The penalty for not having health insurance is a concern for many Americans navigating healthcare options.
While the federal penalty was eliminated in 2019, some states still impose fines for being uninsured.
This article explains these penalties, exemptions, and coverage options in simple language. It aims to help you understand costs and avoid unexpected fees.
Understanding the Penalty for Not Having Health Insurance
The penalty for not having health insurance began with the Affordable Care Act (ACA) in 2014. It required most Americans to have minimum essential coverage or face a tax penalty.
The federal penalty was repealed in 2019 under the Tax Cuts and Jobs Act. However, some states have their own mandates with penalties.
These state penalties are assessed through state tax returns. They aim to encourage residents to maintain health coverage. Without insurance, you risk high medical bills and state fines. Understanding these rules helps you make informed choices.
Federal Penalty: What Changed?
From 2014 to 2018, the federal penalty for not having health insurance was enforced. It was either $695 per adult ($347.50 per child) or 2.5% of household income, whichever was higher.
This penalty was collected via federal tax returns. It was eliminated starting in 2019, so no federal fines apply in 2025.
The ACA still technically requires coverage, but there’s no federal financial penalty. States can impose their own mandates, creating a patchwork of rules. Most states follow the federal approach with no penalty. Always check your state’s laws to confirm.
States with Penalties in 2025
Five states and the District of Columbia have their own penalties for not having health insurance in 2025. These are California, Massachusetts, New Jersey, Rhode Island, and Washington, D.C. Vermont has a mandate but no financial penalty. Each state calculates penalties differently, often based on income or a flat fee.
Penalties are assessed when you file state taxes. Revenue from these fines often funds state health programs or subsidies. Below, we explore how these states handle penalties. Knowing your state’s rules is key to avoiding fees.
State-Specific Penalty Details
Massachusetts
Massachusetts has had a health insurance mandate since 2006. The penalty for not having health insurance in 2025 can reach $183 per month per adult, based on income. There’s a grace period for coverage lapses of three months or less. Penalties are capped at 50% of the lowest-cost plan on the Health Connector.
California
California’s mandate began in 2020. The penalty is at least $900 per adult and $450 per child for a full year without coverage. It can also be 2.5% of income above the state tax filing threshold. A family of four could face a penalty of at least $2,700.
New Jersey
New Jersey’s mandate started in 2019. The penalty for not having health insurance is up to $695 per adult and $347.50 per child, or 2.5% of income, whichever is higher. The maximum penalty is capped at the cost of a bronze plan. Exemptions are available for low income or hardships.
Rhode Island
Rhode Island’s mandate, effective since 2020, mirrors the old federal penalty. It’s $695 per adult, $347.50 per child, or 2.5% of income above the filing threshold. Revenue helps fund the state’s reinsurance program. Short coverage gaps may not incur penalties.
Washington, D.C.
Washington, D.C.’s mandate began in 2019. The penalty is $795 per adult, $397.50 per child, or 2.5% of income above the federal tax filing threshold. The cap is $4,388 per person, up to $21,940 for a household of five or more. Exemptions can be claimed on tax returns.
Vermont
Vermont requires residents to report coverage status on taxes since 2020. There’s no financial penalty for not having health insurance. The state uses tax data to connect uninsured residents with coverage options. This “easy enrollment” approach encourages sign-ups without fines.
Exemptions from State Penalties
Exemptions can help you avoid the penalty for not having health insurance. Common exemptions include low income (below 150% of the federal poverty level), short coverage gaps (less than three months), or hardships like homelessness. Each state has specific exemption criteria.
In Massachusetts, you can appeal penalties through the Health Connector. California’s exemptions are claimed via tax returns or Covered California. New Jersey, Rhode Island, and D.C. offer similar processes. Check your state’s tax or health exchange website for forms and details.
Why Penalties Exist
Penalties encourage people to maintain health insurance. Without mandates, healthy individuals might skip coverage, leaving insurance pools with sicker members. This drives up premiums for everyone. State penalties aim to balance risk pools and fund affordable coverage.
Revenue from penalties often supports state subsidies or reinsurance programs. For example, California uses penalty funds to offer additional health insurance subsidies. These programs lower costs for residents. Penalties also promote access to preventive care, reducing healthcare system strain.
Table: 2025 Penalties for Not Having Health Insurance by State
| State | Penalty Amount (Per Adult) | Penalty Amount (Per Child) | Maximum Penalty (Family) | Exemption Options |
|---|---|---|---|---|
| Massachusetts | Up to $183/month | N/A | 50% of lowest plan cost | Income, hardship |
| California | $900 or 2.5% of income | $450 | $2,700+ (family of 4) | Short gap, low income |
| New Jersey | $695 or 2.5% of income | $347.50 | Cost of bronze plan | Hardship, affordability |
| Rhode Island | $695 or 2.5% of income | $347.50 | Cost of bronze plan | Short gap, low income |
| Washington, D.C. | $795 or 2.5% of income | $397.50 | $21,940 (5+ members) | Income, religious |
| Vermont | No financial penalty | No financial penalty | N/A | N/A |
This table shows penalties for a full year without coverage in 2025. Amounts vary by income and family size. Verify details with state tax or health exchange websites.
How to Avoid the Penalty
To avoid the penalty for not having health insurance, enroll in a qualifying plan. Options include employer-sponsored plans, Medicaid, Medicare, or marketplace plans. Most plans meet minimum essential coverage standards. Check with your provider to confirm.
Enroll during open enrollment (November 1 to January 15 for marketplace plans). Special enrollment periods apply for life events like marriage or job loss. Subsidies through marketplaces like Covered California can lower costs. Compare plans to find affordable coverage.
Health Insurance Options
Several options help you avoid the penalty for not having health insurance. Employer-sponsored plans are common and often meet state requirements. Medicaid covers low-income individuals and families. Medicare serves seniors and those with disabilities.
Marketplace plans, available through HealthCare.gov or state exchanges, offer subsidies. Short-term plans may not meet minimum essential coverage, so check carefully. Health Care Sharing Ministries can qualify for exemptions in some states. Explore all options to find the best fit.
Costs of Being Uninsured
Beyond the penalty for not having health insurance, medical bills can be costly. A broken leg could cost $7,500, while a three-day hospital stay might reach $30,000. Serious illnesses like cancer can cost hundreds of thousands. Insurance protects against these expenses.
Preventive care, covered by most plans, reduces long-term costs. Without insurance, you pay full price for doctor visits and prescriptions. Subsidized plans through state marketplaces make coverage affordable. Weigh the penalty against potential medical costs when deciding.
Enrollment and Resources
Enroll in coverage through your state’s health exchange or HealthCare.gov. Maryland’s “easy enrollment” program uses tax returns to connect uninsured residents with plans. Community health centers and navigators offer free enrollment help. Call 800-318-2596 for marketplace assistance.
Open enrollment runs from November 1 to January 15 in most states. Special enrollment periods cover life changes like moving or having a baby. Check your state’s website for deadlines and resources. Local clinics and nonprofits also provide guidance.
Why Health Insurance Matters
Health insurance protects your finances and health. It covers preventive care, reducing the risk of serious conditions. Without coverage, you face penalties in some states and high medical costs. Insurance ensures access to doctors and hospitals when needed.
State mandates encourage coverage to keep healthcare systems stable. Subsidies make plans affordable for many. Explore options through your state’s exchange or employer. Having coverage provides peace of mind and financial security.
Summary
The penalty for not having health insurance no longer applies at the federal level since 2019. Five states—Massachusetts, California, New Jersey, Rhode Island, and Washington, D.C.—impose penalties, ranging from $695 to $900 per adult or 2.5% of income. Vermont has a mandate but no penalty. Exemptions are available for low income, hardships, or short gaps.
Enrolling in employer, Medicaid, Medicare, or marketplace plans avoids penalties. Open enrollment runs November to January, with special periods for life events. Uninsured individuals risk high medical bills. Check your state’s health exchange for affordable plans and subsidies to stay covered.
FAQ
What is the penalty for not having health insurance?
There’s no federal penalty since 2019, but states like California and Massachusetts impose fines. Penalties range from $695-$900 per adult or 2.5% of income. Check your state’s tax rules.
Which states have penalties in 2025?
California, Massachusetts, New Jersey, Rhode Island, and Washington, D.C. have penalties. Vermont requires reporting coverage but has no fine. Penalties vary by income and family size.
How can I avoid the penalty?
Enroll in a qualifying plan like employer, Medicaid, or marketplace coverage. Open enrollment is November 1 to January 15. Special enrollment applies for life events.
Are there exemptions from penalties?
Yes, exemptions include low income, short coverage gaps, or hardships. Claim them on state tax returns or through health exchanges. Each state has specific criteria.
What are the risks of being uninsured?
You may face state penalties and high medical bills, like $7,500 for a broken leg. Insurance covers preventive care and emergencies. Subsidized plans reduce costs.
Where can I get help enrolling?
Use HealthCare.gov, state exchanges like Covered California, or call 800-318-2596. Navigators and community centers offer free help. Check enrollment deadlines for your state.