Penalty for No Health Insurance 2020 in California
When Obamacare passed, it came with a tax penalty for those who could afford health insurance but didn’t get it. The tax penalty was eliminated in 2017 by the Trump administration, but the state of California has reinstated it for 2020. California residents who do not have health insurance in 2020, will have to pay a tax penalty in 2021. Read our blog to learn more.
Tax Penalty for No Health Insurance 2020
What is the penalty for not having health insurance? A taxpayer who fails to get health insurance that meets the state’s minimum requirements will be subject to a penalty of $695 per adult, (and $347.50 per child under 18) or 2.5% of annual household income, whichever is higher 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. According to Covered California, a family of four that has no insurance for the entire year could face a penalty of at least $2,000.
Health Insurance Penalty 2020 Exemptions
There are exemptions for the 2020 health insurance penalty. According to Covered California, individuals who aren’t required to file California income taxes don’t have to maintain minimum health insurance coverage.
Additional exemptions may include:
- Individuals who obtain a hardship exemption from the exchange
- Members of certain religious sects who obtain a religious-conscience certificate of exemption
- Individuals enrolled in limited-scope coverage under Medi-Cal or other similar programs
- Health care sharing ministry members
- Incarcerated individuals
- Non-US citizens or nationals who are not lawfully present in the US
- Tribal members
- Certain expatriates
- Residents of another US state or US territory
When is California Open Enrollment?
The open enrollment period to sign up for health care coverage with Covered California is Oct. 15, 2019, through Jan. 15, 2020. If you don’t have health insurance, this is the time to sign up to avoid having to pay the health insurance penalty.
If you are currently uninsured, you can use Covered California to compare plans and enroll in a plan that meets your needs.
If you already have health insurance, you will be automatically re-enrolled in your existing plan if it is still available. If your plan is discontinued, you will be enrolled in a plan deemed “similar” by Covered California. Open enrollment is a time for you to review your coverage, compare plans, and switch to a new health insurance plan if you find a better option.
Health Insurance Financial Assistance
California will become the first state to offer financial assistance to middle-income residents who make between 400% and 600% of the federal poverty level. That’s about $50,000 and $75,000 a year for an individual and about $103,000 and $154,500 for a family of four.
The state-funded subsidy will help residents who have previously struggled to pay their health insurance premiums because they were not eligible for assistance.
Covered California estimates that the new subsidy, in conjunction with the new state tax penalty, will result in 229,000 newly insured Californians.
The revenue from the health insurance penalty, in addition to other state funds, will help pay for the subsidies for roughly 922,000 people who purchase insurance through Covered California. The new state financial assistance will be in addition to federal financial aid that some will receive through Covered California.
State residents whose annual household income is less than 138% of the federal poverty level will see premiums for specific plans lowered to just $1 per person, per month. The 2020 earnings cutoff for this level is $17,237 for an individual and $35,535 for a family of four.
Cost-U-Less offers cheap health insurance in California. If you are in need of quality health insurance that is affordable for you and your family, call us today for a free health insurance quote. Our friendly insurance agents will answer all of your California health insurance questions and provide a quote that works best for you. Call 800-390-4071 or request your free medical insurance quote online.