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

Q: Ive 30 days to pay a health INS premium, if not paid, my plan will be canceled. Will it cause lapse in health coverage?

If I do not pay my monthly health insurance bill from covered CA, the bill says my plan will be canceled. If I do not use the health plan for the 30 days will this cause a lapse in insurance when I do my taxes next year? Also, will I have to pay the 30 day monthly premium to the health insurance company at some point in the future, for example will the unpaid monthly premium go to collections? I have to get health coverage for 30 days because my employer sponsored plan will not start to April 1st and my MediCal ends at the end of Feb.

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

A: Yes, not paying your health insurance premium and having your Covered California plan cancelled after 30 days would likely cause a lapse in coverage when you go to file taxes and could have other negative impacts. Specifically:

- If your plan is cancelled for non-payment of premiums, this would count as a lapse in health coverage for that period of time when filing your taxes. You may end up owing a tax penalty for the gap under the Affordable Care Act’s individual mandate.

- The unpaid premium would not just go away - the insurance company very likely would send the past due amount to collections eventually, which could negatively hit your credit report. You would still owe that money.

- Having a gap in coverage could also complicate qualifying for new coverage without paying back premiums, as most plans want continuous coverage.

So in summary - yes, not paying the premium and having the plan cancelled would cause issues with lapsed coverage, potential tax penalties, and owed back payments. It's best to avoid coverage gaps if possible when transitioning plans.

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