What the ACA Individual Mandate Repeal Means for You

April 19, 2021
•
2-minute read

The Affordable Care Act’s individual mandate, a provision that required all Americans to have health insurance or pay a tax penalty, was repealed in December 2017. While the individual mandate is no longer in effect, you may still owe a fee, depending on your state of residence.1

When Did the Individual Mandate Repeal Take Effect?1

The Affordable Care Act (ACA) individual mandate repeal took effect in 2019. The penalty for not having health insurance was enforced through 2018. Consumers who dropped coverage before January 2019 still had to pay the fine on their 2018 income tax returns. The penalty for not having insurance in 2018 was 2.5% of a person’s yearly household income or $695, whichever was greater.

What Does the Individual Mandate Repeal Mean?

The individual mandate repeal means that the tax penalty for not having health insurance is now dependent entirely on your state of residence. For example, if you live in California, you may still have to pay a penalty.

Did This Repeal the Affordable Care Act?

No, the Affordable Care Act (ACA) has not been repealed. The following components of the law are still in place:

  • Consumers can still purchase insurance coverage on state and federal marketplaces.
  • Medicaid expansion is maintained.
  • Government subsidies and consumer protections are still issued.

All 10 essential health benefits—such as maternity care, prescription drugs, preventive care, and emergency services—will continue to be covered in all ACA plans.

Will I Be Penalized for No Health Insurance in 2021?

You will only be penalized for not having health insurance in 2021 if you reside in a state that has enacted its own tax penalty laws. Check the list below to see if your state has an individual mandate.

Which States Have Individual Mandates?

Currently, the District of Columbia and five states (California, Massachusetts, New Jersey, Rhode Island, and Vermont) have individual mandates for the 2020 tax year. Some states and regions have created strategies to preserve the individual mandate that residents have health coverage or face a tax penalty. Here’s where those states currently stand:

State

Current Actions

California

As of 2020, California residents must have health insurance or pay a penalty when filing state taxes. It’s possible to get an exemption from the coverage requirements.2

Washington, D.C.

As of 2019, D.C. residents are required to have health insurance, get a coverage exemption, or pay a penalty on their D.C. taxes. The fee is $695 for each adult or 2.5% of family income over the federal filing threshold, whichever is greater.3

Massachusetts

Massachusetts has an individual mandate in place. If you don’t have health insurance, you may have to pay a tax penalty.

New Jersey

New Jersey residents are required to have health coverage, qualify for an exemption, or pay a “shared responsibility payment” on their state taxes.

Rhode Island

As of January 2020, Rhode Islanders must have health insurance under the state’s individual mandate. Failure to have qualifying coverage could result in a tax penalty.4

Vermont

Vermont does not have a cash penalty for residents without health insurance coverage. However, Vermont residents are required to report whether they had health coverage for each month of the year when filing their state taxes.

To keep up with the latest information on healthcare news, check out HealthMarkets’ healthcare reform update page.

Now that you know all about the Affordable Care Act (ACA) individual mandate repeal, the innovative HealthMarkets FitScore® can help you review your health coverage options.

Answer some quick questions about your insurance needs, and we’ll rank plans side-by-side just for you.

Start comparing plans today.

1. “The fee for not having health insurance.” HealthCare.gov. Retrieved from https://www.healthcare.gov/fees/fee-for-not-being-covered/. Accessed on April 15, 2021.
2. CA.gov. Retrieved from https://www.ftb.ca.gov/about-ftb/newsroom/health-care-mandate/personal.html. Accessed on April 15, 2021.
3. DCHealthLink. Retrieved from https://dchealthlink.com/individual-responsibility-requirement#penalty. Accessed on April 15, 2021.
4. RI.gov. Retrieved from http://www.tax.ri.gov/healthcoveragemandate/. Accessed on April 15, 2021.

Affordable Care Act
Health Insurance
Query card

Uninsured? We can help.

Related content

  1. How to review your health insurance policy: 5 useful tips
    3-minute read

    When it’s time to renew your health insurance policy, what should you look for? In most cases, you’ll review your health insurance policy, evaluate your options, and choose a plan during the Open Enrollment period, which runs from November 1, 2025, through January 15, 2026.1 Maybe you’ll renew your existing health insurance policy. Or maybe some things have changed in your life (like getting marri

  2. Short-term plans: Get this for health insurance between jobs
    3-minute read

    Looking for health insurance between jobs? If you’re among the estimated 6.8 million people in the U.S. who are unemployed, or you know your work status is about to change, what’s your plan for health insurance?1 You could sign up for: COBRA, which would mean paying out of your own pocket to continue with your former company’s group insurance plan.2 A health plan through the Healthcare Insurance M

  3. The basics of health insurance: numbers you need to know
    2-minute read

    Shopping for health insurance can be overwhelming. Whether it’s your first time or your annual review, knowing the basics can help you effectively compare plans and find coverage that suits your needs and budget. An easy way to start is by understanding the basics of health insurance costs. Premiums The premium is the amount you pay, typically each month, for health insurance. This is a fixed pric

View more articles