Are You Required to Have Health Insurance? State Laws on the Individual Mandate Penalty

What is an Individual Mandate?

Under the Patient Protection and Affordable Care Act (ACA), the “individual mandate,” or shared responsibility provision, requires U.S. Citizens and those lawfully present in the U.S. to maintain continuous health care coverage or face a tax penalty. Though there are a variety of exceptions to this penalty, including religious and hardship exceptions, most Americans have to maintain minimum essential coverage to avoid this penalty. Minimum essential coverage (MEC) includes plans like employer-sponsored plans, individual Marketplace plans, TRICARE or VA plans, Medicare, Medicaid, and CHIP.

In 2018, if an adult did not have adequate MEC during the year, they would pay $695 or 2.5% of their household income, whichever was more.

In December of 2017, Congress dropped the penalty to $0 (beginning January 1, 2019), even though the requirement to have coverage still exists.

In response, six states have passed laws with requirements similar to the ACA’s individual mandate. Three of these six states— California, Rhode Island, and Vermont— have individual mandate requirements that went into effect January 1, 2020.

Massachusetts has the oldest individual mandate requirement, which began in 2007. New Jersey and Washington, DC also have individual mandate requirements. See the chart below for information about the details of each state’s laws.


StateEffective YearDescription of Requirement
California2020Reinstates an individual mandate similar to the ACA’s, requiring MEC for both adults and their dependents. Though this penalty varies based on income and household size, generally, non-compliant adults will be subject to a minimum penalty of $695 when filing a 2020 state income tax return in 2021.
District of Columbia2019Reinstates the ACA’s penalty, while setting a maximum penalty equivalent to the cost of DC’s bronze-level plan’s yearly premium.
Massachusetts2007Enacts individual mandate penalties dependent on the individual’s income; those with incomes 150%-300% of the FPL pay penalties equivalent to half of the lowest priced ConnectorCare premium, individuals earning 300% or more of the FPL pay half the lowest cost Bronze premium.
New Jersey2019Reinstates the ACA’s penalty and establishes a maximum penalty equivalent to the cost of the average yearly premium for the state’s bronze-level plan.
Rhode Island2020Reinstates the ACA’s penalty, while also establishing a maximum penalty equivalent to the cost of the average yearly premium for the state’s bronze-level plan.
Vermont2020No penalty for lack of insurance; instead, data will be used to target areas in need of outreach programs which help residents enroll in affordable coverage.


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Monica Bryant