individual mandate

What is the individual mandate?

  • There is still an individual mandate penalty for people who are uninsured in 2018 (assuming they don’t qualify for an exemption). The penalty for being uninsured in 2018 will be assessed on tax returns that are filed in early 2019.
  • The amount of the penalty in 2018 is unchanged from 2016 and 2017. It’s either $695 per uninsured adult (half that amount for a child), OR 2.5 percent of household income, whichever is greater.
  • The mandate penalty will be eliminated after the end of 2018. People who are uninsured in 2019 and future years will not have to pay a penalty when they file tax returns for those years. But the tax returns filed in 2019 (for the 2018 tax year) will still include the penalty.
  • States can implement their own individual mandate penalties. Massachusetts has one that pre-dates the ACA. The District of Columbia and New Jersey are on the brink of implementing individual mandate penalties, and other states are considering them.
  • In 2018, the Trump Administration expanded access to hardship exemptions from the federal penalty. Hardship exemptions are now available if you’re in an area where only one insurer offers plans in the exchange (or if there are no insurers offering exchange plans at all, but that didn’t happen anywhere in 2018, and the federal mandate penalty will no longer apply in 2019 and beyond), or in an area where the only affordable exchange plans include abortion coverage and that conflicts with your beliefs. Hardship exemptions are also available if you “experience personal circumstances that create a hardship in obtaining health insurance coverage under a QHP,” because, for example, you need access to a specialist who isn’t in-network with any of the plans available in the exchange.

The Affordable Care Act requires nearly everyone to have health insurance that meets minimum standards. With some exceptions, people who do not maintain ACA-compliant health insurance coverage pay a penalty.

The GOP tax bill that was enacted in late 2017 will eventually repeal the individual mandate penalty, but that won’t take effect until 2019. People who are uninsured in 2018 will still face a penalty (the same penalty that applied for 2017), but people who are uninsured in 2019 will not be subject to a penalty. The penalty is collected on tax returns, so people who are uninsured in 2018 will pay their penalty in 2019.