If you can afford health insurance but choose not to buy it, you must have a health coverage exemption or pay a fee. (The fee is sometimes called the “penalty,” “fine,” “individual responsibility payment,” or “individual mandate.”)

The fee for not having coverage in 2015

If you don’t have coverage in 2015, you’ll pay the higher of these two amounts:

  • 2% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.
  • $325 per person for the year ($162.50 per child under 18). The maximum penalty per family using this method is $975.

The fee for not having coverage in 2014

If you didn’t have coverage in 2014, you’ll pay the higher of these two amounts:

  • 1% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.
  • $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.

The fee in future years

If you don’t have coverage in 2016, you’ll pay the higher of these two amounts:

  • 2.5% of your yearly household income
  • $695 per person ($347.50 per child under 18)

In future years, the fee is adjusted for inflation.

How you pay the fee

You’ll pay the fee on the federal income tax return you file for the year you don’t have coverage. Most people will file their 2014 returns in early 2015 and their 2015 returns in early 2016.

Learn more about the individual shared responsibility payment from the Internal Revenue Service.

More answers

  • What if I’m uncovered for just part of the year?

    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 no more than 2 months of the year, you don’t have to make a payment.

  • If I’m unemployed, do I have to pay the fee?

    It depends on your household income. If insurance is unaffordable to you based on your income, you may qualify for an exemption from the fee. Other exemptions are based on low income too. Learn more about exemptions and how to claim them.

  • How is the penalty collected?

    You’ll pay the penalty when you file the federal income tax return for the year for which you’re seeking coverage. Most people fill out their 2014 tax returns early in 2015 and their 2015 tax returns early in 2016.

  • What happens if I don’t pay the fee?

    The IRS will hold back the amount of the fee from any future tax refunds. There are no liens, levies, or criminal penalties for failing to pay the fee.

  • Are the rules the same in each state?

    Yes. The rules about paying penalties are the same whether the Marketplace is run by your state or the federal government.

Tue, May 27, 2014 1:00 PM – 2:00 PM CDT

Join us on May 27th for our webinar on “Tips for Surviving a DOL Audit”, presented by Proskauer Rose LLP.  During this one hour webinar, we will review the fiduciary issues related to group health plans.  We’ll also discuss the audit process and some of the issues that might trigger an agency audit, tips for dealing with agencies’ document requests in a responsive manner, what issues that might arise during an audit, and what the agencies typically expect from employers during the audit process.

Register Now!

Information Security, HR’s Role in Protecting Vital Company and Customer Information

May 6, 2014

Thu, May 15, 2014 1:00 PM – 2:00 PM CDT Firms of all sizes have a need to control sensitive information. Some companies may have confidential customer information that if lost could lead to legal liabilities and loss of customer confidence. Other firms are concerned about protecting valuable intellectual property. In either case, HR can […]

Read the full article →

Keeping the Channels Open, Effective Employee Relations

March 24, 2014

Thu, Apr 10, 2014 1:00 PM – 2:00 PM CDT Many employment lawsuits could have been avoided with better employer-employee communications. Employers have many methods for communicating with employees and it’s important that communication forts be coordinated, consistent and comprehensible. Learn methods for improving employee communication in our one hour webinar. This educational webinar has […]

Read the full article →

The Affordable Care Act: The Latest Updates and the Impact on Employers

March 24, 2014

Tue, Mar 25, 2014 1:00 PM – 2:00 PM CDT Join us as Stacy Barrow of Proskauer Rose reviews the latest legal and regulatory guidance on the Affordable Care Act, and how those changes impact employers and plan sponsors.  Stacy will discuss transition relief under the employer mandate and other changes in the final pay-or-play regulations, […]

Read the full article →

HR ROI, Quantifying the Return on Employee Investment

March 11, 2014

Thursday, March 13, 2014 One of the biggest problems for HR professionals is finding a way to demonstrate the value in improved recruitment, training and coaching programs. Upper management tends to focus on “return on investment” (ROI), but how can an HR department calculate ROI? Our one hour webinar will focus on methods for calculating […]

Read the full article →

Self-Funded Group Health Plans Under the ACA

September 26, 2013

Tue, Oct 29, 2013 1:00 PM – 2:00 PM CDT Join us for a webinar, presented by Stacy Barrow of Proskauer Rose, on October 29th as he covers the treatment of self-funded plans, including account-based plans such as Health Reimbursement Arrangements, under the Affordable Care Act.  We’ll also discuss innovative approaches to self-funding, including the implications […]

Read the full article →

Conducting Effective Employee Reviews/Appraisals

September 26, 2013

Thu, Oct 24, 2013 1:00 PM – 2:00 PM CDT Employers who conduct effective employee performance reviews benefit in many ways.  Employees know what their employer expects of them and can receive feedback on their work.  They have a better understanding of areas where they can improve their performance or conduct.  Also employees who are recognized for their […]

Read the full article →

FMLA and Employee Benefit Plans

September 3, 2013

Tue, Sep 17, 2013 1:00 PM – 2:00 PM CDT Join us for a webinar, presented by Stacy Barrow of Proskauer Rose, on September 17th as he provides an overview of the Family Medical Leave Act and covers the treatment of employee benefit plans when an employee’s leave is protected under the FMLA.  Stacy will also […]

Read the full article →

Exchange Notices – What EVERY employer needs to do by October 1st!

September 3, 2013

Tuesday, September 10, 2013 10:00 AM – 10:30 AM CDT By October 1, 2013, EVERY employer (1 employee and up) must provide employees written notice about the new health care Exchanges. The ability for the employee to afford coverage in the Exchange will vary based on a number of factors and generate many new questions […]

Read the full article →