Individual Mandate

A part of the Affordable Care Act (ACA) that requires most Americans to have health insurance that meets a minimum standard, or pay a fine. This fine is sometimes called the ACA “tax penalty.” Public insurance programs like Medicare or MO HealthNet, insurance offered through your employer, and insurance you buy through Healthcare.gov all count as meeting the individual mandate.

You do not have to pay a fine, even if you do not have health insurance, if:

  • You cannot afford the lowest cost plan option (because either the lowest cost plan is more than 8% of your income or your income is low enough that you don’t legally have to file taxes)
  • You have a religious objection
  • You are an American Indian
  • You are only without coverage for less than three months
  • You are an undocumented immigrant, or
  • You are incarcerated.

If you do not have health coverage, and you do not meet any of the exceptions, you will have to pay a fine each year you do not have coverage.

The tax penalty (individual mandate) continues to be law for 2017 and 2018

The Tax Cuts and Jobs Act, signed at the end of 2017, is set to end the tax penalty (individual mandate) for health coverage starting in 2019. It does not affect this rule for health coverage in 2017 and 2018.

The bottom line:

  • For 2017, if you didn't have coverage, you may still have to pay a penalty on your 2017 taxes (due in April of 2018).
  • For 2018, if you don't have coverage, you may still have to pay a penalty on your 2018 taxes (due in April of 2019).