members of health care sharing ministry
  8. Members of federally-recognized Indian tribes including Alaskan Natives
  9. Incarceration (other than incarceration pending the disposition of charges)
  10. Enrolled in limited or restricted-scope [Share of Cost?] Medi-Cal or other coverage from the California  department of Health Care Services FTB.Gov *

Exemptions Processed by Covered California

  • Religious conscience exemption
  • Affordability hardship
  • General hardships

Penalty Estimator Tool 

Minimum Essential Coverage

CA Individual Mandate

 
 

#SB78   requires an individual who is a California resident and any spouse or dependent of the individual, is enrolled in and maintains minimum essential coverage  health insurance for each month beginning on and after January 1, 2020, except as specified.

 
The bill would require Covered CA  to grant exemptions from the mandate for reason of hardship or religious conscience, and would require Covered CA  to establish a process for determining eligibility for an exemption.
 
 
The bill would impose the Individual Shared Responsibility Penalty (see above) for the failure to maintain minimum essential coverage, as determined and collected by the Franchise Tax Board, in collaboration with the Exchange, as specified. The bill would require the Franchise Tax Board to provide specified information to the Exchange regarding individuals who do not maintain minimum essential coverage, and would require the Exchange to conduct annual outreach and enrollment efforts with those individuals.
 
 
 
The bill would require an applicable entity, as defined, that provides minimum essential coverage to an individual to file specified returns to the Franchise Tax Board regarding that coverage, as prescribed.
 
 
 
Until January 1, 2023, the bill would create Individual Market Assistance, which would be authorized to provide health care coverage financial assistance to California residents with household incomes at or below 600% of the federal poverty level, including advanced premium assistance subsidies.
 
 
 
 
The bill would authorize a health care service plan or health insurer to cancel a contract or policy for nonpayment after a 3-month grace period if the individual receives that advanced premium assistance subsidy or advance payments of the federal premium tax credit, but would require a plan or insurer to provide health care coverage for the first month of the grace period and to return the subsidy and tax credit for the 2nd and 3rd months of the grace period if the outstanding premiums are not paid.
 
Mercer.com Summary
 

What is Minimum #Essential Coverage (MEC)?

26 USC §5000 A   

(a) Requirement to #maintain minimum essential coverage  

While there may no longer be a Federal Penalty for not having health insurance, we are showing you this page, as we expect California’s mandate to have the same rules.

The individual shared responsibility provision aka mandate requires you and each member of your family to have basic health coverage – also known as

Minimum Essential Coverage –(Bronze Plan)   “§5000 A  (f)  (1) pdf  Cornel HTML * Publication 974  *

or qualify for a health coverage exemption, or make an individual shared responsibility payment mandate  for months without coverage or an exemption when you file your federal income tax return.

Many people already have minimum essential coverage and do not need to do anything more than maintain that coverage and report their coverage when they file their tax returns. Most taxpayers will simply check a box to indicate that each member of their family had qualifying health coverage for the whole year.

See also,

Subscribe to IRS Tax Tips to get easy-to-read tips via e-mail from the IRS.

(5) Insurance-related terms
Any term used in this section which is also used in title I of the Patient Protection and Affordable Care Act shall have the same meaning as when used in such title.

Resources & Links

Code of Federal Regulations
Subpart G—Minimum Essential Coverage

§156.600 The definition of minimum essential coverage.   §5000 A  (f)
§156.602   Other coverage that qualifies as minimum essential coverage.
§156.604   Requirements for recognition as minimum essential coverage for types of coverage not otherwise designated minimum essential coverage in the statute or this subpart.

§156.606   HHS audit authority.

Top 5 - 10 causes of Long Term Disability Claims 

Lower back disorders  ♦   Depression  ♦ Coronary heart disease, arthritis and pulmonary diseases  (Met Life) ♦  Disability Can Happen  ♦  CDC Statistics

Top 5 causes of Disabilty

 

Our webpage on  Disability Payments - Insurance 

Get Disability Quotes for Parents, Caretakers & Wage Earners  

Historical

Tax Cuts & Jobs Act

Federal Mandate penalty drops to Zero

The New Tax Bill HR 1 Tax Cuts & Jobs act drops the mandate penalty to zero, but many would argue the mandate is still valid.  Congress could put a financial tax penalty back in, see Texas v USA –  CA   brief page # 34.

PART VIII—INDIVIDUAL MANDATE

SEC.11081. ELIMINATION OF SHARED RESPONSIBILITY PAYMENT FOR INDIVIDUALS FAILING TO MAINTAIN MINIMUM ESSENTIAL COVERAGE.

(a) In General.—Section 5000A(c) is amended—

(1) in paragraph (2)(B)(iii), by striking “2.5 percent” and inserting “Zero percent”, and

(2) in paragraph (3)—

(A) by striking “$695” in subparagraph (A) and inserting “$0”, and

(B) by striking subparagraph (D).

(b) Effective Date.—The amendments made by this section shall apply to months beginning after December 31, 2018.

Obama Care imposes a  Individual Mandate – Tax Penalty  of 2.5% of income (calculate it)  on just about ALL legal residents, if you don’t Purchase Health Insurance.  Your coverage must include the 10 Essential Minimum Benefits and meet the definition of Minimum Essential Coverage (MEC),  unless you qualify for an exemption, (§5000 A).   Just check off on line 61 of your 1040 that you complied.   You will also get a 1095 from your Insurance Company.  

The Health Care Law provides for  subsidies and tax Credits to help you pay the premium.  We can help you with that at no additional charge.  Complementary quotes for compliant guaranteed issue plans.  

You might also talk to your Employer about providing Coverage. Tell him he can get a FREE Quote  and it’s tax deductible for him and tax free to you §106 IRC.

CA fights Trumps attacks on ACA/Obamacare LA Times 8.15.2019 *

Earning too much for Medi-Cal??? Get Covered CA Quote here
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Resources & Links

More Detailed (Child) Pages on Individual & Employer Mandate

Premium Subsidy to 600% FPL + Mandate Penalty?

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