Paul Sanchez
Health insurance is not mandatory at the federal level for adults in the US. However, certain states have implemented their own health insurance mandates, with penalties for non-compliance. These include California, Massachusetts, New Jersey, Rhode Island, and Washington D.C. The penalties for not having health insurance vary by state and are typically assessed via the state tax return. While the federal individual mandate penalty was eliminated at the end of 2018, it's important to check your state's specific regulations to understand the potential consequences of being uninsured.
| Characteristics | Values |
|---|---|
| Federal penalty for not having medical insurance | Eliminated at the end of 2018 |
| States with penalties for not having medical insurance | California, Massachusetts, New Jersey, Rhode Island, and Washington D.C. |
| Penalty amount in California | At least $900 per adult and $450 per dependent child under 18 |
| Maximum penalty amount in Massachusetts | 50% of the minimum |
| Exemption from penalty in Massachusetts | Individuals with incomes less than or equal to 150% of the Federal Poverty Level |
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What You'll Learn
- The federal mandate penalty was removed in 2018, but some states have their own
- California, DC, Massachusetts, New Jersey, and Rhode Island have penalties
- Exemptions are available for those who can't afford insurance
- Gaps in coverage must be accurately documented on state taxes
- Penalties are imposed through personal income tax returns
The federal mandate penalty was removed in 2018, but some states have their own
The individual federal mandate, which imposed a penalty on those without health insurance, was removed at the end of 2018. This change was implemented under the Tax Cuts and Jobs Act of 2017, meaning there is no longer a federal penalty for non-compliance. However, some states have introduced their own health coverage requirements, with penalties for residents who do not maintain coverage. These penalties are assessed through state tax returns.
Massachusetts, for example, has had an individual mandate and penalty in place since 2006. The state's Health Care Reform Act requires most adults aged 18 and over with access to affordable health insurance to obtain it. Those deemed able to afford health insurance but failing to comply are subject to penalties for each month of non-compliance. These penalties are imposed through the individual's personal income tax return and shall not exceed 50% of the minimum.
Similarly, California has a penalty for not having health coverage for the entire year, which is imposed by the California Franchise Tax Board. The penalty will be at least $900 per adult and $450 per dependent child under 18, with the revenue generated being used to offer additional state-funded health insurance subsidies. Rhode Island also implemented a similar individual mandate in 2020, with a penalty for non-compliance.
Other states that require health insurance but may not necessarily impose a fine for non-compliance include Vermont, New Jersey, Washington D.C., and Washington. While there may not be a penalty for a short gap in coverage, typically less than three consecutive months, it is important to accurately document this gap on state taxes. Therefore, while the federal mandate penalty has been removed, it is crucial to check the specific regulations and requirements of your state regarding health insurance mandates and penalties.
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California, DC, Massachusetts, New Jersey, and Rhode Island have penalties
Since 2019, there has been no federal penalty for not having health insurance in the US. However, certain states have implemented their own health coverage requirements, with penalties for residents who don't have insurance. These states include California, Massachusetts, New Jersey, Rhode Island, and the District of Columbia.
California enacted legislation in 2019 that created an individual mandate starting in 2020, with a penalty for non-compliance. The penalty is calculated as either a flat amount based on the number of people in the household or 2.5% of gross income above the filing threshold requirements. California uses revenue from this program to offer additional state-funded health insurance subsidies.
Massachusetts has had an individual mandate since 2006, when the state passed its healthcare reform law. The mandate requires that most residents have Minimum Creditable Coverage (MCC), and health insurance companies that operate in the state must mark plans as MCC-compliant. Massachusetts taxpayers are only required to have health insurance if they can afford it, as determined by an annual affordability schedule released by the state government.
New Jersey has imposed an individual shared responsibility payment on residents without health insurance since 2019, unless they qualify for an exemption. The penalty is based on household income and family size. The state uses penalty revenue to help fund its reinsurance program.
Rhode Island also implemented an individual mandate effective in 2020, with a penalty for non-compliance. The Rhode Island individual mandate requires all non-exempt residents to have health insurance coverage. Tax penalties are incurred once residents file their state taxes and amount to either $695 per adult and $347.50 per child or 2.5% of yearly household income, whichever is higher. The revenue generated from the penalty is used to help fund the state's reinsurance program.
The District of Columbia, also known as Washington, D.C., requires all residents to have health insurance coverage. Uninsured residents must pay a fine of up to $695 per adult and $347.50 per child, or 2.5% of their family income over the federal tax filing threshold, whichever is greater. There is a penalty cap of $3,258 per person for households of more than one person. Exemptions are available and can be claimed on tax returns or through DC Health Link.
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Exemptions are available for those who can't afford insurance
As of 2019, there is no longer a federal penalty for not having health insurance in the United States. The federal individual mandate penalty was eliminated at the end of 2018. However, some states have implemented their own health coverage requirements with penalties for non-compliance, such as California, Rhode Island, New Jersey, Massachusetts, and DC. These penalties are typically assessed via state tax returns.
Exemptions are available for those who cannot afford health insurance. Affordability exemptions are offered to those who meet certain financial criteria. To qualify for an affordability exemption, the lowest-priced coverage available to you would need to cost more than 7.97% of your household income. If you would have had to pay more than 8.05% of your household income for health coverage in 2015 and 8.13% in 2016, you may also be eligible for an exemption.
In addition to affordability exemptions, hardship exemptions are also available for those who have experienced financial or other hardships that prevent them from obtaining health insurance. Hardship exemptions typically cover the month before the hardship, the months of the hardship, and the month after. However, in some cases, exemptions may be granted for additional months or even a full calendar year. Examples of qualifying hardships include homelessness, eviction, utility shut-off, domestic violence, death of a family member, natural disasters, bankruptcy, substantial medical debt, and unexpected increases in necessary expenses due to caring for a family member.
If you are 30 or older and wish to enroll in a "Catastrophic" health plan, you will need to apply for an exemption. Catastrophic health plans offer lower-priced coverage that protects against high medical costs in the event of a serious injury. To enroll in such a plan, you must obtain an Exemption Certificate Number (ECN). If you are under 30, you are not required to obtain an exemption to enroll in a Catastrophic plan.
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Gaps in coverage must be accurately documented on state taxes
In most states, there is no longer a penalty for being without health insurance. The federal tax penalty for not having minimum essential coverage was eliminated after 2018. However, some states have implemented their own health coverage requirements, with penalties assessed via state tax returns for residents who don't maintain coverage. These states include California, New Jersey, Massachusetts, Rhode Island, and DC.
In Massachusetts, the Health Care Reform Law requires most residents over 18 who can afford health insurance to have coverage for the entire year or pay a penalty through their tax returns. There is a grace period for people who have a gap in coverage, allowing for lapses in coverage of up to 3 consecutive months without penalty. If you go 4 or more consecutive months without insurance, you need to determine if you have access to affordable health insurance. The penalty is calculated based on income, age, and family size, and can be no more than half the lowest-priced plan available through ConnectorCare health insurance.
California also has a state-specific health insurance requirement, with penalties for non-compliance. The penalty for not having coverage for the entire year will be at least $900 per adult and $450 per dependent child under 18 when filing state income tax returns. The revenue generated from these penalties is used to fund additional state-funded health insurance subsidies.
Rhode Island implemented an individual mandate effective in 2020, with a penalty for non-compliance. The penalty revenue is used to fund the state's reinsurance program, which aims to stabilize the individual/family market.
Therefore, it is important to accurately document any gaps in coverage on state tax returns to avoid penalties. While the federal penalty for not having health insurance has been eliminated, specific states have their own requirements and penalties, which must be considered when filing state taxes.
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Penalties are imposed through personal income tax returns
While there is no longer a federal requirement for adults to have health insurance, some states have implemented their own health coverage requirements, with penalties for non-compliance. These penalties are imposed through an individual's personal income tax returns.
Massachusetts, for instance, has had an individual mandate and penalty in place since 2006. The state's Health Care Reform Act requires most adults aged 18 and over with access to affordable health insurance to obtain it. Those who are deemed able to afford health insurance but fail to do so are subject to penalties for each month of non-compliance in the tax year. These penalties are imposed through the individual's personal income tax return and shall not exceed 50% of the minimum.
Similarly, Rhode Island implemented an individual mandate effective in 2020, with a penalty for non-compliance. The revenue generated from the penalty is used to fund the state's reinsurance program. California also has a penalty for not having health insurance, with a family of four facing a penalty of at least $2,700 for going uninsured for a whole year.
It is important to note that the specifics of state mandates and penalties vary, so individuals should check with their state's health insurance department or a qualified insurance professional to understand the rules and potential consequences in their area. While health insurance may not be mandatory at the federal level, it is crucial for financial security and access to essential medical care.
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Frequently asked questions
There is no federal law that makes health insurance a legal requirement. However, some states have implemented their own health coverage requirements, with penalties for residents who don't maintain coverage.
As of 2025, the states with penalties for being uninsured include New Jersey, Washington D.C., Massachusetts, California, and Rhode Island.
The penalty varies by state. In California, the penalty for not having coverage is at least $900 per adult and $450 per dependent child under 18. In Massachusetts, the penalty is based on income and affordability.
The penalty for being uninsured is typically paid through your state income tax return.
To avoid paying a penalty, you can enroll in health insurance during the Open Enrollment Period. You may also qualify for a Special Enrollment Period due to life events such as losing coverage, changing jobs, or welcoming a new family member.
