Health Insurance Matters: Dorothy

Health Insurance Matters

By Harry P Thal

Dorothy

The California individual mandate generally requires that, beginning 2020, all California residents maintain minimum essential health coverage (MEC) for each month of the year. MEC includes employer-sponsored insurance, individual market coverage purchased through Covered California or directly from issuers, Medicare Parts A and C, and most Medi-Cal coverage. Those who do not meet this requirement must pay a penalty on their state income tax return unless they qualify for an exemption.

* Income is below the tax filing threshold

* Health coverage is considered unaffordable (exceeded 8.24% of household income for the 2020 taxable year)

* Families' self-only coverage combined cost is unaffordable

* Short coverage gap of three consecutive months or less

* Certain non-citizens who are not lawfully present

* Certain citizens living abroad/residents of another state or U.S. territory

* Members of health care sharing ministry

* Members of federally-recognized Indian tribes including Alaskan Natives

* Incarceration (other than incarceration pending the disposition of charges)

* Enrolled in limited or restricted-scope Medi-Cal or other coverage from the California Department of Health Care Services

* Religious conscience exemption

* Affordability hardship

* General hardships

Visit Covered California for more details.

For 2021, the amount of the penalty for not having qualifying health insurance has increased. As a reminder, there are two methods of calculating the penalty, and a household will pay whichever calculation yields the larger penalty:

1. A flat amount based on the number of people in the household - $800 per adult 18 years or older and $400 per dependent child for no coverage for an entire year; up to an annual max of $2,400.

2. A percentage of the household income - 2.5% of all gross household income over the tax filing threshold.

3. The California Franchise Tax Board (FTB) launched the individual mandate penalty estimator in 2020 to help consumers calculate the penalty they may owe if they go without qualifying health coverage.

4. Estimator is located at https://www.ftb.ca.gov/file/personal/filing-situations/healthcare/estimator/

This week we enrolled Dorothy and her family in a benefit rich Blue Shield PPO health plan. With the financial assistance from Covered California, her cost was $0. Most people do qualify for financial assistance. It is worth a phone call to Debra Matthews at 760-376-2100.

Harry P. Thal is the Medicare Guru. His office staff may be reached at 760-376-2100.