Mandatory Health Insurance Policy for Californians - 2021

Mandatory Health Insurance Policy for Californians - 2021

Mandatory Health Insurance Policy for Californians - 2021
The individual mandate of California came into effect in January 2020. This mandates the California state residents to get mandatory
medical health insurance, failure of which will lead to insurance penalty in 2021. Though the mandate came into effect last year, there are still a surprising number of residents who are not aware of the state law and what it means for them. Here we will help you with the details and features of the law.

California individual mandate 2020

  • California implemented the state individual mandate with effect from January 1, 2020. It instructed the state residents to maintain a minimum essential coverage (MEC) which means that the residents and their dependents should have mandatory health insurance coverage.
  • Californians who fail to maintain this will be subjected to a tax penalty that is similar to the former federal-level penalty.
  • MEC refers to the health insurance coverage that one must have so as to adhere to the individual mandate as set out by the Affordable Care Act (ACA).

Mandate health insurance and Covered California

The federal Affordable Care Act (ACA), which came into effect in 2014 needed the residents to maintain the MEC, but Congress reduced the non-compliance penalty to $0.0 starting from 2019. As a result, the state noticed a significant drop in the enrolment for insurance in Covered California, which is the government agency that gives out subsidized Obamacare plans for this state. Thus, by the individual mandate 2020 California aimed to restore the number of insured individuals and families in its state.

Covered California  offers the best medical health insurance premium assistance for middle-income individuals who have an income range between 400% and 600% in the Federal Property Level (FPL); California becomes the first state to initiate this. In addition, families with a household income range between 138 and400% of the FPL can get federal government assistance.

Tax penalty 2021

People who missed the notice have been penalized in January 2021 for the first time since the mandate came into effect. When your W-2 document arrives, the insurance penalty will be added to it if you did not get your insurance in 2020. There will be some exemptions when the income level of households falls below the threshold of the state tax filing.

The penalty is usually fetched in two ways in California. 

  • First, in case of no insurance, there will be a charge of an amount of $695 for adults and half of that for a child. Otherwise, you will be charged with 2.5% of your income that is in excess of the state filing threshold.
  • The amount that is selected for the penalty is the higher of the either. 

What to do to stay clear of the insurance penalty

  • It will be best for you to get a qualified health plan as soon as possible. This can reduce the penalty that is calculated every month.
  • When the tax season is nearing, collect your medical health insurance documents, and if your employer covers your insurance obtain a statement that indicates it.
  • There are few exemptions for the California individual mandate. You can get an opinion from a tax professional to know whether you will be eligible for the exemption. 

Health insurance plan in Allied Brokers

Allied Brokers provides insurance products throughout California and several other states.

Affordable health plans for you and your family from Allied Brokers can provide you excellent medical insurance for all your needs.

To get expert help or suggestions about the topic, you can reach us by filling our contact form or giving us a call at 1-888-505-7988


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