The Penalty

health-insurance penalty

The Penalty in 2017 and beyond

The penalty in 2017 is calculated one of 2 ways. If you or your dependents don’t have insurance that qualifies as minimum essential coverage you’ll pay whichever of these amounts is higher:

  • 2.5% of your yearly household income. (Only the amount of income above the tax filing threshold, $11,880 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.
  • $695 per person for the year ($347.50 per child under 18). The maximum penalty per family using this method is $2,085.

If you’re uninsured for just part of the year, 1/12 of the yearly penalty applies to each month you’re uninsured. If you’re uninsured for less than 3 months, you don’t have to make a payment.

You’ll pay the fee on your 2017 federal income tax return. Most people will file this return in 2018.

Minimum Essential Coverage

The type of coverage an individual needs to have to meet the individual responsibility requirement under the Affordable Care Act. This includes individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and certain other coverage.