hi everyone welcome back to my YouTube channel. I am an insurance agent licensed in California
and in this video I would like to discuss with you about the penalty for not having health insurance.
Almost every day I'm being asked this question and I thought I would record a video on this topic.
I will be talking about the penalty in California if you live in another state check the individual
mandate penalty for not having health insurance if that applies to you in your state.
Nationwide there is currently no federal tax penalty to pay for not having health
insurance - there is no longer a federal mandate to have insurance. In California the penalty will
be applied by the California franchise tax board. The penalty was repealed at some point by trump
administration but then it was reinstated in some of the states. In California the penalty applies
for taxable years 2020- 2021 and beyond . If there will be a change or update in the law I will make
sure to record a new video so please subscribe this topic interests you. So the main question
is - how much is the penalty for not having health insurance in California? At the moment the penalty
for not having health insurance is $750 per adult and $350 per child or 2.5% of your household
income whichever is greater. the California franchise tax board offers a penalty calculator
you can use it to estimate what you might owe if you are uninsured and don't qualify for an
exemption. Don't be fooled by the small percentage -now whichever is greater is a tricky one. I had a
client a few years ago whose income was 280k per year uh he is a contractor here in Silicon Valley
so he did not have health insurance provided by his company and did not have an individual
medical plan. He paid the penalty and then called me to get coverage immediately and here's why:
his penalty for previous year was like $7000 or so just to give you an idea a 30 year
old guy could have bought the cheapest plan available in Santa Clara county for like $200
a month which is like $2,400 a year or something like that he would have had insurance and saved
big bucks instead of paying the penalty. So my point is don't be tricked by the 2.5 percent - it
could be quite a lot and in the case of my client the penalty was much higher than if he had bought
a bronze high deductible plan. This is a prime example that failing to plan basically leads to
a plan to fail. Now, here's another news -because there is a requirement to have insurance coverage
in California there is financial assistance to qualifying individuals and families depending on
their household size and income through Covered California. The American Rescue Plan allows many
individuals who never qualified for assistance in the past due to high income to qualify now
so take a look at an income limits table to qualify for a subsidy. I have it under this video
or run an estimate on the official website and check if you qualify for any discounts. Now where
there is a requirement there is also an exemption so what are the exemptions from the penalty?
some of the exemptions that could be used are general hardship, affordability hardship,
religious conscience, and so on. Also if you had a short coverage gap of three consecutive
months or less you may be exempt from the penalty so that's all about the penalty!
Feel free to reach out if you need help with your Covered California application or have a question
about the plans qualifications and so on again I'm a licensed insurance agent in California. I have
contracts with all the insurance companies in the state including with CoveredCA and can help you
if you have a general question feel free to comment under this video and
thank you everyone for watching and stay healthy!