skip to content

Health Coverage Mandate

The Importance of Health Insurance

Minnesotans have long understood that access to health care in every community means a higher quality of living for all. Health insurance provides regular, preventive care for you and your family to stay healthy and prevent illness. Moreover, health coverage gives you protection and peace of mind if you or a loved one gets sick or hurt.

The last thing any one of us wants to worry about is running up medical bills for necessary care. Medical debt is one of the main reasons people file for bankruptcy. Health insurance helps pay costs when you need care and protects you from very high expenses.

Health Coverage is Required

Most individuals, including your children and anyone else you claim as a dependent on your federal taxes, must have health insurance or pay a penalty. (See exemptions.)

If you are covered by a government-sponsored program such as Medical Assistance (Medicaid), MinnesotaCare or Medicare Part A, you meet the requirement to maintain coverage. If you don't have health insurance coverage or access to coverage either through your employer or a government-sponsored program, you may qualify to purchase a low-cost plan through MNsure. Coverage under a private health plan purchased through MNsure also meets the federal requirement to maintain coverage.

The individual health coverage mandate is required by law through the Affordable Care Act. The requirement to buy health coverage makes sure people don't wait until they have a health problem to purchase insurance. This brings healthy people into the group, creates a larger group of both sick and healthy individuals, and keeps average costs down.

Penalties for No Coverage

If you do not have health insurance and don't qualify for an exemption, you will pay a federal tax penalty. This penalty is due when you file your federal tax return by the filing deadline. The penalty amount will increase each year.

For 2015, it is the greater of:

  • 2 % of the amount of any taxable income that exceeds your tax filing threshold amount, or
  • $325 per adult and $162.50 per child (up to a maximum of $975 per family).

In 2016 and 2017, it is the greater of:

  • 2.5 % of the amount of any taxable income that exceeds your tax filing threshold amount, or
  • $695 per adult and $347.50 per child (up to a maximum of $2085).

Use this IRS tool to estimate your penalty.

After 2017, the tax penalty increases annually based on a cost-of-living adjustment to the flat dollar amount.

A person will pay one-twelfth of the total annual penalty for each month without coverage.

Exemptions

There are some exceptions to the requirement for having health coverage. Find information about exemptions here.

back to top