Minimum Coverage Provision

The State of California requires most individuals to obtain and maintain Minimum Essential Coverage (MEC) for themselves and their dependents, or pay a penalty. Federal and California law define Minimum Essential Coverage the same way.

Examples of coverage include:

  • Health coverage purchased through Covered CA
  • Health coverage purchased directly from a provider if it meets MEC (i.e. Blue Shield)
  • Foreign health coverage
  • Certain employer-sponsored insurance (if the plan meets MEC and financial requirements); this includes coverage offered to former employees, such as COBRA, and retiree medical coverage
  • Public insurance such as MC
  • Refugee Medical Assistance (RMA)
  • AmeriCorps coverage offered to AmeriCorps volunteers, which is a domestic counterpart to the Peace Corps
  • Certain types of Veterans coverage (Veterans health care program, Civilian Health and Medical Program (CHAMPVA), or Spina Bifida Health Care Program)
  • Self-funded student health insurance plans
  • Medicare plans for individuals over 65 or disabled

Minimum Essential Coverage (MEC)

Providers offering health insurance through Covered CA are required to provide certain services to meet the minimum essential coverage requirement. Similarly, a client is required to maintain health insurance with the following services to avoid a tax penalty. Federal and California law define Minimum Essential Coverage the same way.

  1. Ambulatory services,
  2. Emergency services,
  3. Hospitalizations,
  4. Maternity and newborn care,
  5. Mental Health and substance use services,
  6. Rehabilitative services,
  7. Laboratory services,
  8. Preventive, wellness, and chronic disease management,
  9. Pediatric Services, and (10)Prescription drugs

The State of California requires individuals to maintain health insurance. If an individual or family does not maintain health coverage, the state’s Franchise Tax Board (FTB) will impose a tax penalty.

Healthcare and MEC Requirement

Healthcare is NOT Required if… (No Penalty)

MEC is met if client has… (No Penalty)

Claimed on State tax return:

Income is below the tax filing threshold

  • Health coverage is considered unaffordable (exceeded 8.24% of household income for the 2020 taxable year)
  • Families’ self-only coverage combined cost is unaffordable
  • Short coverage gap of 3 consecutive months or less
  • Certain non-citizens who are not lawfully present
  • Certain citizens living abroad/residents of another state or U.S. territory
  • Members of health care sharing ministry
  • Members of federally-recognized Indian tribes including Alaskan Natives Incarceration (other than incarceration pending the disposition of charges)
  • Enrolled in limited or restricted-scope Medi-Cal or other coverage from the California Department of Health Care Services

Processed by Covered CA:

  • Religious conscience exemption
  • Affordability hardship
  • General Hardship
  • Medicare
  • MC or Children's Health Insurance Program (CHIP)
  • TRICARE (for service members, retirees, and their families)
  • Veterans health care program
  • An employer-sponsored program that meets the 60% minimum value provision
  • Private insurance that meets MEC
  • A grandfathered health plan in existence before 1/1/2014

Related Topics

Affordable Care Act