In California, the deadline for enrolling in health insurance through Covered California, the state’s government-subsidized health insurance marketplace, is rapidly approaching on January 31st. Failure to enroll by this deadline will result in individuals not being able to access affordable healthcare for the next year. Those who go the entire year without any health insurance will face a minimum penalty of $900 when filing their taxes.
Covered California is the largest state-level health insurance market in the United States, providing government-subsidized health coverage to individuals and families who meet criteria such as having income within the federal poverty level. Many low-income applicants are able to benefit from zero-cost health insurance plans as a result.
In 2025, Californians with incomes above 200% of the Federal Poverty Level (FPL) will be eligible to enroll in the “Enhanced Silver 73” plan, which has no deductible, while those earning below 200% of the FPL can continue to access higher subsidy healthcare plans.
According to the official website, Covered California is the sole purchasing entity within the state for health insurance subsidies, other than programs like Medi-Cal and Medicare. As per tradition, the enrollment period for this year will close on January 31st, and missing this deadline will result in losing the opportunity to purchase insurance for the year 2025.
The provision mandating fines for not having health insurance in California remains in place. According to the Franchise Tax Board of California’s official website, residents must have qualified health insurance or apply for exemptions every month, or they will face penalties when filing taxes.
The specific amount of the penalty depends on the individual or family’s income and the number of people in the household. When filing taxes for 2024, adults who were uninsured for the entire year face a minimum penalty of $900 per person, while individuals under 18 are fined $450 each. Alternatively, if the amount exceeds 2.5% of the household’s income above the filing threshold, that portion will be penalized. The higher of the two calculations determines the final fine amount.
For instance, a family consisting of a couple with two children earning less than $177,200 annually would incur a penalty of $2,700 for the year if they remained uninsured. However, if a family of three with an income of $200,000 files taxes together, the penalty for being uninsured for the year would be $3,502.
If individuals prefer not to purchase health insurance through Covered California, they have the option to buy insurance directly from an insurance company, participate in employer-sponsored health plans, apply for federal Medicare (Part A and Part C), among other alternatives. Ultimately, having health insurance is key to avoiding penalties.
Although the policy of fining individuals for not having health insurance was repealed at the federal level during former President Trump’s first term, California Governor Gavin Newsom reinstated the penalty at the state level. Since 2020, the amount of fines has been increasing annually.
In most cases, missing the enrollment date for Covered California means being unable to purchase health insurance for the upcoming year. However, in situations such as welcoming a new baby, adopting a child, a change in immigration status, or suddenly losing previous employer-sponsored insurance, individuals can submit special enrollment applications within the designated timeframe, even after the regular enrollment period has passed. ◇