If you don’t have qualifying health coverage, you must claim a health coverage exemption or pay a fee with your federal tax return.
The fee for not having coverage:
If you can afford health insurance but choose not to buy it, you must have a health coverage exemption or pay a fee. (The fee is sometimes called the “penalty,” “fine,” “individual responsibility payment,” or “individual mandate.”)
The fee for not having health coverage in 2017:
If you don’t have health insurance in 2017, you’ll pay the higher of these two amounts:
- 2.5% of your yearly household income (Only the amount of income above the tax filing threshold, about $10,150 for an individual in 2014, is used to calculate the penalty.) The maximum penalty is the national average premium for a Bronze plan.
- $695 per person ($347.50 per child under 18) The maximum penalty per family using this method is $2,085.
Health plans that qualify as coverage:
Any plan that qualifies as “minimum essential coverage” counts as coverage under the health care law. These include:
- Any Marketplace plan, or any individual insurance plan you already have
- Any job-based plan, including retiree plans and COBRA coverage
- Medicare Part A or Part C
- Most Medicaid coverage
- The Children’s Health Insurance Program (CHIP)
- Most individual health plans you bought outside the Marketplace, including “grandfathered” plans (not all plans sold outside the Marketplace qualify as minimum essential coverage)
- If you’re under 26, coverage under a parent’s plan
- Self-funded health coverage offered to students by universities for plan or policy years that started on or before Dec. 31, 2014 (check with your university to see if the plan counts as minimum essential coverage)
- Health coverage for Peace Corps volunteers
- Certain types of veterans health coverage through the Department of Veterans Affairs
- Most TRICARE plans
- Department of Defense Nonappropriated Fund Health Benefits Program
- Refugee Medical Assistance
When you file taxes, be ready with your marketplace information.
If anyone in your household enrolled in a health plan through the Health Insurance Marketplace in 2016, you’ll need some new information when you file your federal income taxes. If you didn’t have health coverage for three or more months, you can apply for an exemption or you might pay a fee.
3 tips about Marketplace coverage and your taxes:
Use these Marketplace tips so you’ll be ready when it’s time to file:
- Watch your mail for Form 1095-A If you enrolled in a health plan through the Marketplace in 2015, you’ll get Form 1095-A in the mail from the Marketplace by early February. It includes basic information that you’ll need to know about your household’s enrollment, premium payments, and premium tax credit amounts. Keep it with your other important tax information.
- Your final premium tax credit for 2015 is computed with your federal income tax return. The Marketplace used your application information to determine your amount of premium tax credit. If you were like most people who qualified, you probably used “advance payments” of this premium tax credit to lower what you paid for monthly premiums. Your completed federal income tax return will show the final or actual amount of your premium tax credit. Your tax software or preparer will figure out this amount, or you’ll complete and attach the Premium Tax Credit Form (Form 8962) to your tax return when you file.
- If you didn’t have health coverage for part of 2015, use Form 8965. If your Marketplace coverage started partway through 2014 and you were uninsured earlier in the year, you’ll need to fill out Form 8965. This will show you if you qualify for an exemption from paying a fee for the months you didn’t have coverage.
Help is available:
Many people who signed up for Marketplace coverage can get free assistance with filling out their taxes. This may include free access to tax software programs, or free in-person assistance.
For more information, visit IRS.gov/freefile or IRS.gov/VITA. If you have questions about your taxes, need Form 8962, or want to learn more about the fee for not having health coverage, visit IRS.gov.
For more information about how your Marketplace coverage will affect your taxes, visit HealthCare.gov/taxes/ or call the Marketplace Call Center at 1-800-318-2596 (TTY: 1-855-889-4325).