Is There A Penalty For Not Having Health Insurance?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Is There A Penalty For Not Having Health Insurance?

Whether there is a penalty for not having health insurance largely depends on your location. In the United States, the federal penalty was eliminated in 2019. However, some states have implemented their own health insurance mandates. If you live in one of these states and lack coverage, you might face a state-level penalty.

Do You Get Penalized For Not Having Health Insurance

States with Health Insurance Penalties

States such as California, Massachusetts, New Jersey, Rhode Island, Vermont, and Washington, D.C., have their own health insurance requirements. Residents in these areas may be subject to a tax penalty for not maintaining qualifying health insurance coverage.

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State Health Insurance Penalties

StatePenalty StructurePenalty Details
CaliforniaFlat amount or percentage of income$695 per adult or 2.5% of income
MassachusettsVaries by income, age, family sizeUp to $135 per month for an individual
New JerseyPercentage of income or a flat rate$695 per adult or 2.5% of household income
Rhode IslandFixed amount based on income$695 per adult or 2.5% of household income
VermontCurrently no financial penalty
Washington, D.C.Based on income$695 per adult or 2.5% of household income
Penalty For Not Having Health Insurance

Conclusion

No federal penalty exists for not having health insurance in the United States, but certain states enforce their own penalties. Being aware of your state’s health insurance laws is crucial to avoid potential fines. Beyond avoiding penalties, health insurance is essential for financial protection against health issues. For guidance on choosing the right health insurance plan, contact us today for a free quote.

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Frequently Asked Questions

What is the IRS penalty for not having health insurance in 2023?

Starting in 2019, individuals not enrolled in health insurance are not subject to a federal fine, and this means that as of 2023, there is no federal penalty for not having health insurance.

Does the IRS know if you have health insurance?

Employers inform the IRS about their employees’ participation in health plans and provide them with Form 1095-C for taxation purposes. Like Form 1095-A, people who receive Form 1095-C are not required to attach it to their tax return.

Why is it essential to have insurance?

Health insurance is vital because it helps cover high medical costs that can arise unexpectedly. Even if you don’t plan on getting sick or injured, most people require medical care at some point. In addition to covering medical expenses, health insurance provides many other essential benefits that protect you from health and financial risks.

Is health insurance tax deductible?

You cannot deduct those premiums if you pay for health insurance with pre-tax income. However, if you itemize your tax return and pay for health insurance with after-tax income, you may be able to deduct those premiums.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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