California’s Individual Mandate Penalty Has Increased
As you probably already know, California’s Individual Mandate for health insurance took effect at the beginning of 2020. At that point, all California citizens were required to maintain minimum essential health coverage for all twelve months of the year.
The requirements allowed for employer-sponsored plans, plans purchased through Covered California, plans purchased directly from providers, Medicare plans, and Medi-Cal (the Medicaid program in California). Any of these options fulfilled the requirement for minimum essential coverage, but those who failed to enroll in one of the above plans faced a penalty on their state income tax return in most cases.
For 2021, the penalty for failing to maintain health insurance coverage has increased to the following amounts:
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- A flat amount based on the number of people in the household; $800 per adult and $400 per dependent child up to an annual maximum of $2400
OR…
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- A percentage of household income; 2.5 percent of all gross household income over the tax filing threshold
The state assesses the penalty as whichever calculation (of the above formulas) yields the larger amount.
Some exemptions to the law do apply, but it is not recommended that you rely upon those. Even if you qualify for an exemption, the cost of going without healthcare coverage could greatly exceed the penalties outlined above. Give us a call to discuss your health insurance enrollment options, so that we can get you covered for 2022.
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