What will happen if I don’t have health insurance in 2023?
As of 2023, there is currently no federal fine for not enrolling in health insurance. The federal government eliminated the fine in 2019. Previously, this fine was known as the “Shared Responsibility Payment.” However, some states with individual mandates still have penalties for uninsured individuals.
States with Health Insurance Penalties
Only four states and one district still enforces a health insurance tax penalty for uninsured individuals. These states are:
- New Jersey
- Rhode Island
- Washington D.C.
Although this mandate might feel like a liability, these states implemented health insurance penalties to protect consumers. These states prevent health insurance companies from denying coverage to certain individuals by requiring health insurance. Due to the individual mandate, most of these states have reduced premiums for their residents compared to the national average.
Individual Mandate Effective Year and Insurance Requirement
|State||Effective Year||Insurance Requirement|
|Massachusetts||January 1st, 2006||ACA-compliant health insurance|
|New Jersey||January 1st, 2019||ACA-compliant health insurance|
|Vermont||January 1st, 2020||Self-reported ACA-compliant insurance|
|Rhode Island||January 1st, 2020||ACA-compliant health insurance|
|California||January 1st, 2020||ACA-compliant health insurance|
|Washington D.C.||January 1st, 2019||ACA-compliant health insurance|
- The individual mandate penalties for Massachusetts are set based on income related to the federal poverty level (FPL).
- The federal poverty level is based on family size. You can check your income status with this link.
|Individual Income Category||Penalty|
|For individuals making 150.1-200% of the FPL||$23/month $276/year|
|For individuals making 200.1-250% of FPL||$45/month $540/year|
|For individuals making 250.1-300% of FPL||$67/month $804/year|
|For individuals making above 300% of FPL||$159/month $1,908/year|
New Jersey Penalty
- The New Jersey individual mandate penalty, also known as the Shared Responsibility Payment (SRP), is based on income and family size. This penalty is capped at the average annual state premium for a Bronze health plan.
- This payment is added to your New Jersey Income Tax return.
- You can calculate your specific SRP on this page.
|Household Income and Size||SRP Ranges|
|Family with two adults, three dependents, an a household income under $200,000|
|Family with two adults, three dependents, and household and household income ranging from $200,000-$400,000|
|Family with two adults, three dependents, and a household income of $400,000 and above|
Rhode Island Penalty
- The Rhode Island individual mandate penalty is calculated based on annual household income and household size.
- It is calculated using either the percentage method or the per-person method.
- Using the percentage method, you will be charged 2.5% of your yearly income.
- If calculated per person, the penalty is $695 per person and an additional $347.50 per child under the age of 18 years old.
- You will be charged whatever amount is greater.
- The maximum penalty can cost no more than the average annual premium for a bronze health plan in the Rhode Island health insurance marketplace.
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- For California residents, the penalty is calculated per person in a household.
- If you do not have coverage for the entire year, you will be fined $850 per adult and $426 per dependent child under 28 years old.
- The penalty can also be calculated based on percentage; you could also be charged 2.5% of the gross income that exceeds the filing threshold.
- You will be charged whatever amount is greater.
- Use the California Penalty Estimator Tool to estimate your possible fine.
- The following lists sample penalty amount based on household size and income.
|Household Size + Income||Penalty|
|Individuals making less than $49,763||$800|
|Married couples making less than $92,100||$1,600|
|Family of 4 (2 adults, 2 children) making less than $142,000||$2,400|
Washington D.C. Penalty
- The Washington D.C. penalty can either be calculated by the percentage of total income or per person.
- The tax penalty can vary depending on how many months a family or individual goes without health insurance.
- For a year without coverage, you will be charged either:
- The maximum tax penalty is based on the average bronze health plan premiums cost.
How to File for an Exemption
Although these penalties can be very costly, these states have specific criteria exempting certain individuals from a fine. The eligibility for exemptions varies based on the state and is detailed in the following section.
Filing for an Exemption in Massachusetts
The following exemptions apply to Massachusetts residents who do not have health coverage. These exemptions are requested via Schedule HC on their income tax return.
- Connector Certificate of Exemption: this exemption is for any resident who claims they have tried to purchase health coverage but have no affordable plans available. When filing for this exemption, you must request an annual certificate.
- Exemption Based on Religious Belief: this exemption is for any individual whose religious beliefs are inconsistent with obtaining health coverage. However, if an individual receives this exemption but still seeks medical health care, they will be fined.
- Hardship Exemption: This exemption applies to any who the Connector deems that healthcare is not affordable. Hardship appeals are requested on your income tax return by filling out a set of worksheets called Schedule HC.
Filing for an Exemption in New Jersey
The following exemptions apply to New Jersey residents who do not have health coverage. These exemptions are reported when you file your New Jersey Income Tax return form using Schedule NJ-HCC.
- Income-related Exemption: if the lowest cost of the bronze level premium is greater than 8.05% of your household income, coverage is considered unaffordable, and you will be exempt from the tax penalty. Additionally, you are also eligible for an exemption if your household income is less than or equal to 38% of the federal poverty level.
- Short Gap in Coverage Exemption: if you are uninsured for less than three months, you may qualify for a Short-Gap exemption.
- Group Membership-related Exemption: if you are a part of a religious group in which medical health services are not allowed, you may claim a Religious Sect exemption. If your religious group shares medical expenses, you may claim a Health Care Sharing Ministry Exemption. Additionally, if you are a part of a federally recognized Native American Tribe, you may also be eligible for an exemption.
- Incarcerated Exemption: if you serve a term in prison or jail, you can claim this exemption.
- Hardship Exemption: this type of exemption includes a number of situations. You may qualify for hardship in New Jersey if you are:
- Facing eviction
- Experiencing utility shut-off
- Domestic violence
- Death of a family member
- Fire, flood, or other disasters
- Filing for bankruptcy
- Unpaid medical expenses
- U.S. Citizenship exemption: this exemption will apply if you have spent at least 330 full days outside of the U.S., have residency in a foreign country for a full year, or are a non-U.S. citizen.
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Filing for an Exemption in Rhode Island
The following exemptions apply to Rhode Island residents who do not have health coverage. These exemptions are available through HealthSource RI with this application.
- Hardship Exemption: This exemption applies to anyone who has experienced a hardship that prevented them from obtaining coverage. Check here to see if you qualify for any hardship exemptions. You can apply for this exemption through HealthSourceRI.
- Religious Exemption: for any members of a religious organization that prohibits them from seeking medical healthcare. You can apply for this exemption through HealthSourceRI.
- Affordability: for any individuals without health coverage that HealthSource RI determines cannot afford coverage based on household income. You can apply for this exemption through HealthSourceRI.
- Native American Tribe: for any individuals apart of a federally recognized indigenous tribe or someone who is eligible for services through the Indian Health Service. This exemption is claimed on your personal income tax return.
- Incarceration: for any individual residing in a jail, prison, or correctional facility. This exemption is claimed on your income tax return.
- Citizenship Status: This exemption applies to any individual with the following citizenship status:
- U.S. citizen residing in a foreign country for at least 330 days
- U.S. citizen that was a resident of a foreign country for a year
- Any individual who is not a U.C. citizen
- A non-resident alien
Filing for an Exemption in California
The following exemptions apply to California residents who do not have health coverage. These exemptions might require a specific application through the Covered California application or can be claimed when filing your state tax return.
- Income: any individual with income below the state tax filing threshold
- Short Coverage Gap: any individual with a coverage gap of 3 months or less
- Affordability: for an individual where the lowest-cost Bronze plan is greater than 8.17% of their income. It can also be for a household where the lowest-cost employer-sponsored family plan is more than 8.17% of their income.
- Citizenship Status: exemptions apply to any non-citizens or citizens living in a foreign country.
- Health Sharing Ministry: for an individual who is a member of the health sharing ministry.
- Federally-Recognized Native American Tribe: for any individual who is a member of a federally recognized tribe or is eligible for services through the Indian Health Service.
- Incarceration: for any incarcerated individuals
Filing for an Exemption in Washington D.C.
The following exemptions apply to residents of D.C. who do not have health coverage. These exemptions can be claimed on your tax return.
- Income: for anyone who is not required to file a tax return.
- $12,200 for single individuals
- $24,400 for married individuals
- Short Coverage Gap: for any individual who did not have coverage for less than 3 consecutive months
- Residency Status: for anyone who is not a resident of D.C. or for any U.S. citizen who lived in a foreign country or was not a lawful permanent resident.
- DC Healthcare Alliance Coverage: for any individuals covered under this managed care health plan for low-income individuals who do not qualify for Medicaid.
- Health-Sharing Ministry/Religious Exemption: for any members of a healthcare-sharing organization or a member of a religious group that prevents them from accepting healthcare.
- Native American Tribe: for any member of a federally-recognized indigenous tribe.
- Incarceration: for any individual currently serving a jail or prison sentence.
In summary, although the federal government repealed the fine for health insurance penalties in 2019, some states with an individual mandate can still fine their residents for being uninsured. These tax penalties are a protective measure for consumers but can still be very costly. However, each state has exemptions for its residents that would remove the tax penalty.
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Sophie is a 2024 Pharm D. candidate studying pharmacy at Rutgers University, New Brunswick. She has a passion for healthcare and writing and hopes to make meaningful contributions to healthcare transparency and accessibility. In her free time, she likes to take care of her houseplants, cook, and hang out with her cat.