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ACA Penalties Find out about the penalties if you don’t have health insurance.

Did You Know?

Most people already have health insurance that meets the minimum ACA requirements.

ACA Penalties Defined

The ACA penalty is a fee or fine for not having health insurance coverage if you can afford it. There are certain groups of people who will not have to pay the penalty.

Frequently Asked Questions

What is the Affordable Care Act (ACA) individual mandate and why do we have it?

As of 2014, the ACA requires most Americans to have health insurance. The good news is that most people already have health coverage that meets the requirement, such as Medicare, Medicaid, TRICARE or veteran’s coverage, or a plan through an employer, or in some cases health coverage bought on one’s own. For those who need it, the health care law creates more ways to shop for coverage and more options to get financial help to pay for it. Under the law’s consumer protections, no one can be turned down for coverage because they have a pre-existing condition.

How will I know if my coverage is good enough to meet the health care law requirement to have health coverage and avoid the penalty?

See what coverage, costs, and comparisons to consider when shopping for health insurance.

Most people already have health coverage that meets the requirement to have coverage and won’t have to pay a penalty. Medicare, Medicaid, TRICARE or veteran's coverage as well as coverage from an employer meet the requirement. Also, health coverage bought in the Health Insurance Marketplace or the Small Business Health Options Program (SHOP) will meet the requirement. Your health insurer or employer will let you know if your coverage meets the requirement. You can find this information on the Summary of Benefits and Coverage.

Will I have to pay a fee if I don’t have health insurance?

If you don’t have health coverage that meets the minimum ACA requirements, you may have to pay a penalty. In 2017, for an individual, the penalty starts at $695 a year, or up to 2.5 percent of income, whichever is greater. The penalty will rise each year. The health care law says that certain people may not have to pay a penalty, including:

  • People for whom the regular payments (called premiums) are more than about 8 percent of their income
  • People with income so low they don’t have to file taxes
  • People living in the United States illegally (undocumented immigrants)
  • People who have a gap in coverage of less than three months
  • People who are exempt because of their religious beliefs
  • American Indians and Alaska Natives
  • Americans living abroad for at least 1 year
  • People who have experienced a hardship (considered on a case-by-case basis)
  • People in prison

To find out more about the ACA and the Health Insurance Marketplace, read The Health Care Law: More Choices, More Protections.

If you think you may be exempt from paying a penalty, you must apply for a waiver from your Health Insurance Marketplace.

I have Medicare. Will I have to pay a penalty for not having health insurance?

Medicare is the federal health insurance program for people who are 65 or over and some younger people with disabilities. Your Medicare coverage meets the health care law requirement to have health coverage. So, you do not have to make any changes and will not have to pay a penalty.

What happens if I don’t have insurance and have to pay a penalty?

The Internal Revenue Service will collect the penalty through your tax return. As of 2014, all plans and employers offering coverage must provide proof of coverage, which you should include with your tax filings. 

Do I have to do anything to show I have health coverage on my tax forms?

When you file your federal income taxes for 2016, your form will include a line where you can indicate whether or not you had health coverage for the year.

  • If you had coverage through your job or you purchased coverage on your own (not through the Health Insurance Marketplace), you will receive information from your employer or insurance company showing the months you had coverage. If you had Medicare or Medicaid coverage, the form will come from the corresponding government agency. You can use that information on your 2016 tax return.
  • If you purchased coverage from the Health Insurance Marketplace, you’ll receive a form from the marketplace. The form will include information about your coverage and any tax credits you received. You’ll need to enter tax credit information from the form when prompted on your tax return.

Glossary

  • Penalty

    the fee if you don’t have a health plan that qualifies as minimum essential coverage. In 2017, the fee for an individual is $695 a year, or up to 2.5 percent of income, whichever is greater. The penalty will rise each year. The health care law says that certain people may not have to pay a penalty, such as people with low incomes.

  • Individual mandate

    the Affordable Care Act requires nearly everyone to have health insurance that meets minimum standards. With some exceptions, people who do not maintain health insurance coverage will have to pay a penalty.

  • Minimum Essential Coverage

    the type of coverage an individual needs to meet the individual responsibility requirement (individual mandate) under the Affordable Care Act. This includes coverage bought in the Health Insurance Marketplace, job-based coverage, Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), TRICARE and certain other coverage.

Read More Glossary Terms

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