FOR IMMEDIATE RELEASE
Jan. 13, 2015
Media Line Contacts:
Covered California
(916) 205-8403
California Department of
Health Care Services
(916) 440-7660
COVERED CALIFORNIA STEPS UP MESSAGING
THAT TAX PENALTIES ARE GOING UP IN 2015
FOR UNINSURED CALIFORNIANS
Financial Penalties Rising This Year Mean It’s Smarter to Get Covered
Than to Pay Steep Tax Penalties for 2015
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.”
(more)
COVERED CALIFORNIATM
CALIFORNIA DEPARTMENT
OF HEALTH CARE SERVICES
1601 EXPOSITION BOULEVARD, SACRAMENTO, CA 95815
1501 CAPITOL AVENUE, SACRAMENTO, CA 95814
WWW.COVEREDCA.COM
WWW.DHCS.CA.GOV
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.
Penalties for Not Having Insurance in 2015
Household
Size
Annual Income
$30,000
$40,000
$60,000
$80,000
$100,000
$150,000
$394
$594
$994
$1,394
$1,794
$2,570
$488
$594
$994
$1,394
$1,794
$2,794
$813
$813
$813
$1,188
$1,588
$2,588
$975
$975
$975
$1,188
$1,588
$2,588
1 (single filer)
2 (single filer with
one dependent
under 18)
3 (married filing
jointly with
one dependent
under 18)
4+ (married filing
jointly with two
dependents
under 18)
Note: Penalty scenarios based on Tax Policy Center calculator:
http://taxpolicycenter.org/acacalculator.cfm.
(more)
COVERED CALIFORNIATM
CALIFORNIA DEPARTMENT
OF HEALTH CARE SERVICES
2
WWW.COVEREDCA.COM
WWW.DHCS.CA.GOV
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 yearround. 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.
(more)
COVERED CALIFORNIATM
CALIFORNIA DEPARTMENT
OF HEALTH CARE SERVICES
3
WWW.COVEREDCA.COM
WWW.DHCS.CA.GOV
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.
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.
About the Department of Health Care Services
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.
###
COVERED CALIFORNIATM
CALIFORNIA DEPARTMENT
OF HEALTH CARE SERVICES
4
WWW.COVEREDCA.COM
WWW.DHCS.CA.GOV
Health Care
& Taxes
Sign up by Feb. 15
Avoid the Penalty for Not Having Insurance
It’s never smart to avoid having health insurance — one accident can lead to an emergency room
visit and tens of thousands of dollars in bills, or learning you have cancer when it’s too late to treat it.
Now there’s another reason to get insured — taxes.
The “Shared Responsibility Payment” is a new tax penalty that Americans have to pay this year if they
can afford health insurance but choose not to buy it. It’s called a shared responsibility payment because
everyone in the United States is now required to be part of our health insurance system, buying health
coverage for themselves and their families rather than relying on others to pay for their care. Starting for
2015, those who don’t buy health insurance may be subject to the penalty which is $325 per person
in a household or 2% of their income, whichever is greater.
It’s Getting More Expensive to Go Without Insurance
2014
PENALTIES* BY TAX YEAR
Jim
$
497
$
$
Eduardo
& Julia
$
earn 70K/yr
2016
594
299
earns $40K/yr
$
2015
988
$
736
2,085
$
The best way to avoid the penalty is to buy health insurance right now during open enrollment,
which continues to Feb. 15. Of those already enrolled, almost 90 percent got financial help to cover their
premiums. For more information and to find local, no-cost assistance, go to
CoveredCA.com. It makes far more sense than paying the penalty at tax time.
* 2014 amounts based on IRS estimations, www.irs.gov/Affordable-Care-Act/Individuals-and-Families/ACA-IndividualShared-Responsibility-Provision-Calculating-the-Payment. 2015 and 2016 amounts estimated using ACA calculator –
http://taxpolicycenter.org/taxfacts/acacalculator.cfm.