Penalty Details and Exemptions

What happens if you don’t have health insurance?

California law requires residents to have qualifying health insurance for each month of the year. If you go without insurance, you may have to pay a penalty when you file your state income tax return — unless you qualify for an exemption.

Not having health insurance also means you would have to pay the full cost of any medical services you need if you get sick or injured.

If you are weighing your options, you may be able to find a plan that costs less than you expect, especially if you’re eligible for financial help to lower your monthly premium.

How the Penalty Works

California residents generally must do one of the following:

• Have qualifying health insurance, or
• Pay a penalty when they file their state income tax return, or
• Get an exemption from the requirement to have insurance.

How much is the penalty?

The penalty for a full year without insurance is at least:

• $950 per adult
• $450 per child under 18

The penalty is applied by the California Franchise Tax Board (FTB), not Covered California. Use FTB’s Penalty Estimator to see what your household may owe.

Covered California can help you understand your exemption options and apply for certain exemptions, but we can't give tax advice. Contact the FTB or a tax professional for questions about your specific penalty amount or how to complete your tax forms.

Two Ways to Claim a Penalty Exemption

Not all exemptions work the same way. Some can be claimed directly on your state tax return, no application needed. Others require you to apply through Covered California before or during the year. The right path depends on your situation.

Exemptions You Can Apply for Through Covered California

You can apply for a Covered California exemption online, by fax or by mail.

General Hardship Exemption

If a hardship prevented you from getting health insurance, you may qualify for a general hardship exemption.

Qualifying situations include:

• Personal or family crisis: domestic violence or death of a close family member.
• Financial hardships: bankruptcy, homelessness, eviction or foreclosure in the past six months, utility shutoff, medical debt or a Medical Support Order.
• Unexpected income loss or added expenses: due to divorce; unexpected or sudden disability; or caring for an ill, disabled or aging family member.
• Natural disasters: fire, flood or human-caused disaster.
• Other circumstances: reviewed on a case-by-case basis.

What you will need to apply:

• Date of birth for all household members
• Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN), if you have one
• Proof to support your hardship claim

If your situation qualifies, apply for a general hardship exemption.

Affordability Hardship Exemption

If health insurance available to you through a job or Covered California is unaffordable based on your projected household income, you may qualify for an affordability hardship exemption.

Affordability is calculated using the lowest-cost health insurance plan available to you. For tax year 2026, insurance is generally considered unaffordable if your costs are more than 8.05 percent of your projected annual household income.

Important timing information:

• This exemption covers future months only, through the end of the current calendar year.
• You cannot apply after Nov. 30 for the current calendar year.
• To cover the entire next calendar year, apply at least 30 days before the end of the current year.
• If health insurance was unaffordable in the past, claim that exemption when you file your state income tax return instead.

What you will need to apply:

• Date of birth for all household members
• Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN), if you have one
• Information about any offers of job-related health insurance, with supporting proof
• Job information
• Expected household income, with supporting proof

If this applies to you, apply for an affordability hardship exemption.

Religious Conscience Exemption

You could be eligible for a religious conscience exemption if you or any of your dependents are members of a recognized religious sect opposed to accepting public or private insurance benefits, or that relies solely on a religious method of healing.

Already have a federal exemption certificate number (ECN) from HealthCare.gov? You may not need to reapply through Covered California. Call (800) 300-1506 to verify whether your existing federal ECN is still valid. If you were under 21 when you received your federal ECN and are now 21 or older, you will need to reapply.

Eligibility criteria include:

• Membership in an approved religious sect that is against accepting public benefits, including Medicare and Social Security benefits, as described in section 1402(g)(1) of the Internal Revenue Code
• An approved and signed IRS Form 4029, or
• You rely solely on a religious method of healing, with proof that your religious sect or division does not accept medical services and that you have not received medical services in the prior tax year

What you will need to apply:

• Date of birth for all household members
• Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN), if you have one
• Name and address of your religious sect
• Copy of IRS Form 4029 with required signatures, if applicable
• Proof related to religious method of healing, if applicable

If you qualify, apply for a religious conscience exemption.

Using Your Exemption When You File Taxes

When Covered California approves your exemption, your approval notice will include an exemption certificate number (ECN). Keep this notice; you will need the ECN when you file your California state income tax return.

Enter your ECN on Form FTB 3853 to confirm that Covered California granted you an exemption from the penalty. The form is also where you report health insurance information for all household members to confirm that Covered California granted you an exemption from the penalty.