Are You Insured?

“I don’t provide insurance for my employees but I recently heard everyone is now required to be insured. What is that about and how does it affect me?”

Your HR Survival Tip

When the Affordable Care Act (ACA or ObamaCare) was enacted years ago, the mandate was for companies of 50 or more full-time employees (or full-time equivalents) to provide health insurance for employees. If you were required to provide insurance and didn’t, you are subject to a tax penalty. California has now enacted its own version of this for individuals through SB78 and individuals must have coverage by 1/1/2020.

This law created an individual mandate requiring all Californians to have health insurance coverage. Everyone is affected…your employee, their spouse or domestic partner, and their dependents. If any individual is not covered, they will be subject to penalties when filing their state income tax return in 2021. Right now it appears the penalty starts at $695 per adult and half of that per child, but it does depend on your total family income. The penalty can be avoided if they have proof of coverage for every month going forward.

There are exceptions if the premium for the individual or family is over a certain percentage of income. The premium would need to be more than 8.4% of the household income. There are other exemptions but check them out carefully if you plan to count on one of them. Options for no-and low-cost coverage are also available through California’s MediCal program.

If you offer health insurance but have employees (or their families) who are not covered, they must obtain coverage. Individuals can use the California Exchange ( and may be eligible for financial assistance. The other option is to go through an insurance broker…brokers do not cost you anything and they may be able to find you a better plan for less money. Plus, you have someone to contact with questions.

This new law does not affect companies but may affect your employees. The deadline to obtain coverage is January 1st so please spread the word to your employees and make sure they understand the consequences of doing nothing. Insurance coverage is no longer an option, it is now a law. If you need an introduction to a broker who works with individuals (instead of companies), let us know!

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