No, not at the federal level. The Affordable Care Act's individual mandate penalty has been $0 since 2019, so you won't owe a federal tax penalty for going uninsured. However, California, Massachusetts, New Jersey, Rhode Island and Washington D.C. have their own mandates with state tax penalties, and Vermont has a mandate without a penalty.
Back when the Affordable Care Act first took effect, most Americans were required to have health coverage or pay a penalty on their federal tax return. A lot has changed since then, and the rules are now a patchwork that depends on where you live.
Here’s what the law actually requires today, who still faces penalties, and why going without coverage can be risky even when it’s legal.
Is Health Insurance Mandatory in the US Today?
The ACA’s individual mandate technically still exists in federal law, but Congress reduced the penalty to $0 starting in 2019. In practical terms, there’s no federal consequence for not having health insurance. You won’t owe anything extra on your federal return just for being uninsured.
That doesn’t mean health insurance is optional everywhere. Several states and D.C. created their own requirements.
States With Their Own Health Insurance Mandates
| Location | Individual mandate? | Penalty for going uninsured? |
|---|---|---|
| California | Yes | Yes, through the state tax return |
| Massachusetts | Yes | Yes, through the state tax return |
| New Jersey | Yes | Yes, through the state tax return |
| Rhode Island | Yes | Yes, through the state tax return |
| Washington D.C. | Yes | Yes, through the D.C. tax return |
| Vermont | Yes | No financial penalty |
If you live in one of these places, you may owe a penalty when you file your state taxes for any months you or your dependents went without qualifying coverage. Penalty amounts and calculations are set by each state and can change, so check your state tax agency or health exchange for current figures.
Are there exemptions?
Yes. States with mandates generally offer exemptions in certain situations, such as when coverage is unaffordable based on your income, for short gaps in coverage, for certain hardships, or for some religious reasons. Each state defines its own rules and process, so look them up before assuming you qualify.
What About Employers? Do They Have to Offer Coverage?
This is a separate rule called the employer mandate. Employers with 50 or more full-time-equivalent employees, known as Applicable Large Employers, must offer affordable, minimum-value health coverage to their full-time employees (those working 30 or more hours a week) and their dependent children, or they may owe a penalty.
A few things the employer mandate does not do:
- It doesn’t require small employers with fewer than 50 full-time-equivalent workers to offer coverage.
- It doesn’t require employers to cover part-time employees.
- It doesn’t force you to accept your employer’s plan.
Note that if your employer offers affordable coverage that meets minimum value standards, you generally won’t qualify for Marketplace premium tax credits.
Other Situations Where Coverage May Be Required
- Students: many colleges require enrolled students to have health insurance, either through a school plan or proof of other coverage.
- Some visa holders: certain visa categories, such as some exchange visitor programs, come with health insurance requirements.
- Court orders: a divorce decree or child support order may require a parent to provide health coverage for children.
Why You Might Want Coverage Even If It’s Not Required
Just because there’s no federal penalty doesn’t mean going uninsured is a good idea. Consider the risks:
- Big medical bills: one emergency room visit, broken bone or hospital stay can cost more than years of premiums.
- No out-of-pocket maximum: ACA plans cap what you pay for covered in-network care each year. Without insurance, there’s no cap.
- Limited enrollment windows: you can’t just buy a Marketplace plan the day you get sick. Open Enrollment generally runs November 1 to January 15 in most states, and outside it you usually need a qualifying life event.
- Missed preventive care: ACA plans cover many preventive services like screenings and vaccines without cost-sharing when you use in-network providers.
Ways to Get Affordable Coverage
- Check Medicaid or CHIP. Eligibility depends on income and state rules, and you can apply year-round.
- Look at the Marketplace. Premium tax credits can lower your monthly cost depending on your income and household size.
- Stay on a parent’s plan. Young adults can generally stay on a parent’s plan until age 26.
- Consider a catastrophic plan. If you’re under 30 or qualify for a hardship exemption, a catastrophic plan offers low premiums and protection against worst-case costs.
- Review employer options. Even if you skipped your work plan before, you may be able to enroll at the next open enrollment or after a qualifying event.
- Use COBRA when leaving a job. It generally applies to employers with 20 or more employees and usually lasts up to 18 months, though you pay the full premium.
What Happens at Tax Time
If you live in a state with a mandate, your state tax return will usually ask whether you, your spouse and your dependents had qualifying coverage for each month of the year. Insurers, employers and exchanges typically send forms that document your coverage, such as Form 1095-A for Marketplace plans or Forms 1095-B and 1095-C from insurers and employers. Keep these with your tax records.
If you received advance premium tax credits through the Marketplace, you’ll also need to reconcile them on your federal return using Form 8962, even though there’s no federal penalty for being uninsured. Say you got a raise mid-year and didn’t update your Marketplace application: you could owe back part of the credit. Reporting income changes during the year helps avoid surprises.
Bottom Line
Is health insurance mandatory in the US? Not federally, since the penalty dropped to $0 in 2019. But if you live in California, Massachusetts, New Jersey, Rhode Island or Washington D.C., you can still owe a state penalty, and Vermont has a mandate without one. Even where it’s not required, coverage protects you from bills that can be financially devastating. Rules and penalties change, so check HealthCare.gov, your state exchange or tax agency, or talk to a licensed agent about your situation.
Frequently asked questions
Will I pay a federal tax penalty for not having health insurance?
No. The federal individual mandate penalty has been $0 since 2019, so going uninsured won't add a penalty to your federal tax return.
Do I have to accept my employer's health insurance?
No, you can decline it. Just know that if the offer is affordable and meets minimum value standards, you generally won't qualify for Marketplace premium tax credits.
Can I buy health insurance anytime if I change my mind?
Not usually. Marketplace and most employer plans let you enroll only during open enrollment or after a qualifying life event, though Medicaid and CHIP accept applications year-round.
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This article is for general information only and is not insurance, legal, tax or medical advice. Rules, coverage and prices vary by state, plan and insurer. Check your policy documents and speak with a licensed agent, your HR department or HealthCare.gov before making decisions.
