Chauncey grew up on a farm in rural northern California. At 18 he ran away and saw the world with a backpack and a credit card, discovering that the true value of any point or mile is the experience it facilitates. He remains most at home on a tracto.
Chauncey Crail ContributorChauncey grew up on a farm in rural northern California. At 18 he ran away and saw the world with a backpack and a credit card, discovering that the true value of any point or mile is the experience it facilitates. He remains most at home on a tracto.
Written By Chauncey Crail ContributorChauncey grew up on a farm in rural northern California. At 18 he ran away and saw the world with a backpack and a credit card, discovering that the true value of any point or mile is the experience it facilitates. He remains most at home on a tracto.
Chauncey Crail ContributorChauncey grew up on a farm in rural northern California. At 18 he ran away and saw the world with a backpack and a credit card, discovering that the true value of any point or mile is the experience it facilitates. He remains most at home on a tracto.
Contributor Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
| Deputy Editor, Insurance
Updated: May 22, 2024, 1:35pm
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
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The Affordable Care Act (ACA or, as it may be more commonly known: Obamacare) of 2010 was a major step in requiring and standardizing accessible health insurance at the federal level. The law also mandated that nearly all Americans have coverage, but Congress repealed that individual mandate penalty in 2017.
As of 2022, only five states (California, Massachusetts, Rhode Island, New Jersey and Vermont) and the District of Columbia require all eligible residents to declare annual proof of health insurance coverage on state taxes. If you’re uninsured and don’t qualify for an exemption, you must pay a tax penalty determined by the state (except Vermont, which does not levy any fees).
The federal government no longer penalizes you for not having health insurance. But a handful of states have an individual mandate that requires residents to have coverage.
When the Affordable Care Act was passed, one of the key parts of the legislature was the individual shared responsibility provision, known more colloquially as the individual mandate. This provision was the closest the United States came to requiring universal health coverage.
The individual mandate was the requirement, under the Affordable Care Act, that all eligible American citizens and permanent residents have basic health insurance (also referred to as minimum essential coverage, or MEC).
From 2014 until 2019, any individual without coverage was subject to tax penalties from the IRS. These federal penalties added up to $695 per uninsured adult or 2.5% of your income, depending on which amount was higher.
Congress repealed the mandatory financial penalties at a federal level in 2017. Although individuals are still technically required to have health insurance, fines are no longer imposed on anybody who doesn’t have coverage. This updated legislation took effect in 2019 and rendered the individual mandate irrelevant.
In response, a handful of states enacted their versions of the individual mandate with the tax penalties included.
The mandates vary, but all but Vermont have a penalty collected when an uninsured individual files state taxes.
The only places with an individual mandate for health insurance are:
Qualifying plans, exemptions and penalty criteria differ by state, so it’s important to make sure you know the fine print of your state’s system.
Generally speaking, any qualifying plan must meet the ACA’s standards for Minimum Essential Coverage. Penalties may not be applied if you were only uninsured for a few months. For example, in California, if you were uninsured for less than three months in a year, you’re not subject to a penalty.
Other states, such as Connecticut, Hawaii and Washington, are also considering adopting healthcare mandates.
Here is more information about each state’s individual mandate:
Effective: Jan. 1, 2020
Qualifying Plans: Available here
Exemptions Available?: Yes
Tax Penalty?: Yes, paid to the California Franchise Tax Board
State Healthcare Services: Covered California
All California residents must have either minimum essential coverage or qualify for an official exemption. A wide range of qualifying healthcare plans are offered, including some student health plans and Medicare Part A or Part C. Exemptions are available, but they must be either claimed on your state tax return or processed by Covered California.
If you’re not eligible for an exemption and don’t have healthcare, you will face penalties of at least $900 per adult and $450 per dependent, assuming you’ve been without healthcare all year. You can calculate the expected penalty amount using the California Franchise Tax Board’s free online service.
Effective: January 1, 2019
Qualifying Plans: Available here
Exemptions Available?: Yes
Tax Penalty?: Yes
State Healthcare Services: DC Health Link
Known officially as the Washington D.C. Individual Taxpayer Health Insurance Responsibility Requirement, the mandate requires all residents to have health insurance coverage.
Uninsured residents must pay whatever fine is greater: up to $695 per adult and $347.50 per child, or 2.5% of their family income over the federal tax filing threshold. There is a penalty cap of $3,258 per person for households of more than one person. That means a five-person household has a $16,290 penalty cap.
Exemptions, claimed on your tax return or through DC Health Link, are available.
Effective: May 1, 2007
Tax Penalty?: Yes (Scroll to “Penalties for Tax Year 2021”)
State Healthcare Services: Massachusetts Health Connector
Massachusetts has had an individual mandate since 2006, when the state passed—with bipartisan support—its healthcare reform law. The mandate requires that most residents have Minimum Creditable Coverage (MCC), and all health insurance companies that operate in Massachusetts must mark plans with an MCC-compliance notice. Residents then report coverage on taxes.
The state levies tax penalties for not having health coverage based on income. For families with an income at or below 150% Federal Poverty Level (FPL), individuals must pay $22 per month or $264 for the year. A 300% FPL family, on the other hand, will individually owe $127 per month or $1,524 for the year.
Unlike other states with individual mandates, Massachusetts taxpayers are only required to have healthcare insurance if they can afford it. A detailed affordability schedule is released every year by the state government, detailing what ranges for premiums are considered “affordable” depending on your income bracket.
You’re not penalized if you can’t reasonably purchase an MCC-compliant plan within your specified affordable range. You will be penalized if you could purchase a plan but did not. Besides having a short gap in coverage, this is the only possible exemption to the individual mandate.
Effective: January 1, 2019
Exemptions Available?: Yes (through the NJ Health Insurance Mandate Coverage Exemption Application)
Tax Penalty?: Yes
State Healthcare Services: Get Covered NJ
The New Jersey Health Insurance Market Preservation Act requires minimum essential health coverage for all qualifying individuals. Uninsured individuals must pay the tax penalty, or Shared Responsibility Payment (SRP). New Jersey bases the SRP on household income and family size. Individual taxpayers can expect to pay anywhere between $695 to $3,492 depending on their situation. Families may pay higher penalties depending on family size.
Possible exemptions include having a low income, experiencing hardship, having a short coverage gap or lacking affordable coverage options. Exemptions must first be claimed using the specific exemption application, then report it on your state taxes.
Effective: January 1, 2020
Qualifying Plans: See “Health Coverage”
Exemptions Available?: Yes (see “Exemptions”)
Tax Penalty?: Yes (see “Tax Penalty”)
State Healthcare Services: HealthSource RI
Much like California and New Jersey, the Rhode Island individual mandate requires all non-exempt residents to have health insurance coverage.
Tax penalties are incurred once you file your state taxes, and amount to whichever is higher: $695 per adult and $347.50 per child or 2.5% of your yearly household income. Depending on the type of exemption, you can either claim them on your taxes or through HealthSource RI.
Effective: January 1, 2020
Qualifying Plans: N/A
Exemptions Available?: N/A
Tax Penalty?: No
State Healthcare Services: Vermont Health Connect
Vermont requires all residents over 18 to report health insurance on state taxes, but there is no penalty if you’re uninsured. Because of this, lists of qualifying plans and exemptions to avoid the penalty aren’t applicable.
The Department of Vermont Health Access recommends all residents have health insurance and provides a health insurance marketplace, but at least in policy, the state doesn’t differ from the federal legislature except in requiring yearly coverage reports on taxes.
There are many reasons why it’s important to maintain health insurance. A comprehensive health insurance plan can cover most or all medical and hospital expenses if you’re injured, sick or require an operation. It can also offset costs for preventative care like screenings, check-ups and vaccines that are essential for maintaining your health long-term.
A comprehensive health insurance plan can protect you from shouldering thousands of dollars in fees and potential debt. Some types of health insurance pay qualifying costs upfront; others will offer you reimbursement. Either way, you’re saving a significant amount of money in the event of an expensive emergency, accident or unexpected diagnosis.
Knowing that you or your loved ones won’t go bankrupt from receiving the care you may, quite literally, need to survive is a peace of mind only having a good health insurance plan can bring.
If you don’t have health insurance, it may seem like a daunting task to navigate the complex bureaucracy of enrolling in a plan. There are plenty of services—and options—to help get you coverage as easily and quickly as possible.
The ACA marketplace is a service offering insurance plans for individuals, families and small businesses.
The platform is designed to match you with the best insurance plan for your situation based on several factors, such as income and recent life events. You can view plans that are available for your ZIP code.
Each plan lists all relevant details, such as the deductible, copayments, estimated monthly premiums and the health services covered under the plan. The ACA marketplace can be a way to find affordable health insurance coverage if you qualify for premium tax credits and subsidies. Note that you can only sign-up for a plan during the open enrollment period (usually from November to January for the coming year). You will otherwise need to qualify for a special enrollment period, available due to change in circumstance or life event, such as getting married, having a child and moving out of state.
By law, any employer with 50 or more full or equivalent part-time employees must provide at least 95% of these employees with health insurance or face a penalty from the IRS. The group health insurance coverage will also extend to dependents age 26 and younger, and often your spouse. The employer chooses the health plans and pays a large portion of the premius.
By purchasing coverage directly from a health insurance company, you can cut out the middleman and have the ultimate flexibility in the services, deductibles and premiums you choose.
Private health insurance doesn’t always have to be expensive: since you typically choose a plan based on what services you think you’ll need, if you only need basic coverage, it may end up being a cheaper option than even the health insurance marketplace. While looking into private health insurance can be time-consuming, it is often worth the effort, especially if you are not eligible for any of the other types of health insurance listed above.
Medicaid is a state and federally-run program responsible for providing low-income individuals, of any age, with health insurance. Depending on the size of your household and your total estimated income for the year, you can receive either free or low-cost health coverage Medicaid at any point during the year. The exact services available under Medicaid depend on your state, but all states guarantee essential healthcare coverage. You can apply for Medicaid through the Health Insurance Marketplace or your state’s Medicaid agency.
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