Covered California Steps Up Messaging That Tax Penalties Are Going Up In 2015 for Uninsured Californians

SACRAMENTO, Calif. — Two days before the deadline for February coverage, Covered California announced Tuesday it is stepping up messaging about the rising penalties for not having health insurance, encouraging Californians without coverage to explore their options and sign up to avoid a big bill at tax time next year.

“It’s important that consumers understand now that the cost of remaining uninsured is rising,” Covered California Executive Director Peter V. Lee said. “This year, a family of four earning $70,000 a year could pay close to $1,000 in their taxes if they remain uninsured in 2015.”

The penalty, known as the “shared responsibility payment,” takes effect for 2014, and many who were uninsured will see an impact when they prepare their taxes due in April of this year. However, the penalty rises substantially for 2015, meaning it’s important that all uninsured Californians know this and take steps now — before open enrollment ends — to avoid significant penalties when they prepare their 2015 taxes due next year.

“With some exceptions, everyone in America is now required to have health insurance — buying coverage for themselves and their families rather than relying on others to pay for their care,” Lee said. “As the penalty increases, it makes more and more sense for those who have been waiting on the sidelines to get in and get coverage.”

In 2016, the shared responsibility payment for those without health insurance rises even more. The same family of four that would pay $988 for not being covered in 2015 would likely pay $2,085 in 2016 if they do not have health coverage, depending on their specific circumstances. Individuals and families with incomes that would qualify for Medi-Cal would also be affected if they don’t have coverage.

“This is an important message that should be heard by Californians of all income levels,” said Toby Douglas, director of the California Department of Health Care Services (DHCS), which operates the Medi-Cal program. “Applying for coverage not only gives you an opportunity to get comprehensive health care; it can help you avoid a penalty that could hurt you and your family.”

The shared responsibility payment is calculated based on the greater of two factors, a flat fee or a percentage fee based on one’s income and the national average cost of a Bronze health plan.

The following table shows estimated penalties for not having insurance in 2015.

Lee said the penalty messaging will be stepped up through service channels, in social media and in paid advertising in the remaining weeks of open enrollment. Materials stress not only the financial consequences, but also the health consequences of remaining uninsured.

“The financial penalties are just one part of the equation,” Lee said. “Putting off care when you need it can harm your health or even endanger your life. Every month a consumer goes without coverage is a month of risk, but if consumers sign up by this Thursday, their coverage can start next month.”  

Also Tuesday, Covered California and DHCS released updated data on new enrollment during the open-enrollment period ending Feb. 15.

More than 1,099,200 people sought coverage and were determined eligible for private health insurance and eligible or likely eligible for Medi-Cal from the start of open enrollment on Nov. 15 through Jan. 11. This includes 304,394 eligibility determinations and an additional 217,146 plan selections for private coverage, as well as 466,778 enrollments into Medi-Cal coverage and 110,913 who are likely eligible for Medi-Cal. Since January 2014, Medi-Cal has enrolled more than 2.2 million consumers.

“We’re continuing to see strong interest in enrolling in coverage as open enrollment continues, but there are still hundreds of thousands of Californians who need to sign up,” Lee said. “Consumers must enroll soon to ensure they don’t miss the window of opportunity for buying subsidized health coverage this year and to avoid steep penalties taking effect for not having coverage in 2015.”

The consumers applied for coverage through Covered California since open enrollment began on Nov. 15. Although private insurance sold through Covered California is only available during open enrollment for most consumers, Medi-Cal enrollment is year-round. Individuals may apply for Medi-Cal online, through the Covered California Web portal, via mail by filling out a streamlined application and in person by visiting a county human services agency.

Covered California has tens of thousands of Service Center representatives, Certified Insurance Agents, Certified Enrollment Counselors and county eligibility workers to help consumers obtain health coverage as soon as possible.

To find in-person assistance or an enrollment event that is close to them, consumers should visit www.CoveredCA.com and click on the “Find Local Help” button.

The data Covered California released today relate to new enrollment only since open enrollment began on Nov. 15. Data about those consumers renewing their 2014 coverage will be released sometime in early 2015.

Covered California enrollees who had subsidized insurance in 2014 will receive health insurance marketplace statements they will use when filing their taxes due this April. Covered California will release more information about those forms next week.

Covered California is the state’s marketplace for the federal Patient Protection and Affordable Care Act. Covered California, in partnership with the California Department of Health Care Services, was charged with creating a new health insurance marketplace in which individuals and small businesses can get access to affordable health insurance plans. Covered California helps individuals determine whether they are eligible for premium assistance that is available on a sliding-scale basis to reduce insurance costs or whether they are eligible for low-cost or no-cost Medi-Cal. Consumers can then compare health insurance plans and choose the plan that works best for their health needs and budget. Small businesses can purchase competitively priced health insurance plans and offer their employees the ability to choose from an array of plans and may qualify for federal tax credits.

Covered California is an independent part of the state government whose job is to make the new market work for California’s consumers. It is overseen by a five-member board appointed by the governor and the Legislature. For more information about Covered California, please visit www.CoveredCA.com.

The Department of Health Care Services (DHCS) works to preserve and improve the physical and mental health of all Californians. DHCS provides health care services for more than 11.3 million Californians through Medi-Cal, including medical, dental, mental health, substance use treatment services, and long-term services and supports. This is accomplished through an investment of approximately $90 billion annually in public funds for the care of low-income families, children, pregnant women, seniors and persons with disabilities. DHCS focuses on delivering quality, effective services primarily through coordinated systems of care provided by 22 Medi-Cal managed care plans located in all of California’s 58 counties. For more information about DHCS, please visit www.dhcs.ca.gov.