Individual Mandate Overview
- An employer-sponsored plan
- An individual insurance policy
- A government plan such as Medicare or Medicaid
- A U.S.-issued expatriate plan
As of January 1, 2019, the Individual Mandate requiring most Americans to have health insurance or pay a penalty has been effectively repealed due to the Tax Cuts and Jobs Act which zeroed out the penalty.
For 2018, most individuals were still required to maintain coverage or pay a penalty when they filed their 2018 federal income tax return in early 2019. Penalties applied for each month they didn't have coverage.
If someone didn't buy insurance, he or she may be responsible for a fee called the "individual shared responsibility payment." This penalty is paid when filing a federal tax return.
Enrollment in individual health insurance
While the mandate has been effectively repealed, there are no changes to how individuals can obtain individual health insurance or subsidies for coverage. People can enroll in individual health insurance directly with an insurance company or through the health insurance marketplaces.
Federal premium subsidies are only available to those who enroll in individual coverage through the marketplace. About 70 percent of people who buy coverage through the marketplaces qualify for subsidies.
Exemptions from the Individual Mandate
- A gap in coverage that is less than three consecutive months
- The lowest-cost, self-only plan available is considered "unaffordable"
- A qualifying hardship or meeting certain other conditions (e.g., income below 100 percent of federal poverty level, religious reasons, or not living in the United States)
Individual Mandate reporting
Insurers and employers must provide the Internal Revenue Service (IRS) and each covered individual with information about whether they had minimum essential coverage during each month of the year. Individuals will need this information when they file their income tax returns.
This reporting requirement has not been affected by the zeroing out the penalty starting in 2019.
Additional details on the Individual Mandate
The annual penalty is calculated two different ways – as a fixed amount for each person without coverage or as a percent of annual household income. Individuals subject to this penalty pay the larger of these two amounts.
|Fee for not having health insurance||2018||2019|
The greater of:
The annual marketplace enrollment period begins each November 1 and ends on December 15 for coverage that takes effect on the following January 1.
Individuals who lose coverage or have a life event such as marriage or the birth of a child may be eligible for a special marketplace enrollment period during other times of the year.
If you have any questions about enrollment through a marketplace or want to enroll, please visit HealthCare.gov or call 1-800-318-2596.
Most exemptions can be claimed using Internal Revenue Service (IRS) Form 8965, Health Coverage Exemptions, when filing a tax return. However, certain exemptions must be granted in advance from the public marketplace.
For more information on available exemptions, applicable forms, and whether they need to be granted by a public marketplace in advance, please visit healthcare.gov or review these resources.
- Form 1095-A, Health Insurance Marketplace Statement, sent to individuals who are enrolled in coverage through the marketplace
- Form 1095-B, Health Coverage, sent to individuals who have health coverage that is not reported on Form 1095-A or Form 1095-C
- Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, sent to individuals who have coverage through an employer with 50 or more full-time employees
These forms must be sent by the end of January, following the year of coverage to help people complete their individual tax returns. 1095 Forms should also be shared with covered adult dependents who file their own taxes.
In some instances, people may receive more than one 1095 Form. For example, if an individual had more than one coverage provider or a change in coverage or employers during the year, multiple forms would be issued.
For more information on 1095 Forms, please visit the IRS's FAQ page