468 / What was the penalty for an individual who chooses to remain uninsured under the Affordable Care Act?

Editor’s Note: The 2017 tax reform legislation repealed the Affordable Care Act individual mandate that required individuals to purchase health insurance or pay a penalty for tax years beginning after December 31, 2018. The employer mandate and reporting requirements were not repealed. Late in 2019, the 5th Circuit Court of Appeals held that the individual mandate was unconstitutional. The rest of the ACA continues to be effective.

If a taxpayer who is an applicable individual, or an applicable individual for whom the taxpayer is liable, fails to meet the requirement of maintaining minimum essential coverage for one or more months, under prior law, a penalty was imposed.¹ If an individual on whom a penalty is imposed files a joint return for the taxable year including that month, the individual and spouse were jointly liable for the penalty.²

The penalty schedule is shown in the Uninsured Penalty Table, below.³

UNINSURED PENALTY TABLE**
Year	Flat Penalty Per Adult	Flat Penalty Under Age 18	Household Maximum Penalty	Income Percentage Penalty
2014	$95	$47.50	$285	1%
2015	$325	$162.50	$975	2%
2016-2018	$695*	$347.50*	$2,085*	2.5%
* Indexed for inflation after 2016 ** Penalty will not apply after 2018.

If the penalty applies, a flat penalty applies per each uninsured adult or child under age 18 in a household. The penalty is increased to an amount equal to the income percentage multiplied by the amount of household income in excess of the income tax return filing threshold, if that is greater than the flat penalty. The dollar amount penalty cannot be greater than the household maximum penalty, which is 300 percent of the flat dollar amount; ⁴ in the case of the income percentage penalty, it cannot be greater than an amount equal to the national average premium for a bronze plan for the applicable family size involved.⁵