California Introduces New Health Insurance Mandate

On June 27th, Governor Gavin Newsom signed his first state budget into law for 2020. With that, Senate Bill 78 was also signed into law which reintroduces the tax penalty for not having minimum essential health insurance coverage beginning in 2020. President Trump’s latest tax law removed the tax penalty federally for not having health insurance although several states have countered with their own state penalties to stabilize the risk pools and premiums. SB 78 imposes a tax penalty on Californians who do not enroll in health insurance for up to 2.5% of their gross income. The tax penalty would not apply to immigrants residing in California illegally.

SB 78 would also increase the health insurance premium tax credits cutoff to 600% of the Federal Poverty Level (FPL) versus the current subsidy cutoff of 400% of the FPL. For example, an individual making nearly $75,000 in 2020 or a family of 4 making as much as $154,500 would be eligible for premium tax credits to assist with their health insurance premiums. This would dramatically impact many middle income Californians who were just above the 400% FPL cutoff but who struggled to pay the full cost of their health insurance premiums, especially with the dramatic health insurance premium increases seen over the last 5 years.

The reintroduced tax penalty is estimated to bring in revenues of $317 million for the coming year which will go towards funding the subsidies for the people earning between 400-600% of the Federal Poverty Level. The penalty will also prevent healthy individuals from avoiding enrolling in health insurance, thus stabilizing the risk pools and limiting annual premium increases. We at Solid Health Insurance Services would like to see all Americans insured, especially considering medical bills are the leading cause of bankruptcy in the United States at 66.5% of all bankruptcies.

At Solid Health Insurance Services, we are dedicated to keeping our clients informed about the latest trends in the health, dental, vision, life and long-term care insurance. For more information, please do not hesitate to contact us at 310-909-6135 or at info@solidhealthinsurance.com.

from Solid Health Insurance https://ift.tt/2NtTNhJ