California and a handful of other states (more information on these "other states" below) have an individual mandate requiring folks to have health coverage throughout the year or pay a tax penalty. However, there is no federal nationwide mandate.
- In California, the penalty is at least $850 for adults and $425 for dependent children under 18, which would be paid on their state income tax return for the 2023 tax year in 2024.
- The penalty for married couples is $1,700.
- The penalty for a family of four (with 2 children) is at least $2,550.
- Those who don't maintain qualifying health coverage may face a penalty unless they qualify for a hardship exemption.
California is not alone in reinstating the individual mandate. For state tax purposes these states have also chosen to enforce a penalty for not having qualifying health insurance.
State Taxes: These 5 states and the District of Columbia have kept the individual mandate and have reinstated penalties similar to the Affordable Care Act (ACA). This fee is paid when you file your state taxes.
- District of Columbia
- New Jersey
- Rhode Island
- Federal Taxes: Starting with the 2019 plan year (IRS filing year 2020), the federal fee does not apply. There is no longer a federal mandate to purchase insurance.
Nationwide, there is currently no federal tax penalty to pay for not having insurance. There is no longer a federal mandate to have insurance.
Note: If you haven't filed your taxes for 2018 or earlier (the 2019 filing season), the federal penalty still applies!
- 2018 or earlier penalty: 2.5% of total annual income or $695, whichever is higher.
The fines are pro-rated, meaning that if you are uninsured for just part of the year, you will have to pay 1/12th of the penalty for each month you are uninsured.
There is also a grace period: If you are uninsured for less than two consecutive months of any year, you won’t have to pay a fine and may qualify for an exemption.
For states with a penalty, it is very important to note that paying the penalty does not mean you have health insurance coverage. You will still be responsible for 100% of the costs of your medical care.
If you are ready to get insured, great! Click here.