The federal government has set a mandate that requires health insurance companies to meet certain requirements to ensure that people of any age or health status can receive coverage. To avoid a tax penalty for not having health insurance, individuals must enroll in a qualified health plan or have a valid exemption. In addition to the health insurance penalty in California, several other states have laws that require people to have health insurance. Just as you declare your health care coverage on your federal tax return, you must also declare it on your state tax return if you live in California.
Those who do not have health insurance coverage from a public program or from their employer must purchase their own insurance from a private insurance company or from a health benefit exchange administered by the federal or state government. Before the federal mandate, people could opt out of health insurance without fear of being sanctioned, and in the absence of a federal mandate, health insurance costs began to skyrocket. To learn more about the tax penalty for not having health insurance in California and how your organization can automate communications about the California health insurance mandate, contact New City Insurance.