Is Health Insurance Mandatory?

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Under the Affordable Care Act, also known as Obamacare, Americans were required to have health insurance coverage for their household. Failure to have health insurance coverage triggered a tax penalty. However, as of January 1, 2019, health insurance coverage is no longer mandatory at the federal level. This means that the Internal Revenue Service (IRS) will not be imposing a penalty for those who do not have health care coverage for the entire year. Even though health care coverage is not federally mandated anymore, some states may still require you to have health insurance and may penalize you for not having it.

The states that have requirements or regulations set to take place include:

• California
• Massachusetts
• New Jersey
• Vermont

Washington DC also requires residents to purchase health insurance. Additionally, some other states are in the process and attempting to pass legislation that would require residents to obtain health insurance. In states that require you to have health insurance, the rules for obtaining and maintain coverage are available through state-run health insurance marketplaces.

California is one of the states that has implemented a health insurance requirement. As of January 1, 2020, California residents must maintain qualifying health insurance throughout the year. This requirement applies to all members of the household. Since January 2, 2020, Covered California has been sending letters to approximately 2.1 million households who are uninsured. These letters will let residents know about the new minimum essential coverage individual mandate and will let them know that they can go to Covered California to:

• Shop for qualifying health insurance.
• Get information about financial help to lower the cost of qualifying health insurance.
• Get information about exemptions and the California Individual Shared Responsibility Penalty for failure to have qualifying health insurance coverage or an exemption.
• Individuals who fail to maintain qualifying health insurance will owe a penalty unless they qualify for an exemption. Covered California and the Franchise Tax Board each administer exemptions for qualifying individuals.

If you are a resident of another state other than California or one of the four listed above, please make sure to check with your local state tax board to confirm whether health insurance is mandatory in your state.

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Published by Lauren Lee