What Happens If I Dont Pay Covered California Premiums?

What are the consequences of not paying for Covered California insurance? If you fail to maintain coverage throughout the year, you may incur penalties when you file your 2022 state income tax return in 2023. Specifically, for each adult in your household without coverage, you can expect a minimum penalty of $850. Similarly, for each dependent child under the age of 18 in your household without coverage, you can anticipate a minimum penalty of $425. These penalties are designed to encourage individuals and families to have continuous health insurance coverage and to help fund California’s healthcare programs.

Is it necessary to repay Covered California subsidies? Yes, it is possible that you might need to reimburse a portion of the financial assistance you received if the government finds that you received an excessive amount of Advance Premium Tax Credits (APTC) due to changes in your income that you didn’t promptly report to Covered California. This process is referred to as “reconciliation.” In essence, if your income changes significantly during the year and you fail to inform Covered California, the government may require you to return a portion of the APTC funds you received, which helps align your subsidy with your actual income. This financial adjustment ensures that the subsidies are accurately distributed to eligible individuals and households. It is essential to stay informed about any income changes and promptly update Covered California to avoid unexpected repayment obligations.