Financial Penalties Rising This Year Mean It’s Smarter to
Get Covered Than to Pay Steep Tax Penalties for 2015
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| Click to download this fact sheet as a PDF file. |
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.
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| Note: Penalty scenarios based on Tax Policy Center calculator: http://taxpolicycenter.org/acacalculator.cfm. |
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.
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.
