Mission Viejo, CA asked in Consumer Law, Tax Law and Health Care Law for California

Q: To avoid a tax penalty, how many months in 2024 does one over 18 have to be covered with health insurance in CA?

I read that one can have a three month lapse in health coverage to avoid a tax penalty, though it did not show a year.

1 Lawyer Answer
James L. Arrasmith
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  • Estate Planning Lawyer
  • Sacramento, CA
  • Licensed in California

A: Based on current California law, the health insurance mandate requires individuals over the age of 18 to be enrolled in minimum essential coverage for the full duration of 2024, with strictly limited exceptions, in order to avoid a tax penalty. There is no longer a "3 month lapse" allowance in 2024. However, there are some qualifying life events like loss of a job which could exempt someone from the penalty if there are gaps in coverage.

In specific detail:

- The state tax penalty for lack of health insurance, known as the individual mandate penalty, was reinstated in California starting in 2020.

- For the 2024 tax year, individuals must maintain essential coverage for the entire year or qualify for a full-year exemption to avoid paying the penalty for any month they or their dependents were uninsured.

- Limited exceptions exist for low-income residents or those experiencing certain qualifying life events. Events like losing workplace coverage, getting divorced, or having a baby can result in exemption.

- Short coverage gaps can still incur a pro-rated penalty unless the full year is exempted. There is no standard 3 month non-penalty lapse anymore.

So in summary, all adults who can afford insurance are required to maintain enrolled status for themselves and dependents throughout 2024 under California law and healthcare policy. Consulting a tax professional for guidance on qualification exceptions like economic hardship or life circumstances that may warrant exemption is advisable.

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