Changes To California Health Insurance In 2020 & 2021

February 2nd, 2021

There were 4 major changes to California health insurance in 2020 & 2021. Here’s what you need to know:

  1. You are now required to have health insurance in California under a state mandate even though the federal mandate was lifted in 2019.
  2. You will be assessed a California state insurance tax penalty in 2020 and beyond if you chose not to buy qualified health insurance for the year or do not qualify for and claim an exemption.
  3. There is a new state subsidy program that can help Californians that did not previously qualify for federal assistance.
  4. President Biden re-opened the enrollment window in an executive order that allows individuals to purchase coverage for 2021 until February 15, 2021.

As a result of the removal of the federal non-compliance tax penalty in 2019, according to Covered California, California saw an increase in health insurance premiums and a decrease in families with health insurance coverage.   To combat this, California lawmakers reinstated the individual mandate for residents of California starting in 2020.  The state tax penalty for not having health insurance can be very steep at the greater of either 2.5% of household annual income or a flat dollar amount of $750 per adult and $375 per child (source: California Franchise Tax Board), so it is imperative that everyone looks into obtaining coverage.

There are approximately 12 exemptions for which individuals without insurance can try to qualify. Three require an application through Covered California:

  1. General Hardship;
  2. Affordability Hardship;
  3. Religious Conscience.

The remaining 9 can be claimed when you file your state tax return.  To get detailed information on each of these exemptions, visit

For 2020 taxes, you will need to bring/submit the following documents with your other tax information:

  • Form 1095-A and FTB 3895 if you obtained health insurance through Covered California for reconciliation of the premium tax credits you received. Covered California is required to send you the forms;  OR
  • Form 1095-B or 1095-C if you had coverage from another source (employer, private insurance, Medicare, Medicaid, etc.) as proof of coverage. OR
  • The exemption certificate number (ECN) provided by Covered California in the exemption approval notice if you are exempt from having insurance coverage.

If you did not have health insurance coverage for 2020, unfortunately, you should expect to pay a penalty when you file your 2020 state taxes.  To estimate the penalty ahead of filing your taxes, go to