Is It Illegal to Not Have Health Insurance in California?

No, it is not illegal to not have health insurance in California in the criminal sense: you won’t be arrested, charged, or prosecuted for going uninsured. But California does require most residents to carry qualifying health coverage, and if you don’t have it and don’t qualify for an exemption, you owe a tax penalty when you file your state return. For 2025, that penalty starts at $950 per uninsured adult.

What California’s Mandate Actually Says

The individual mandate took effect on January 1, 2020, after Congress zeroed out the federal Affordable Care Act penalty. California passed Senate Bill 78 to create its own version and keep coverage rates from dropping.¹ The rule is codified at California Revenue and Taxation Code Section 61000.²

Every California resident must maintain “minimum essential coverage” for each month of the year, and the requirement extends to your spouse or domestic partner and any dependents you claim. The consequence for not doing so is financial, not criminal. There are no jail terms attached, no misdemeanor charges, nothing that goes on a criminal record. The Franchise Tax Board collects any penalty through your state income tax return.

What Counts as Qualifying Coverage

You satisfy the mandate if you’re enrolled in any of the following:

Employer-sponsored group health insurance through your job or a spouse’s job
An individual or family plan purchased through Covered California
Medi-Cal, California’s Medicaid program
Medicare
COBRA continuation coverage
A university student health plan recognized by the federal government as minimum essential coverage

Short-term health plans, fixed-indemnity policies, and other limited-benefit products do not count. If those are your only coverage, California treats you as uninsured for mandate purposes.³

How Much the Penalty Costs

The Individual Shared Responsibility Penalty is the higher of two calculations: a flat dollar amount based on the uninsured people in your household, or a percentage of your household income.⁴

For the 2025 tax year, filed in spring 2026, the flat amounts are:

$950 per uninsured adult
$475 per uninsured child under 18

A family of four with two adults and two children who went the entire year without coverage would owe $2,850 under the flat calculation.⁴ The income-based alternative is 2.5% of your gross household income above the filing threshold for your tax status. You pay whichever figure is larger.

The base amount written into the statute is $695 per adult, and each year’s figure is recalculated using a cost-of-living adjustment tied to the California Consumer Price Index. Penalty amounts for the 2026 tax year haven’t been published yet; expect a modest increase over the 2025 numbers.

Partial-year coverage matters. If you were uninsured for only part of the year, the penalty is prorated by month. Three months without coverage means roughly one-quarter of the annual penalty, assuming you don’t qualify for the short gap exemption.

Who Doesn’t Owe a Penalty

Several exemptions can eliminate what you owe. Some you claim directly on your tax return; others require an application through Covered California, which issues an Exemption Certificate Number if you’re approved.⁵

Short Coverage Gap

If you went without insurance for three consecutive months or fewer, you can claim the short coverage gap exemption using code “C” on Form FTB 3853.⁶ Two catches: if the gap runs longer than three months, none of those months qualify, and if you had multiple short gaps in the same year, only the first one is exempt.

Unaffordable Coverage

Coverage is treated as unaffordable if the cheapest Bronze-level plan through Covered California, or the cheapest employer plan available to you, costs more than 8.05% of your projected household income for the 2026 tax year.⁷ You can claim this on your return without applying through the marketplace first.

Income Below the Filing Threshold

If your household income falls below the California tax filing threshold, you don’t owe a penalty. Check the box in Part II of Form FTB 3853 and you’re done.⁸

General Hardship

Financial hardship exemptions cover situations like homelessness, eviction, bankruptcy, or large medical debt. These require an application through Covered California, which reviews them individually.⁵

Status-Based Exemptions

Several groups are exempt automatically and claim the exemption directly on the return:

Members of federally recognized tribes, based on access to Indian Health Service
Incarcerated individuals, other than those awaiting trial, for the months they are in custody
Non-citizens who are not lawfully present, who remain exempt from the mandate itself; since January 2024, income-eligible undocumented immigrants of all ages can now qualify for full-scope Medi-Cal⁴

Religious Conscience

If you belong to a recognized religious sect that opposes accepting insurance or public benefits, or you rely solely on a religious method of healing, you can apply through Covered California with documentation such as an approved IRS Form 4029. A valid federal religious conscience certificate from HealthCare.gov can be used on your California return without reapplying.⁹

How the State Actually Enforces It

Enforcement runs through your state tax return, not through the courts. If everyone in your household had qualifying coverage for all 12 months, you check the “Full-year health care coverage” box on Form 540, 540NR, or 540 2EZ and move on.⁴

If you had a gap or are claiming an exemption, you file Form FTB 3853 with your return. That form is where you report exemptions by month, enter any Exemption Certificate Number from Covered California, and calculate any penalty you owe.⁸ Insurers and government programs also report coverage data to the Franchise Tax Board, so what you report is cross-checked.

If you owe the penalty and don’t pay, the FTB collects it the same way it collects other unpaid state taxes. That can include wage garnishments and other standard tax collection actions.¹⁰ There are no criminal penalties for going uninsured.

If You Think a Penalty Is Wrong

Your first step is documentation. Proof of employer-sponsored insurance, Medi-Cal enrollment records, or marketplace confirmation can resolve many disputes without formal escalation.

If the issue isn’t a simple documentation error, you can request penalty abatement based on reasonable cause. Examples include an insurer giving you incorrect information about whether your plan qualified, or a tax preparer making an error on your return.¹¹ California also offers a one-time penalty abatement in some situations, though that program applies to timeliness penalties rather than the shared responsibility penalty specifically.¹²

If the FTB denies your claim, you can appeal to the California Office of Tax Appeals, which is separate from the FTB. The deadline to appeal appears on the notice you receive, and missing it forecloses the appeal.¹³ For collection actions like wage garnishments over an unpaid penalty, a tax professional or attorney familiar with FTB procedures can negotiate payment arrangements or challenge the assessment. Hourly rates vary widely; expect somewhere in the range of $200 to $500 per hour depending on complexity and experience.

1
Covered California. Health Insurance Is Required By Law In California Or Face A Tax Penalty
2
California Legislative Information. California Revenue and Taxation Code 61000
3
Franchise Tax Board. Health Care Mandate
4
Franchise Tax Board. Personal Health Care Mandate
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Covered California. Penalty Details and Exemptions – Exemptions
6
Franchise Tax Board. Instructions for California Form 3853 Health Coverage Exemptions and Individual Shared Responsibility Penalty
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Covered California. Affordability Hardship Exemption
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Franchise Tax Board. 2025 Instructions for California Form 3853 Health Coverage Exemptions and Individual Shared Responsibility Penalty
9
Covered California. Religious Conscience Exemption
10
Franchise Tax Board. Wage Garnishments for Taxes
11
Franchise Tax Board. FTB 2917 Reasonable Cause – Individual and Fiduciary Claim for Refund
12
Franchise Tax Board. One-Time Penalty Abatement
13
Franchise Tax Board. Appeal a Decision