Healthcare Compliance Bulletin: California Enacts State Individual Mandate

New Compliance Update.
OVERVIEW

On June 28, 2019, California Governor Gavin Newsom signed into law a state budget for 2019-2020 that establishes a state individual mandate, effective Jan. 1, 2020. This state-based individual mandate will require California residents to maintain acceptable health coverage or pay a penalty, beginning in 2020.

This new mandate was enacted in response to the effective elimination of the federal individual mandate penalty under the Affordable Care Act (ACA). The ACA’s individual mandate penalty was reduced to zero under the Tax Cuts and Jobs Act, beginning in 2019.

ACTION STEPS

California is the fourth state to enact its own health insurance individual mandate, following Massachusetts, New Jersey and Vermont. The District of Columbia also implemented an individual mandate, effective in 2019. Individuals in California should ensure that they are in compliance with the state individual mandate beginning in 2020.

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