Most people must have basic (minimum essential) coverage or pay a penalty.
Who is not required to have health insurance?
- Individuals and families with incomes that do not require them to file federal income tax returns
- People who would have to pay more than 8 percent of family income for insurance after taking premium tax credits and employer contributions into account
- People who are incarcerated
- Undocumented immigrants
- Members of federally recognized American Indian or Alaska Native tribes
- People who do not obtain coverage because they belong to religious groups that object to insurance coverage, who belong to a health care sharing ministry, or who qualify for a hardship exemption
To learn more about exemptions, visit HealthCare.gov.
What happens if I do not have insurance?
Many people who can afford health insurance but decide not to buy it will owe penalties when they file their taxes. You will not owe a penalty if you are uninsured for less than three months.
What are the penalties?
The penalty grows each year as follows:
- 2014: The greater of $95 per adult or 1 percent of taxable income above the filing limit. (The filing limit refers to the fact that federal income taxes are due from people who earn more than a threshold amount; the penalty is calculated on the amount above the threshold.)
- 2015: The greater of $325 per adult or 2 percent of taxable income above the filing limit.
- 2016: The greater of $695 per adult or 2.5 percent of taxable income above the filing limit.
- After 2016: The tax penalty increases annually based on a cost-of-living adjustment.
- Children: The penalty for a child is half that of an adult. Only the first two children are counted in calculating the penalty.
What happens if I do not pay the penalty?
- You may be without coverage for up to three months without triggering the penalty. After that, you pay the penalty for any month that you are not covered.
- If you are required to pay a penalty but do not, the IRS will send you a notice. If you do not pay the penalty, the IRS can reduce the amount of a future tax refund. Learn more at irs.gov.