Starting in January 2014, most individuals will be required to have health insurance coverage or pay a Shared Responsibility Payment (penalty) when filing their annual taxes, if they don’t. Coverage can include individual health insurance, employer-provided health insurance, Medicaid or Medicare. The Shared Responsibility Payment tax (penalty) phases in over three years and becomes increasingly severe. In 2017, the Shared Responsibility Payment (penalty) will be 2.5 percent of annual household income or $695 per adult and $347.50 per child up to age 18 (up to a family household maximum of $2,085) whichever is greater for the total household. This means that if you do not have health insurance coverage in 2017, you will be required to pay a Shared Responsibility Payment tax (penalty) when you file your taxes at the end of the year. Several groups are exempt from the requirement to obtain health insurance coverage or pay the Shared Responsibility Payment tax (penalty).
- People who would have to pay more than 8 percent of their income for health insurance
- People who qualify for religious exemptions
- Undocumented immigrants
- People who are incarcerated
- Members of Native American tribes
- People with incomes below the threshold required for filing taxes (in 2016, $11,770 for a single person and $24,250 for a married couple with two children).