Individual Mandate Penalty Calculator

WHERE CAN I GO FOR HELP UNDERSTANDING HOW THE HEALTH REFORM LAW WILL AFFECT ME?

If you have questions about how the health reform law will affect you and your insurance options, please go to Healthcare.gov, or contact their Help Center at 1-800-318-2596 if you have questions that cannot be answered on their website. You can also contact a Navigator or other Marketplace-certified assister program (in federal marketplace states, consult Find Local Help) or your state’s Exchange, or Medicaid office with questions about eligibility and enrollment.

The Kaiser Family Foundation is not able to provide individual advice on your insurance options. However, we do provide some answers to frequently asked questions below, along with more detailed questions and answers in our Health Reform FAQ page.

I AM HAVING DIFFICULTY VIEWING OR UNDERSTANDING MY RESULTS. WHAT SHOULD I DO?

It could be that you are using an older version of Internet Explorer or Firefox. Try updating to a newer version of your web browser. Not sure which browser version you are running? Check here for IE or here for Firefox. If you continue to have technical problems with the Calculator after updating your browser, please contact the Kaiser Family Foundation.

Please note that we are not able to provide individual advice or assistance understanding your results. If you have additional questions, we suggest that you contact Healthcare.gov or your state’s Health Insurance Marketplace for more information.

DOES THE CALCULATOR PROVIDE DEFINITIVE RESULTS FOR THE TAX PENALTY I WILL OWE IF I GO WITHOUT HEALTH INSURANCE IN 2018?

No. The calculator is intended to show you an estimate of your penalty for going uninsured in 2018. This calculator also estimates whether you qualify for any of the following three exemptions from the individual mandate penalty: your income is below the income tax filing threshold, Marketplace coverage for your household is unaffordable, or you are determined ineligible for Medicaid solely because the state in which you live did not expand Medicaid. This calculator does not test for all exemptions from the individual mandate penalty for which you may qualify. There are several reasons why your calculator results may not match your actual penalty amount. For example, the calculator relies completely on information as you enter it, whereas when you complete your 2018 tax return, the IRS may calculate your Modified Adjusted Gross Income (MAGI) to be a different amount.  If you end up going without insurance coverage, you will find out your actual tax penalty when you complete your 2018 federal tax return.

DOES THE CALCULATOR PROVIDE DEFINITIVE RESULTS FOR WHAT I WILL PAY FOR THE LOWEST COST PLAN IN MY AREA?

No. The calculator is intended to show you an estimate of how much you may pay and the amount of financial help you may be eligible for if you buy coverage through the Health Insurance Marketplace. To find out if you are eligible for financial assistance and to sign up, you must contact Healthcare.gov, your state’s Health Insurance Marketplace, or Medicaid program office.

Although the Individual Mandate Penalty Calculator is based on actual premiums for plans sold in your area, there are several reasons why your calculator results may not match your actual tax credit amount. For example, the calculator relies completely on information as you enter it, whereas the Marketplace may calculate your Modified Adjusted Gross Income (MAGI) to be a different amount or may verify your income against previous year’s data.

I'M UNINSURED. AM I REQUIRED TO GET HEALTH INSURANCE?

Everyone is required to have health insurance coverage – or more precisely, “minimum essential coverage” – or else pay a tax penalty, unless they qualify for an exemption. This requirement is called the individual responsibility requirement, or sometimes called the individual mandate.

WHAT'S THE PENALTY IF I DON'T HAVE COVERAGE?

The penalty for not having minimum essential coverage is either a flat amount, or a percentage of household income, whichever is greater. The penalty has been phased in and will be adjusted in the future for inflation.

For 2017 and 2018, the penalty is the greater of

• $695 for each adult and $347.50 for each child, up to $2,085 per family, or
• 2.5% of family income above the federal tax filing threshold, which the calculator estimates is $10,650 for a single filer or $21,300 for people who file jointly in 2018

In later years, the flat penalty amounts will be indexed based on the cost of living.

In all years, the penalty is also capped at an amount equal to the national average bronze health plan premium available through the Marketplace.  For 2017, that amount was $3,264 for a single individual ($16,320 for a family of five or more).  For 2018, the calculator estimates that amount is $3,816 for a single individual ($19,080 for a family of five or more). This amount is updated annually in the instructions for IRS Form 8965.

The penalty is assessed based on “coverage months.” This means that each month you are uninsured, you may owe 1/12^th of the annual penalty. However, short spells of uninsurance may not be subject to a penalty.

For more information about the penalty, also called the individual responsibility payment, see instructions for Form 8965 on the IRS website.

ARE THERE EXEMPTIONS TO THE PENALTY? WHAT ARE THEY?

Yes. You may be eligible for an exemption if you:

• Cannot afford coverage (defined as those who would pay more than 8.05 percent of their household income for the lowest cost bronze plan available to them through the Marketplace in 2018)
• Are not a U.S. citizen, a U.S. national, or a resident alien lawfully present in the U.S.
• Had a gap in coverage for less than 3 consecutive months during the year
• Won’t file a tax return because your income is below the tax filing threshold (For the 2017 tax year, the filing threshold is $10,400 for individuals and $20,800 for married persons filing a joint return. For the 2018 tax year, the calculator estimates the filing threshold is $10,650 for individuals and $$21,300 for married persons filing a joint return)
• Are unable to qualify for Medicaid because your state has chosen not to expand the program
• Participate in a health care sharing ministry or are a member of a recognized religious sect with objections to health insurance
• Are a member of a federally recognized Indian tribe
• Are incarcerated

Others who do not qualify through these categories but have experienced a hardship that makes it difficult to purchase insurance may apply through the health insurance Marketplace for an exemption to the individual responsibility requirement.

For more information on how to claim an exemption to the individual mandate penalty on your tax return see the IRS website.

ON WHAT GROUNDS CAN I APPLY FOR A HARDSHIP EXEMPTION TO THE INDIVIDUAL MANDATE?

People may apply for a hardship exemption if they have experienced difficult financial or domestic circumstances that prevent them from obtaining coverage – such as homelessness, death of a close family member, bankruptcy, substantial recent medical debt, or disasters that substantially damage a person’s property. In addition, a hardship exemption may be granted to people who were determined ineligible for Medicaid only because their state hasn’t expanded Medicaid coverage to residents with income up to 138% of the federal poverty level. (Note, most hardship exemptions must be obtained by applying directly to the Marketplace.  However, the exemption for low income persons living in states that have not expanded Medicaid can also be claimed directly on the tax return.) People may also apply for a hardship exemption if obtaining coverage would be so burdensome as to cause the applicant to experience other serious deprivation of food, shelter, or other necessities. Consult your Marketplace for more information about hardship exemptions.

HOW DO HEALTH INSURANCE SUBSIDIES WORK?

Subsidies are financial assistance from the Federal government to help you pay for health coverage or care. The amount of assistance you get is determined by your income and family size. There are two types of health insurance subsidies available through the Marketplace: the premium tax credit and the cost-sharing subsidy.

The premium tax credit helps lower your monthly expenses. This subsidy is available to people with family incomes between 100% and 400% of the poverty level who buy coverage through the Health Insurance Marketplace. These individuals and families will have to pay no more than 2.01% - 9.56% of their incomes for a mid-level plan (“silver”) premium. Anything above that is paid by the government. The amount of your tax credit is based on the price of a silver plan in your area, but you can use your premium tax credit to purchase any Marketplace plan, including Bronze, Gold, and Platinum plans (these different types of plans are described below). You can choose to have your tax credit paid directly to the insurance company so that you pay less each month, or, you can decide to wait to get the tax credit in a lump sum when you do your taxes next year.

Cost-sharing subsidies (also called “cost-sharing reductions”) help you with your costs when you use health care, like going to the doctor of having a hospital stay. These subsidies are only available to people purchasing their own insurance who make between 100% and 250% of the poverty level (and some Native Americans). If you qualify for a cost-sharing subsidy, you would need to sign up for a silver plan to take advantage of it. Unlike the premium tax credit (which can be used for other “metal levels”), cost-sharing subsidies only work with silver plans. With a cost-sharing subsidy, you still pay the same low monthly rate of silver plan, but you also pay less when you go to the doctor or have a hospital stay than you otherwise would.
For more information, read the actuarial value question below. If you have more specific questions about your subsidy, you can consult our FAQ pages or contact an assister or navigator through Healthcare.gov or your state’s Marketplace.

APPARENTLY MY FAMILY ISN’T ELIGIBLE FOR SUBSIDIES IN THE MARKETPLACE BECAUSE WE FALL INTO THE MEDICAID GAP.

Because the ACA envisioned low-income people receiving coverage through Medicaid, people with incomes below poverty ($20,420 for a family of 3 in 2018) are not eligible for Marketplace subsidies. This means that in the 19 states that have not expanded Medicaid, some adults fall into a “coverage gap” of earning too much to qualify for Medicaid but not enough to qualify for premium tax credits. People that fall into the coverage gap cannot get subsidies on the marketplace and do not have to pay the penalty for going uninsured.

WHAT ARE MY OPTIONS IF I HAVE JOB-BASED HEALTH COVERAGE? How do i know if my employer coverage is affordable?

With most job-based health plans, an employer pays part of your monthly or yearly costs (premiums).  In general, people who qualify for health insurance through their job are not able to get financial assistance through the Marketplaces.

However, if your employer’s coverage is either unaffordable or doesn’t meet the health care law’s “minimum value” requirement, then you may be eligible for financial help to purchase through the Marketplace. “Minimum value” means your employer plan pays at least 60 % of the total cost of medical services. Your employer can tell you whether the insurance plan it offers meets minimum value. It also can provide you with information to determine if the plan is considered affordable to you. For example, if your share of the premium for self-only coverage in your employer plan is 9.56% or more of your 2018 household income, it is considered unaffordable, and you can apply for premium tax credits in the Marketplace.

When using the Individual Mandate Penalty Calculator, you can answer “No” to Question #3 if your employer’s coverage is unaffordable or does not meet the minimum value requirement.

MY EMPLOYER OFFERS HEALTH BENEFITS BUT DOESN'T CONTRIBUTE MUCH TOWARD THE PREMIUM. I CAN'T AFFORD MY SHARE. CAN I APPLY FOR COVERAGE AND SUBSIDIES IN THE MARKETPLACE INSTEAD?

You can always shop for health coverage in the Marketplace. However, if you’re offered employer health benefits, you can’t qualify for premium tax credits in the Marketplace unless your employer coverage is considered unaffordable. If your share of the premium for self-only coverage in your employer plan is 9.56% or more of your 2018 household income, it is considered unaffordable, and you can apply for premium tax credits in the Marketplace.

MY EMPLOYER OFFERS HEALTH BENEFITS TO ME AND MY FAMILY, BUT ONLY COVERS THE COST OF MY COVERAGE. WE CAN'T AFFORD TO ENROLL MY SPOUSE AND KIDS. CAN THEY GET COVERAGE AND SUBSIDIES IN THE MARKETPLACE INSTEAD?

You can always shop for health coverage in the Marketplace. However, your employer-provided coverage is considered “affordable.” That’s because the affordability of employer sponsored coverage is only measured with respect to self-only coverage. Because your employer pays the entire cost of the employee-only coverage, you are technically considered to have affordable coverage (even though practically speaking, it was unaffordable to you.) As a result, neither you nor your spouse and children are eligible to apply for premium tax credits in the Marketplace. Sometimes this rule is referred to as "the family glitch."

There are a few other things you should know. First, depending on your family income, your children might qualify for the Children’s Health Insurance Program in your state. Check with your state Marketplace to find out if your children may be eligible for CHIP.

Second, if the amount you would have had to pay to actually cover your spouse and kids is more than 8.05% of your family income in 2018, they won’t be penalized for not having health coverage that year.

APPARENTLY MY FAMILY ISN'T ELIGIBLE FOR SUBSIDIES IN THE MARKETPLACE BECAUSE I AM ELIGIBLE FOR SELF-ONLY COVERAGE AT WORK THAT IS CONSIDERED AFFORDABLE. MY FAMILY IS ALSO OFFERED COVERAGE BUT THE COST OF FAMILY COVERAGE IS NOT AFFORDABLE. WILL I HAVE TO PAY A PENALTY BECAUSE MY FAMILY MEMBERS ARE UNINSURED?

No. Assuming the amount you would have had to pay to actually cover your spouse and kids is more than 8.05% of your family income in 2018, they won’t be penalized for not having health coverage.

WHAT IS INCLUDED IN HOUSEHOLD INCOME? HOW DO I KNOW WHAT TO ENTER FOR MY INCOME?

The Individual Mandate Penalty Calculator allows you to enter household income in terms of 2018 dollars. Household income includes incomes of the person who pays taxes and his or her spouse.  The income of children claimed as dependents of the taxpayer may or may not also be counted, depending on the source and amount of income and whether the child is required to file his or her own tax return.  See IRS.gov for more information on tax rules for children and dependents.   For the purposes of the calculator, you should enter your best guess of what your income will be in 2018.

When you go to Healthcare.gov or your state’s Health Insurance Marketplace website, it will walk you through the steps to calculate your household income based on wages, salary, foreign income, interest, dividends, and Social Security. The calculation does not include income from gifts, inheritance and some other income sources. For more information, see this table of what income sources to include or not include.

WHAT IS THE FEDERAL POVERTY LEVEL?

The Federal poverty level varies by family size. For Marketplace coverage in 2018, the poverty level used is $12,060 for a single adult and $24,600 for a family of 4.

WHAT IS MEDICAID? HOW DOES IT RELATE TO FINANCIAL HELP THROUGH THE HEALTH INSURANCE MARKETPLACE?

Medicaid is a health insurance program (funded by states and the Federal government) that helps with medical costs for some people who have limited income and resources. Medicaid programs vary from state to state, but most health care services are covered at little or no cost. If you are eligible for Medicaid, then you would not be eligible for subsidies in the Marketplace and would instead need to sign up for Medicaid.

As a result of the health care law, states have the option to expand Medicaid eligibility to all people with incomes below 138% of the poverty level. Currently 32 states have decided to expand their Medicaid programs and the rest have not. If you live in a state that has not expanded Medicaid and you expect your income to be above the poverty level, then you may be eligible for subsidies through Healthcare.gov or your state’s Marketplace. If you expect that your income next year will be below the poverty level, then you may not be eligible for assistance through the Marketplace. However, it is possible that you may still qualify for Medicaid under your state’s eligibility criteria, particularly if your income is very limited and you have children, are pregnant, or have a disability. To find out if you qualify for Medicaid, contact Healthcare.gov, your state’s Marketplace, or your state’s Medicaid program office for information about eligibility and enrollment.

WHAT IS THE CHILDREN'S HEALTH INSURANCE PROGRAM (CHIP)?

The Children’s Health Insurance Program (CHIP) provides coverage to children in low income families. Nearly all states cover children up to 19 years old in families with incomes up to at least 200% of the federal poverty level (FPL), which is $40,840 for a family of three in 2017. To find out if your children qualify for Medicaid or CHIP, contact Healthcare.gov, your state’s Marketplace, or your state’s Medicaid program office.

MY KIDS ARE ELIGIBLE FOR THE CHILDREN'S HEALTH INSURANCE PROGRAM. CAN I ENROLL THEM IN OUR MARKETPLACE HEALTH PLAN AND GET PREMIUM TAX CREDITS FOR THEM INSTEAD?

You can add your children to your Marketplace plan, but because they are eligible for your state’s Children’s Health Insurance Program (CHIP), they are not eligible for premium tax credits. The exception to that is if you live in a state that has a waiting period for enrolling in CHIP. During the waiting period, your children are eligible for a premium tax credit; when the waiting period has ended they can enroll in CHIP and will become ineligible for the tax credit.

IF I have MEDICARE CAN I STILL SIGN UP ON THE MARKETPLACE?

No, it is against the law for someone who knows you have Medicare to sell you a Marketplace plan. Most people age 65 and older are eligible for Medicare, which is health insurance program run by the federal government, and are automatically enrolled in Part A of Medicare the month they turn 65.  Most people also sign up for Part B of Medicare at that time; if you don’t enroll in Part B during your initial eligibility period, you may have to pay a Part B late enrollment lifetime penalty when you do enroll.  If you have Medicare (including Part A only), you have satisfied the individual mandate to have coverage.

If you are over the age of 65 but not yet eligible for Medicare due to immigration status, you may be eligible for Marketplace coverage. You can use the Individual Mandate Penalty Calculator by entering your age as 64.