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The Penalty for Being Uninsured

The Penalty for Being Uninsured

Most people are now required to have health insurance (“minimum essential coverage”). If you choose not to have health coverage, you will have to pay a fee when you file your federal tax return for that year.

The fee is sometimes called the "penalty," "fine," "individual responsibility payment," or "individual mandate."

Estimate Your Fee

The penalty for 2016

Whichever is higher: 2.5% of your gross household income, or $695 per individual ($347.50 per child). Maximum penalty for 2016: $2,085.

Some people are exempt from the requirement to have coverage and do not have to pay a fee even if they remain uninsured.

Exemptions and how to apply

Paying the fee

  • You pay the fee when you file your federal tax return for the year if you don’t have coverage or qualify for an exemption for each month during the year.
  • If you don’t pay the fee, the IRS will hold back the amount of the fee from any future tax refunds. There are no liens, levies, or criminal penalties for failing to pay the fee.
  • You owe the fee for any month that you, your spouse, or your tax dependents don’t have health insurance that qualifies as minimum essential coverage or that you don’t qualify for an exemption. If you have coverage or an exemption for part of the year, the fee is 1/12 of the annual amount for each month you (or your tax dependents) don’t have coverage.
  • If you’re uncovered only 1 or 2 months, you don’t have to pay the fee at all. Learn about the “short gap” exemption.
  • Using the per-person method of calculating the fee, you pay only for people in your household who don’t have insurance coverage or an exemption.
  • Using the percentage method of calculating the fee, only the part of your household income that’s above the yearly tax filing threshold ($10,150 for individuals, $20,300 for couples filing jointly in 2014, the most recent year available) is counted.

If you pay the fee, you're not covered

It's important to remember that even if you pay the penalty, you still don't have any health insurance coverage. Without coverage, you are still responsible for 100% of the cost of your medical care.