Recent National Immigration Policies and Paying the Tax Penalty Under the Affordable Care Act

The Affordable Care Act is clear that individuals who are not lawfully present cannot purchase health coverage through Covered California and are not subject to the tax penalty for being uninsured. Consumers should also be aware of scammers or uninformed tax preparers who may want to charge an Affordable Care Act penalty on these individuals.

What Individuals Under Deferred Action for Childhood Arrivals Should Know About Covered California and the Affordable Care Act

Under the Affordable Care Act, individuals who are under Deferred Action for Childhood Arrivals (DACA) are not eligible for insurance coverage through Covered California and qualify for an exemption from the tax penalty for not having insurance. The reason for this is that DACA individuals are not considered to be lawfully present, which is one of the requirements to purchase health insurance through Covered California. DACA individuals may claim the exemption from the penalty on their tax return.

Covered California is also aware of reports of dishonest tax preparers attempting to collect tax penalties where no penalty is owed. California consumers are encouraged to read a new warning issued by the Internal Revenue Service (IRS) on March 13, 2015, to choose tax preparers carefully. Consumers should be aware that tax penalty payments are never owed to a tax preparer directly.

While DACA individuals are not eligible to purchase insurance through Covered California, they may be eligible for full-scope Medi-Cal, depending on their income. For more information on the Medi-Cal program, click here.

President Obama’s Executive Actions on Immigration

On Nov. 20, 2014, the president unveiled a series of executive actions on immigration policy that would offer temporary deferred action and work authorization to millions of undocumented immigrants. These executive actions included expanding the population eligible for DACA status, as well as allowing the parents of U.S. citizens and lawful residents to request deferred action. The proposed expansions were blocked by a federal court order on Feb. 18, 2015, and have not gone into effect.