What is the Penalty for Not Having Health Insurance in the US?

Thinking about skipping health insurance because it feels too expensive or pointless? Before you make that call, you should know whether you’ll actually face a penalty. Most people still think there’s a huge fine if you don’t have coverage, but the truth is not so simple anymore.

Back in the day, the Affordable Care Act (ACA) hit you with a federal penalty for not having health insurance. But since 2019, that’s changed—at least at the national level. If you’re not covered, most states won’t slap you with a federal fine when tax season rolls around.

But hold up—it’s not a total free pass. A handful of states still have their own penalties if you go uninsured. And some of them don’t play around; the fines can be pretty big compared to just buying a plan. So, if you’re moving or even just road-tripping, it pays to know which states actually care about health insurance status.

• How the Health Insurance Penalty Has Changed
• States Where You Still Have to Pay
• Who’s Off the Hook (and Who Isn’t)
• Smart Ways to Avoid Penalties and Save Money

How the Health Insurance Penalty Has Changed

The rules around getting dinged for not having health insurance in the US have totally flipped in the last few years. When the Affordable Care Act (ACA) first came out in 2014, there was something called the "individual mandate." That meant if you didn’t have qualifying health coverage all year, the government would hit you with a tax penalty.

Here’s the real number: for tax year 2018, the federal penalty was either $695 per adult ($347.50 per child) or 2.5% of your household income, whichever was higher. People were forking out real money at tax time just for skipping insurance.

But from January 1, 2019, that federal penalty dropped down to zero. That’s because Congress axed the penalty as part of the 2017 tax bill. Since then, if you skip health insurance, most folks don’t deal with a penalty from the IRS anymore.

This switch confused a lot of people. Some still think they’ll owe money just for being uninsured. The truth is, unless you’re in one of a handful of states with their own rules, you won’t pay anything extra on your federal taxes for not having a health plan.

Don’t forget, though: medical bills without insurance can be way more painful than any old tax penalty ever was. It’s worth understanding these changes so you can make an informed decision, instead of letting old rules trip you up.

States Where You Still Have to Pay

If you thought the federal penalty was gone for good, you’re not totally off the hook—at least, not everywhere. Some states and even Washington D.C. still have their own rules about health insurance. If you live in these places without coverage, you could end up owing money when you file your state taxes, just like in the old days of the ACA.

Here’s the deal with states that still have their own individual mandates:

• California: Penalties can be steep here. If you go all year without insurance, you could pay at least $900 per adult, or $2,250 per family in 2025. They figure the amount based on your income and household size, so the more you make, the more you could owe.
• Massachusetts: This state has actually had its own mandate way before the ACA was a thing. Penalties depend on both age and income. If you’re over 18 and make more than 150% of the poverty level, you’ll pay a fine. For example, single adults could see yearly penalties around $420, but it climbs for higher incomes.
• New Jersey: If you don’t get coverage here, there’s a penalty like California’s, based on income and household size. The maximum penalty is about $3,061 per family or $695 per adult—again, whichever is higher, depending on your situation.
• Rhode Island: The state charges a penalty based on income, similar to the old federal ACA formula. In 2025, it’s about $780 per adult and $390 per child for a family, or 2.5% of household income, whichever is higher.
• Vermont: Here’s a quirk—Vermont says you legally need health insurance, but right now, there’s no real penalty if you skip it. It’s more of a strong nudge than an actual fine.
• District of Columbia (Washington DC): The capital charges a penalty that can reach up to $1,000 per adult or 2.5% of your income, whichever is higher. This hits hard if you skip coverage for the whole year.

Check out a quick side-by-side of how these penalties stack up:

Why bother learning all this? Because, if you move for work or school, or split time between states, you could get hit with a penalty if you don’t pay attention. That’s why keeping your health insurance is so important—especially if you’re living in a state that still cares. And here’s a tip for travelers and remote workers: residency rules matter more than where you spend weekends, so check the rules for wherever you file state taxes.

If you want to avoid any nasty surprises, check out your state’s health insurance exchange or talk with a tax pro. These rules can change fast, so don’t assume next year will be the same as this one. Staying in the know can literally save you hundreds—or even thousands—of bucks.

And remember, states are totally in charge of setting penalty amounts, so they could tweak them any year. Always skim the most recent info before making big decisions with your health insurance.

Who’s Off the Hook (and Who Isn’t)

Wondering if you’re on the hook for a health insurance penalty? It all depends on where you live, how much you make, and even your personal situation. Since the federal penalty for not having health insurance is gone, most people outside of certain states don’t owe anything. But some states still want proof that you’re covered—or a really good excuse why not.

Some people automatically get a pass. Most state penalties (like in California, New Jersey, Massachusetts, Rhode Island, and DC) waive the fine if you qualify for certain exemptions. Here’s who usually gets off the hook:

• Low-income folks: If your income is below the state tax-filing threshold, you won’t pay a penalty.
• Short gaps in coverage: You can be uninsured for a short period (usually less than 3 months) without paying a fine.
• Special hardships: Things like medical debt, homelessness, eviction, bankruptcy, or caring for a sick family member can get you out of the penalty.
• Religious exemptions: Some states waive the penalty for members of recognized religious groups who don’t believe in insurance.
• Living abroad: If you’re out of the country for most of the year, you usually don’t have to pay up.

Here’s a quick look at states with individual mandates, their penalty rules, and how exemptions work:

If you don’t fit into one of these buckets and you live in a mandate state, you’ll see a fine tacked onto your state tax bill. The penalty can get even bigger if you have a family or are higher income.

Tip: Even if you do get hit with a penalty, you can still apply for an exemption when you file your state taxes. Just make sure to keep any paperwork backing up your reason—states do check.

Smart Ways to Avoid Penalties and Save Money

If you live in a state with its own health insurance penalty, dodging those extra charges isn’t rocket science—but you do need to pay attention. The first thing to remember: check your state’s rules every year, because the details change and every state does it differently.

• Health insurance through work: If your job offers coverage, signing up is usually the easiest (and cheapest) way to stay covered.
• Marketplace plans: Use your state’s health insurance marketplace. You might get subsidies based on your income, which can shrink your monthly bill a lot. In 2024, four out of five people qualified for help with premium costs through the federal marketplace.
• Medicaid and CHIP: If money’s tight, check if you qualify for Medicaid or your state’s Children’s Health Insurance Program (CHIP). These programs cover millions of people, not just kids. Some states expanded Medicaid, so you may be eligible even if you’ve been denied before.
• Short gaps are OK: Most states let you go without insurance for up to 2-3 months each year without hitting you with a penalty. Don’t risk longer stretches—it’s not worth it.
• Hardship exemptions: Stuff happens—loss of income, family crisis, homelessness. If you have a legit reason, your state might cut you a break, but you have to apply for an exemption when you file taxes.
• Shop around: Don’t just pick the first plan you see. Use tools like Healthcare.gov or your state’s exchange to compare options. Sometimes, bronze-level plans have premiums under $50/month, especially if you’re young and healthy.

Bottom line: always double-check the rules in your state, and never assume you don’t have choices. The right move often saves you hundreds—even thousands—compared to just dealing with a penalty after the fact.