INDIVIDUAL MANDATE PENALTY
Learn more about the individual shared responsibility payment.
INFORMATION FOR 2018 PENALTY AND EXEMPTIONS
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1, 2019, the individual mandate requiring most Americans to have health insurance or pay a penalty has been effectively repealed due to the Tax Cuts and Jobs Act which zeroed out the penalty.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 if they failed to do so when they file their 2018 federal income tax return in early 2019.
To comply with this mandate for 2018, individuals needed to have "minimal essential coverage," which is obtained through an employer-sponsored plan, an individual insurance policy (purchased on or off the public Marketplace), a government-sponsored plan such as Medicare or Medicaid, or a U.S.-issued expatriate plan.
If someone chose not to buy insurance, he or she may be responsible for a fee called the “individual shared responsibility payment.” This penalty is payable when filing a federal tax return and is based on the number of months during the calendar year that the individual did not have minimum essential coverage.
The annual penalty is calculated two different ways – as a fixed amount for each person without coverage (which is adjusted annually for inflation) or as a percent of annual household income. Individuals subject to this penalty pay the larger of the two amounts.
|Fee for not having health insurance||2018||2019|
|The greater of:||
In some cases, an individual may qualify for an exemption from the individual mandate. Exemptions include:
- 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 other certain conditions (e.g., income below 100 percent of federal poverty level, religious reasons, or not living in the United States)
How and when to request an exemption
Most exemptions can be claimed using Internal Revenue Service (IRS) Form 8965, Health Coverage iExemptions, 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 the IRS Individual Shared Responsibility Provision Exemptions page.