By - July 8, 2019

California & Rhode Island Individual Mandates Signed into Law

California Individual Mandate

California recently enacted their own individual mandate for health insurance. The California Governor signed the individual mandate bill AB-414 into law on July 2, 2019.  The State had already issued proposed legislation for a comprehensive individual mandate to take effect on January 1, 2020. This bill establishes the California Health Care Coverage Shared Responsibility Act requiring California residents to have qualified health insurance for themselves, their spouses and their dependents.

Financial assistance

The legislation will allow up to 850,000 lower-income residents to receive financial assistance in paying their premiums. California will offer subsidies to residents who earn less than 600% of the federal poverty level.  Also included with the law are state-funded programs to advertise and help residents navigate the health insurance marketplace. 

Individual mandate penalties

Californians who do not have health insurance coverage will owe a penalty. The penalty is equal to 2.5% of salary or $695 per adult and $347.50 per child, or up to $2,085 per family, whichever is greater. 

Included within the legislation are employer requirements to report the same information gathered by the IRS to satisfy IRS Code 6055 reporting requirements by March 31st of every year. The requirement to have insurance begins in January 2020 and the employer reporting requirement begins in 2021. The penalty for employers who fail to comply is $50 per individual not reported to the State. This means that if an employer has one employee in California, they would need to comply with the California individual mandate reporting for that employee.

California expects penalties to help cover most of the budget needed for the California Health Care Coverage Shared Responsibility Act.

Rhode Island individual mandate signed into law

On July 5, 2019, Rhode Island also signed their individual mandate into law and will require employers report to the state on individuals covered by their insurance, using the same information gathered by the IRS to satisfy IRS Code 6055. Due dates are to be determined still.

State individual mandates

Please see our comprehensive blog post for recent developments in State individual mandates, specifically for California, Vermont, Massachusetts, New Jersey, Rhode Island, and the District of Columbia. For more in-depth information on New Jersey, check out New Jersey Individual Mandate: Update on Reporting Requirements.

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