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California Health Insurance Penalty 2026: Is There Still a Penalty, How Much Is It, and Who Is Exempt?
Written and reviewed by Dick Tracy, licensed health insurance broker (NPN 20414610) · Published September 18, 2026
Quick answer Yes. California still charges a tax penalty for going without health insurance, even though the federal penalty has been $0 since 2019. On the California return you file in 2026 (for tax year 2025), the penalty is at least $950 per adult and $475 per child, or 2.5% of your household income above the state filing threshold, whichever is higher. An uninsured married couple owes at least $1,900 and a family of four at least $2,850, according to the Franchise Tax Board. It is charged month by month, a gap of three months or less is exempt, and the last report shows 208,283 California households were assessed an average of $1,142. The amounts for tax year 2026 have not been published yet, and I will not guess at them. I educate, you decide.
I'm Dick Tracy, an independent health insurance broker. I'm licensed in California (NPN 20414610), one of 25 states I hold a license in, and I work with 80+ carriers. My office is in Buffalo, New York, and I work with Californians on the phone or on Zoom with the documents on the screen. I came from the healthcare side of this business, so there is no gag clause on me. You get the tips, the tricks, and the traps, including the one on this page: a lot of websites still show the wrong penalty number for children.
tax year 2025, at least
corrected by FTB in March 2026
threshold, if that is higher
Source: California Franchise Tax Board, Personal health care mandate and Tax News Flash, March 6, 2026.
How much is the California health insurance penalty?
The Franchise Tax Board (FTB) figures it two ways and charges you the higher one. The first way is a flat amount per person in your tax household. The second is 2.5% of your gross income above the California filing threshold for your filing status. Here are FTB's own sample numbers for tax year 2025, the return you file in 2026.
| Uninsured all year | Flat penalty (the minimum) | The 2.5% method is higher once income passes |
|---|---|---|
| One adult | $950 | $57,580 |
| Married couple | $1,900 | $115,146 |
| Family of four (two adults, two children) | $2,850 | $177,163 |
Source: FTB, sample penalty amounts for 2025. The flat amount tops out at $2,850 per household no matter how many people are uninsured (2025 Form FTB 3853 instructions).
FTB's worked example shows how the percentage method bites at higher incomes. A family of three earning $200,000 with no coverage: $200,000 minus the $61,720 filing threshold, times 2.5%, equals $3,457. That beats the flat amount, so $3,457 is the penalty. For a well-paid self-employed Californian, the percentage method is usually the one that applies.
Is the penalty charged per month? And is there a cap?
Yes to both. The penalty is one-twelfth of the annual amount for each month a person goes without coverage. Coverage for even one day in a month counts as coverage for that whole month. So six uninsured months costs a single adult about half of $950, not the full amount.
There is also a ceiling. The penalty can never be more than the state average premium for a bronze plan: $377 per person per month for 2025 (FTB prints that as $4,524 a year for one person and $22,620 for five or more), and $420 per person per month for 2026, per Covered California's published calculation. The cap only matters at high incomes, where 2.5% would otherwise run past the cost of a bronze plan.
The income threshold: below this, you owe no penalty
If your income is under California's filing threshold, your household is exempt and you do not even have to file a return to claim it. These are the tax year 2025 gross income thresholds for people under 65. The 2026 thresholds are not published yet.
| Filing status (under 65) | No dependents | One dependent | Two or more |
|---|---|---|---|
| Single or head of household | $22,941 | $38,774 | $50,649 |
| Married or registered domestic partners | $45,887 | $61,720 | $73,595 |
Source: 2025 Form FTB 3853 instructions, California gross income filing thresholds. Thresholds are higher at 65 and older.
One honest note. If your income is anywhere near these lines, you are very likely eligible for Medi-Cal or for a marketplace plan with a large subsidy, and that may be the best deal you can get. The lines by family size are on my Covered California income limits 2026 page.
Who is exempt from the California penalty?
Most exemptions are claimed right on your tax return using Form FTB 3853. Three of them have to be approved by Covered California first, which gives you an exemption certificate number to enter on the form.
| Exemption | Where you claim it |
|---|---|
| Income below the filing threshold | Automatic. No return needed just for this. |
| Short coverage gap: three consecutive months or less | Form FTB 3853 |
| Coverage was unaffordable: the cheapest option cost more than 7.28% of household income for 2025 (8.05% for tax year 2026, per Covered California) | Form FTB 3853 |
| Part-year resident or nonresident of California | Form FTB 3853 |
| Living abroad, or not lawfully present | Form FTB 3853 |
| Member of a federally recognized tribe | Form FTB 3853 |
| Incarcerated | Form FTB 3853 |
| Member of a health care sharing ministry | Form FTB 3853 |
| Household member born, adopted, or died during the year | Form FTB 3853 |
| Limited-scope Medi-Cal that does not count as full coverage | Form FTB 3853 |
| General hardship, affordability hardship based on projected income, or religious conscience | Apply through Covered California first, then enter the certificate number on Form FTB 3853 |
Sources: 2025 Form FTB 3853 instructions, types of coverage exemptions; Covered California, exemptions.
A word on the sharing ministry line, because people ask. The exemption is real, but a sharing ministry is not insurance. No insurance department stands behind it and no claim is guaranteed. Being excused from a $950 penalty does not help much if a $90,000 hospital bill goes unshared. I do not write them.
What coverage counts, and what does not
The law calls it minimum essential coverage. FTB's list includes: employer group coverage in the small or large group market, a self-insured health plan for employees, COBRA and Cal-COBRA, retiree coverage, individual plans bought through the marketplace or directly from a carrier, catastrophic plans, student health plans, Medicare Part A and Medicare Advantage, most Medi-Cal, CHIP, most TRICARE, and VA health care.
What does not count: coverage made up only of "excepted benefits." FTB names stand-alone dental and vision, workers' compensation, and policies limited to a specified disease. Accident plans and fixed indemnity plans are not on FTB's list of qualifying coverage either. That matches how I use them: as a second layer on top of a real plan, never as the only coverage. And short-term plans are not an option at all. California has banned them since January 1, 2019 (SB 910).
The practical test I use with clients
Before you enroll in anything, get it in writing that the plan is minimum essential coverage and that you will receive a Form 1095 for your tax file. A real group plan or a real individual major medical plan can answer that in one sentence. If the answer is a paragraph, keep your wallet in your pocket.
How to stop paying the penalty without overpaying for coverage
Paying the penalty buys you nothing. A single adult hands over $950 or more and still has no coverage on the day something happens. So the real question is which coverage fits, and in California that depends on your income and your health.
Healthy, self-employed or a small business owner, income too high for a subsidy
Look at a pre-established ERISA group plan first. ERISA is the 1974 federal law that governs employer benefit plans. There are group plans that already exist under it, and a solo owner can be merged into one: group rates, a true nationwide PPO network, and a policy you own. No employees required, and one simple compliance step I walk you through. Group health coverage is on FTB's list of coverage that satisfies the mandate. Here are all four California doors, in order.
Income under the subsidy lines
A subsidized plan or Medi-Cal may be your best deal, and I will tell you so. The trade-offs are real: narrower regional networks, an income estimate you have to get right, and paying credits back at tax time if you guess low. Run the 2026 subsidy calculator, preset for California, then bring me the number.
Between jobs or between clients
Watch the calendar. A gap of three consecutive months or less is exempt. Month four is where the penalty starts, and it reaches back to cover the whole gap. One day of coverage in a month counts for that month.
A serious diagnosis in the last few years
Guaranteed-issue coverage, for now. California individual plans cannot ask health questions, on or off the exchange. Take that protection, get well, and we revisit the other doors later.
The forms, and how FTB knows
- Covered all year: check the "Full-year health care coverage" box on your California return (Form 540, line 92). That is all.
- Any uncovered month: file Form FTB 3853 to claim an exemption or figure the penalty. The penalty carries to Form 540, line 92.
- Marketplace plan: you receive Form FTB 3895 from Covered California, along with the federal 1095-A.
- How FTB checks: insurers and employers must send FTB the same 1095-B and 1095-C forms they send the IRS, by March 31 each year.
- Want a number now? FTB has a free penalty estimator. Use it for a ballpark and Form 3853 for the real figure.
Common questions about the California health insurance penalty
Is there still a penalty for not having health insurance in California in 2026?
Yes. The federal penalty has been $0 since 2019, but California has had its own individual mandate since January 1, 2020, and it is still in force. If you go without qualifying coverage and have no exemption, the Franchise Tax Board adds the Individual Shared Responsibility Penalty to your California tax return. For tax year 2025, filed in 2026, that is at least $950 per adult and $475 per child.
How much is the California health insurance penalty per month?
It is one-twelfth of the annual amount for each uncovered month. At the 2025 flat rate that is about $79 a month for an adult and about $40 a month for a child, and more if 2.5% of your income above the filing threshold works out higher. Coverage for at least one day in a month counts as coverage for the whole month.
What is the income threshold for the California health insurance penalty?
If your income is below California's tax filing threshold, you owe no penalty. For tax year 2025 the gross income thresholds for people under 65 are $22,941 for a single filer with no dependents, $38,774 with one dependent, $45,887 for a married couple with no dependents, $61,720 with one dependent, and $73,595 with two or more, per the 2025 Form FTB 3853 instructions. The 2026 thresholds have not been published yet.
What are the exemptions from the California health insurance penalty?
The main ones: income below the filing threshold, a coverage gap of three consecutive months or less, coverage that would have cost more than 7.28% of household income for 2025 (8.05% for tax year 2026, per Covered California), being a part-year resident or nonresident, living abroad, tribal membership, incarceration, and membership in a health care sharing ministry. Those are claimed on Form FTB 3853. General hardship, affordability hardship based on projected income, and religious conscience exemptions must be approved by Covered California first.
Is there a California health insurance penalty calculator?
Yes. The Franchise Tax Board runs a free penalty estimator on its website. Treat it as a ballpark, because FTB itself says the accurate figure comes from Form FTB 3853. A quick rule of thumb for tax year 2025: $950 per adult plus $475 per child, up to $2,850 per household, unless 2.5% of your income above the filing threshold is higher.
Does a group plan or an ERISA plan count as coverage for the California mandate?
The Franchise Tax Board's list of minimum essential coverage includes employer group coverage and, in its words, a self-insured health plan for employees. So real group health coverage satisfies the mandate. What does not count is coverage made up only of excepted benefits, such as stand-alone dental or vision or a specified-disease policy, and accident and fixed indemnity plans are not on FTB's list either. Before you enroll, get it in writing that the plan is minimum essential coverage and that you will receive a Form 1095.
What is the California health insurance penalty for a family of four?
At least $2,850 for tax year 2025 if two adults and two children go uninsured all year, according to the Franchise Tax Board. That is also the most the flat method can charge any household. If 2.5% of the family's income above the filing threshold is higher, that amount applies instead, which happens once income passes about $177,163. Many websites still show $2,800, which was the figure before FTB corrected the child amount in March 2026.
Which other states have a health insurance penalty?
Besides California, Massachusetts, New Jersey, Rhode Island, and the District of Columbia charge a penalty for going uninsured, according to healthinsurance.org. Vermont has a mandate with no penalty. Everywhere else, including New York, there is no penalty, because the federal one was set to $0 starting in 2019.
Thirty minutes on the phone or Zoom, no fee, no hard sell. Bring your age, county, a rough income number, and how you use care. I put the California doors that fit you side by side, and I show you in writing that what you pick satisfies the mandate. I educate, you decide.
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