What Is The Penalty For Not Having Health Insurance?

The Affordable Care Act mandates that person who can afford a health plan but chooses not to purchase one must pay a penalty known as the individual shared responsibility payment. You will owe the fee for any month that you and your dependents are without minimum essential coverage mandated by the ACA and is paid each year when filing your taxes. This fee is however waived if you are without coverage for more than two months in a particular year.

The penalty is calculated in two different ways:

1. It can either be a percentage of your annual income with a maximum no higher than the total of one years premium of a Marketplace bronze health plan.

Or

2. Is a flat fee penalty per person with adults being charged a much higher fee than children.

Whichever of these options is higher is the penalty you will owe. These penalty fees and percentages have changed every year since its inception so it best to do your own research HERE in order to calculate your own penalty.

Here’s the breakdown of fines for uninsured adults by year:

• 2015: 2% of total annual income or $325 per adult; $162.50 for each child, whichever is higher.
• Maximum of $285 per family
• 2016-18: 2.5% of total annual income or $695 per adult; $162.50 per each child under 18, whichever is higher.
• Maximum of $2085 per family
• 2019: The penalty will be removed starting in 2019. Those that were uninsured in 2018 must still pay the penalty on 2018 tax form, however.

*uninsured children under 18 are assessed at 50% of the minimum penalty

The fines are pro-rated, meaning that if you are uninsured for just part of the year, you will have to pay 1/12^th of the penalty for each month you are uninsured.

There is also a grace period: If you are uninsured for less than two consecutive months of any year, you won’t have to pay a fine and may qualify for an exemption. If you insured on an ACA compliant for at least one day of a particular month, you will not be penalized for that month and considered fully covered and not subject to any penalty for that month.

Paying the penalty does not mean you have health insurance coverage. You will still be responsible for 100% of the costs of your medical care.