Tax and Penalty Information
In 2018, the Individual Mandate under the Affordable Care Act is still in effect. That means that you are required to have health insurance, and to prove that you have health insurance when you file your taxes. Information below, in both English and Spanish, is meant to help you. Here is information from the IRS. In addition, here is the list of exemptions, and whether you get them through the Marketplace or through filing your taxes. You can find out which exemption you should list on the IRS Form 8965 instructions (scroll down for the details).
Will I have to pay a penalty or fee if I didn't have health insurance?
Yes (maybe). If you did not have health insurance in 2016 and do not qualify for an exemption, you will pay the higher of these two amounts:
- 2.5% of your yearly household income
- $695 person ($347.50 per child under 18)
In future years, the fee is adjusted for inflation.
You will be asked if you had health care coverage each year when filing your taxes. If you did not have coverage, look at the information above to see how much you owe.
If you received an APTC (Advance Premium Tax Credit) through the Marketplace to help pay for your health insurance, you will receive Form 1095-A to reconcile your payments with your tax credits and pay any difference.
Check out the Health Care Law and You chart from the IRS for more information.
This list of exemptions and an exemption calculator are available on healthcare.gov.
- The lowest-priced coverage available to you, through either a Marketplace or job-based plan, would cost more than 8% of your household income
- You don’t have to file a tax return because your income is below the level that requires you to file
Health coverage-related exemptions
- You were uninsured for no more than 2 consecutive months of the year
- You lived in a state that didn’t expand its Medicaid program but you would have qualified if it had
- You were enrolled in a type of health coverage through Medicare or TRICARE that covers only certain limited services (e.g. emergency-only Medicaid)
Group membership exemptions
- You’re a member of a federally recognized tribe or eligible for services through an Indian Health Services provider
- You’re a member of a recognized health care sharing ministry
- You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare
- You’re incarcerated (serving a term in prison or jail)
- You’re a U.S. citizen living abroad, a certain type of non-citizen, or not lawfully present. Learn more about the definition of “lawfully present.”
- You experienced one of the hardships below
Hardship exemptions and forms
In addition to the exemptions above, you may qualify for a “hardship” exemption. Hardships are life situations that keep you from getting health insurance.
To claim a hardship exemption, you must fill out a paper application and mail it in to the Marketplace. For details and forms, follow the links below.
Hardships that qualify you for exemptions include:
- You were homeless
- You were evicted in the past 6 months or were facing eviction or foreclosure
- You received a shut-off notice from a utility company
- You recently experienced domestic violence
- You recently experienced the death of a close family member
- You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property
- You filed for bankruptcy in the last 6 months
- You had medical expenses you couldn’t pay in the last 24 months that resulted in substantial debt
- You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member
- You expect to claim a child as a tax dependent who’s been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child. In this case, you don't have the pay the penalty for the child.
- As a result of an eligibility appeals decision, you’re eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren’t enrolled in a QHP through the Marketplace
- You were determined ineligible for Medicaid because your state didn’t expand eligibility for Medicaid under the Affordable Care Act. Michigan did expand Medicaid.
- Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable
- If you experienced another hardship in obtaining health insurance, use this PDF form to apply for an exemption with the Marketplace.