Posted on by — No Comments ↓

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

California tax penalty for not having health insurance

Try turning your phone sideways to see the graphs & pdf's?

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. Democratic lawmakers press Newsom to spend millions from health insurance fines  LA Times  May 31, 2023
    1. promise: The state would levy the fine but use that money to provide financial assistance to offset out-of-pocket costs for Californians purchasing health insurance on the state exchange, Covered California.Newsom isn’t doing that
    2. California Stockpiles Penalties From Uninsured Residents Instead of Lowering Care Costs Kaiser Health News 11/2022
  6. Tools to estimate income for next year.  
Instant Health Insurance Proposals & Subsidy Calculation

FAQ’s – Comments

 

Jump to section on: 

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

CA Insurance Mandate Video

Our Individual Insurance YouTube Playlist

Ask us a Question? FAQ's?

Covered California Certified Insurance Agent

#Covered CA Certified Agent  

No extra charge for complementary assistance 

I'm in Sonia

 

Contact Us - Ask Questions - Get More Information
[email protected] 

By submitting the information below , you are agreeing to be contacted by Steve Shorr a Licensed Sales Agent by email, texting or Zoom to discuss Medicare or other Insurance Plans as relevant to your inquiry. This is a solicitation for Insurance

 

 

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

All our Health plans are Guaranteed Issue with No Pre X Clause
Quote & Subsidy #Calculation
There is No charge for our complementary services, we are paid by the Insurance Company.
Guaranteed Issue - No Pre X Clause - Quote & Subsidy Calculation - No charge for our complementary services - If not in CA click here for Nationwide Quotes

 

Covered California Certified Insurance Agent

 

Watch our 10 minute VIDEO
that explains everything about getting a quote

Full detailed explanation of how to use our quote engine video

    • Our Quote Engine Takes all the complexity out of using pencil and paper to figure out the premiums per the Obamacare/ACA rules under   CFR §1.36B-3 *

 

Instant Term Life Insurance Quotes

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 (exceeded 8.24% of household income for the 2020 taxable year)
  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,

Here are some examples of coverage that qualify as minimum essential coverage:

Employer-sponsored coverage

Individual health coverage:

  • Health insurance you purchase directly from an insurance company
  • Health insurance you purchase through the Health Insurance Marketplace
  • Health insurance provided through a student health plan

Coverage under government-sponsored programs:

  • Medicare Part A coverage
  • Medicare Advantage plans
  • Most Medicaid Medi Cal coverage
  • C-CHIP County Children’s Health Initiative Program
  • Most types of TRICARE coverage
  • Comprehensive health care programs offered by the Department of Veterans Affairs
  • Department of Defense Nonappropriated Fund Health Benefits Program
  • Refugee Medical Assistance

U.S. citizens, who are residents of a foreign country for an entire year, and residents of U.S. territories, are considered to have minimum essential coverage for the year.

For more information on the types of coverage that qualify as minimum essential coverage and those that do not, as well as information on certain coverage that may provide limited benefits, visit the MEC page on IRS.gov/aca.

If you need health coverage, visit HealthCare.gov to learn about health insurance options that are available for you and your family, how to purchase health insurance, and how you might qualify to get financial assistance with the cost of insurance.

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

1095 B Rules & Information confirmation of employer coverage

(A) Government sponsored programs

Coverage under—

(i) the Medicare program under part A of title XVIII of the Social Security Act,
(ii) the Medicaid program under title XIX of the Social Security Act,
(iii) the CHIP program under title XXI of the Social Security Act,
(iv) medical coverage under chapter 55 of title 10, United States Code, including coverage under the TRICARE program; [2](v) a health care program under chapter 17 or 18 of title 38, United States Code, as determined by the Secretary of Veterans Affairs, in coordination with the Secretary of Health and Human Services and the Secretary,
(vi) a health plan under section 2504 (e) of title 22, United States Code (relating to Peace Corps volunteers); [2] or
(vii) the Nonappropriated Fund Health Benefits Program of the Department of Defense, established under section 349 of the National Defense Authorization Act for Fiscal Year 1995 (Public Law 103–337; 10 U.S.C. 1587 note).

(B) Employer-sponsored plan
Coverage under an eligible employer-sponsored plan.

Lowest MEC price & coverage

.
(C) Plans in the individual market
Coverage under a health plan offered in the individual market within a State.

.
(D) Grandfathered health plan
Coverage under a grandfathered health plan.

.
(E) Other coverage
Such other health benefits coverage, such as a State health benefits risk pool, as the Secretary of Health and Human Services, in coordination with the Secretary, recognizes for purposes of this subsection.

.
(2) Eligible employer-sponsored plan

The term “eligible employer-sponsored plan” means, with respect to any employee, a group health plan or group health insurance coverage offered by an employer to the employee which is—

(A) a governmental plan (within the meaning of section 2791(d)(8) of the Public Health Service Act), or
(B) any other plan or coverage offered in the small or large group market within a State.
Such term shall include a grandfathered health plan described in paragraph (1)(D) offered in a group market.

(3) Excepted benefits not treated as minimum essential coverage
The term “minimum essential coverage” shall not include health insurance coverage which consists of coverage of excepted benefits—

(A) described in paragraph (1) of subsection (c) ofsection 2791 of the Public Health Service Act; or
(B) described in paragraph (2), (3), or (4) of such subsection if the benefits are provided under a separate policy, certificate, or contract of insurance.

(4) Individuals residing outside United States or residents of territories
Any applicable individual shall be treated as having minimum essential coverage for any month—

(A) if such month occurs during any period described in subparagraph (A) or (B) of section 911 (d)(1) which is applicable to the individual, or
(B) if such individual is a bona fide resident of any possession of the United States (as determined under section 937 (a)) for such month.

(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.

  • 42 U.S. Code § 18021 –#Qualified health plan defined

    While there may no longer be a Federal Penalty and there are issues with Constitutionality Texas vs USA  for not having health insurance, we are showing you this page, as we expect California’s mandate to have the same or very similar rules as the Feds did.  We are waiting to hear from the FTB Franchise Tax Board on the details.

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
Ask us a Question? FAQ's?

Resources & Links

More Detailed (Child) Pages on Individual & Employer Mandate

Premium Subsidy to 600% FPL + Mandate Penalty?

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.