Did you know that if you don’t have health insurance in 2025, you could face a fine on your state tax return? This penalty, officially called a “Violation of Individual Contribution Responsibility,” is imposed by the California Franchise Tax Board (FTB) on residents who fail to maintain qualifying health coverage. But how much will the penalty cost? Can you qualify for an exemption? And most importantly, how can you avoid it altogether?
At Skyline Benefit, we help Californians navigate health insurance options to stay covered and avoid costly fines. In this blog, we’ll break down how the 2025 California health insurance penalty is calculated, who is exempt, and the best ways to secure affordable coverage.
How Much is the 2025 California Health Insurance Penalty?
If you don’t have minimum essential coverage (MEC), you’ll owe the higher of two amounts:
1. Fixed Amount Based on Household Size:
- $900 per uninsured adult.
- $450 per uninsured child.
2. 2.5% of Your Household Income Above the Filing Threshold
Example Penalty Calculation for 2025:
Let’s say a family of three (two adults, one child) has a household income of $200,000:
- Fixed Penalty Calculation:
- ($900 × 2 adults) + ($450 × 1 child) = $2,250
- Income-Based Penalty Calculation:
- 2.5% of income above $59,917
- ($200,000 – $59,917) × 0.025 = $2,300.15
Since the income-based penalty is higher, this family would owe $2,300.15 in penalties for 2025.
You can visit the Franchise Tax Board’s website and use their Penalty Estimator Tool. This tool is to help you correctly calculate how much your 2025 health insurance penalty for no health insurance might be.
Who is Exempt from the California Health Insurance Penalty?
Not everyone has to pay the penalty. You may qualify for an exemption if you meet any of these criteria:
- Low Income – If your household income is below the state tax filing threshold.
- Short Coverage Gap – If you went without coverage for three consecutive months or less.
- Unaffordable Coverage – If the cheapest available health plan (Covered California Bronze plan or employer-sponsored plan) costs more than 7.28% of your income in 2025.
- Certain Non-Citizens – If you are not lawfully present in the U.S.
- Out-of-State Residents & Citizens Abroad – If you live in another state or outside the U.S.
- Health Care Sharing Ministry Members – Those who participate in recognized health care sharing ministries.
- Native American & Alaskan Native Tribes – Members of federally recognized tribes or those eligible for services through the Indian Health Service.
- Incarceration – If you were in jail or prison (excluding pending charges).
- Limited Medi-Cal Coverage – If you were enrolled in restricted-scope Medi-Cal.
- Economic Hardship – If you can prove severe financial distress.
How to Apply for a Health Insurance Penalty Exemption
Some exemptions, like low income or Medi-Cal enrollment, are automatic. Others, like religious exemptions, require an application through Covered California.
Need Help Avoiding the 2025 California Health Insurance Penalty?
Skyline Benefit is a certified insurance agency with Covered California. Our agents can help individuals and families find affordable health plans that meet California’s coverage requirements, ensuring you stay compliant and avoid unnecessary fines.
Schedule a consultation today. Call us at: (714) 888-5112