FOR IMMEDIATE RELEASE
Feb. 20, 2015
Media Line: (916) 205-8403
COVERED CALIFORNIA OFFERS CONSUMERS
A CHANCE TO MINIMIZE THEIR TAX PENALTY
BY ENROLLING IN A HEALTH INSURANCE PLAN
New Category Created for Special Enrollment Allows Those Unaware of a
Tax Penalty for Being Uninsured to Sign up for Coverage by April 30
SACRAMENTO, Calif. — Covered California is offering a special enrollment opportunity
for consumers who did not know or understand there was a tax penalty for being
uninsured in 2014 or who learned they may face a penalty for 2015.
“For the first time, health care and taxes now are linked arm in arm,” Covered California
Executive Director Peter V. Lee said. “The law requires everyone to be insured, and if
you’re not, you may face a significant financial penalty when you file your taxes this
year.”
From Feb. 23 until April 30, 2015, consumers are eligible to apply for health coverage
during special enrollment by attesting that they did not realize there was a tax penalty.
To attest to this fact, they can select “Informed of Tax Penalty Risk” when filling out an
application at CoveredCA.com.
The new tax penalty for being uninsured — known as the “shared responsibility
payment” — motivated many consumers to purchase insurance this year during the
Nov. 15-Feb. 15 open-enrollment period via Covered California. Unfortunately, many
people who are supposed to purchase insurance may be unaware of the penalty and
surprised when they go to their tax preparation professional for help.
“We don’t want anyone to feel blindsided by the shared responsibility payment,” Lee
said. “That’s why we are establishing this limited-time special-enrollment that builds on
the broader availability of coverage for Californians who have a change of circumstance
making them eligible outside of open enrollment. If you didn’t realize the tax
consequences of not having insurance, you can enroll in a Covered California plan
starting on Monday, Feb. 23 until April 30.”
(more)
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The tax penalty aside, Californians who have a life-changing event — for example,
having a baby, getting married, losing their health care coverage because they have
changed jobs or moving to another area — can qualify for a special-enrollment period
through Covered California. They can sign up for coverage as long as they do so within
60 days of the qualifying life event.
For the first time, consumers who are filing their taxes this year may be paying a penalty
for not having health insurance. And the penalty for going without insurance in 2015 will
go up significantly: Those who can afford insurance but choose not to buy it will be
subject to paying $325 per adult in a household or 2 percent of their income, whichever
is greater.
What does that mean in real-world terms for people filing their taxes right now?
According to the Internal Revenue Service:
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A single person earning $40,000 a year will pay a penalty of nearly $300 for
being uninsured in 2014.
A family of four earning $70,000 a year will pay nearly $500 for being uninsured
in 2014.
Those penalties increase for consumers without insurance this year.
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That same individual making $40,000 will see their penalty jump from almost
$300 to nearly $600.
That family of four will see its bill jump from nearly $500 to almost $1,000.
“That’s $1,000 for not having health insurance,” Lee said. “That’s $1,000 that could be
used to provide protection and security to their family and give them the peace of mind
they deserve. Because of the subsidies available, many people will find it actually costs
less to buy insurance than to pay the penalty.”
During the final weeks of open enrollment, Covered California served consumers who
literally went straight from their tax adviser to a certified enroller after learning they
would lose hundreds of dollars because they were uninsured in 2014.
“We know this will continue throughout the upcoming weeks as more and more people
do their taxes and discover how this new era of health care works,” Lee said. “We don’t
want there to be any surprises, and we want to make sure that everyone who is eligible
gets covered.”
As of Monday, Feb. 23, consumers may enroll at CoveredCA.com and can find the
nearest Certified Enrollment Counselor or Certified Insurance Agent to help them enroll.
Consumers also can call the Covered California Service Center, at (800) 300-1506,
where a representative will help them. To get across the finish line for open enrollment,
with coverage effective on March 1, however, consumers cannot enroll without the help
of an agent, a counselor or Covered California’s Service Center.
(more)
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“We encourage everyone to research their options through Covered California to see
what health care coverage options are available to them,” Lee said.
About Covered California
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.
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