Updated: October 6, 2025
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Federal insurance rules ended in 2019, but residents in five states and D.C. still face fines without coverage.
You won't pay fines if coverage costs too much (over 8.5% of income), conflicts with your faith or you're only briefly uninsured (less than 63 days).
If you go uninsured, you'll save on monthly premiums but risk massive medical bills. A single emergency can cost more than years of coverage.
You don't need health insurance at the federal level as of 2019. But some states require coverage and impose penalties. California residents, for instance, face fines exceeding $2,000 for going uninsured.
The ACA initially required most Americans to obtain health insurance or pay a tax penalty. This "individual mandate" aimed to create a broader, healthier insurance pool and reduce overall health care costs. Congress actively enforced the individual mandate from 2014 to 2019.
California, Massachusetts, New Jersey, Rhode Island, Vermont and Washington, D.C., require residents to have health insurance. Penalty amounts vary per state. Exemption criteria and coverage standards differ since each jurisdiction sets its own rules. Check your state's specific regulations to avoid penalties.
California | Minimum Essential Coverage (MEC): Employer plans, Covered California plans, Medicare Parts A & C, student plans, COBRA, Tricare, government programs | Adult: $900 or 2.5% of gross income over filing threshold (whichever is higher); for full details, please visit the Franchise Tax Board website. | Short-term and limited-benefit plans don't qualify. Medicare Part B alone doesn't qualify. Exemptions via state tax return or Covered California website. |
Massachusetts | Minimum Creditable Coverage (MCC): Employer plans meeting MCC standards, Health Connector plans, Medicare, MassHealth, COBRA, Tricare | 150.1%–200% FPL: $25/month ($300/year); 200.1%–250% and higher amounts apply up to above 500% FPL, which you can read about here. | The affordability schedule determines if insurance costs too much. MCC covers preventive care and emergency services. Short-term and limited benefit plans don't meet standards. |
New Jersey | Minimum Essential Coverage (MEC) | Individual: $695–$4,284; Family of five (≤$200,000 income): $2,443–$4,500. The amount varies with higher income levels, which you can find here. | Penalty caps at average Bronze plan cost. System based on household income and family size per NJ Health Insurance Market Protection Act of 2018. |
Rhode Island | Minimum Essential Coverage (MEC) | 2.5% of yearly household income OR flat fee ($57.92/adult, $28.96/child per month without coverage), whichever is higher. | Penalty calculated monthly (1/12th annual amount per month without coverage). Total penalty capped at average Bronze plan cost through HealthSource RI. |
Vermont | Reporting requirement only | No penalties imposed | Only state with reporting requirement but no financial penalties. Residents over 18 report coverage status on state taxes. |
Washington, D.C. | Health insurance coverage required | $745/adult, $372.50/child; Maximum $2,235/family; 2.5% of family income over federal tax filing threshold (whichever is greater) | Exemptions via tax return or D.C. Health Link. Penalty revenue supports marketplace operations and premium assistance programs. |
Health insurance requirements vary by state and change frequently. This information is for educational purposes only and should not be considered legal or tax advice. Always consult your state's official resources, a qualified insurance professional or tax advisor before making coverage decisions that may affect your legal compliance or financial situation.
You may qualify for financial hardship exemptions when the lowest-cost Bronze plan available through your state's marketplace exceeds 8.5% of your household income, after accounting for any available premium tax credits. For example, a Massachusetts resident earning $15,000 yearly would be eligible if the Bronze plan cost over $106 monthly.
Religious groups and health care sharing ministry members qualify with documented practice history. Active-duty military, prisoners and tribal members receive automatic exemptions, and coverage gaps under 63 days don't trigger penalties.
You don't need to send the IRS proof of your health coverage at the federal level anymore, but you should keep any documentation with your other tax records, including Forms 1095-A, 1095-B, or 1095-C. States with mandates handle proof differently. For example, California residents check the “full-year health care coverage” box (line 92) on their state return if they had qualifying coverage all year.
Below are documents you might need as proof of coverage:
Marketplace coverage with subsidies | Form 1095-A from the Marketplace, not the IRS |
Employer-sponsored insurance | Form 1095-C from employers with 50+ employees |
Medicare | Evidence of Coverage (EOC) sent each fall; Form 1095-B as you participated in a government program |
Medicaid and CHIP | ID card you received after enrolling in the program; Form 1095-B to show you participated in a government program |
State tax filing | Forms 1095-B or 1095-C from insurers/employers |
Marketplace verification | You'll have at least 90 days from the date of your eligibility notice to resolve the health insurance issue. |
University enrollment | Insurance card or proof of comparable coverage |
Claiming exemptions | Income documentation, hardship proof |
HRAs (Health Reimbursement Arrangements) can be a great way to meet individual mandate requirements in states requiring health coverage. The IRS recognizes qualified HRAs as minimum essential coverage (the baseline level of health insurance required under the ACA), so they count toward ACA compliance.
Your employer might offer two HRA options that help with mandate compliance.
Your employer must offer the HRA to all eligible employees in the same class, and you cannot have other group health plan coverage to participate in an Individual Coverage HRA.
You should get health insurance if you live in a state that requires it or if you want financial protection from medical costs. Without coverage, a single emergency room visit averages $2,200, though costs vary significantly by location, facility type, and treatment complexity. Health insurance turns these unpredictable expenses into fixed monthly premiums and capped yearly costs.
Choose coverage based on your health needs, finances and comfort with risk. Higher coverage costs more monthly but saves thousands when you need care. Consider these factors to find your balance:
Pick comprehensive coverage if you have chronic conditions or take expensive prescriptions.
Consider high-deductible plans only if you can cover $5,000 to $10,000 in surprise medical bills. Weigh monthly savings against potential medical bills you'd face.
Usually, older people in the family have higher requirements than healthy single adults.
Verify your doctors accept the plan before enrolling.
Federal health insurance requirements ended in 2019, though five states and Washington, D.C., continue to require coverage. Without insurance, you pay the full cost of medical care, and even routine treatment can wipe out months of savings.
The coverage you need varies based on your health and finances. Save your insurance paperwork for tax season, especially if you live in a state with coverage requirements.
We answer key questions on mandatory health insurance:
You can go without health insurance in most states. Six jurisdictions (California, Massachusetts, New Jersey, Rhode Island, Vermont and Washington, D.C.) have mandates in place. Going uninsured creates financial burden as emergency visits or surgeries cost thousands out of pocket.
Texas doesn't require health insurance, and the state imposes no penalties. Federal requirements also ended in 2019. But going uninsured in Texas still means risking thousands in medical costs for emergencies, surgeries or chronic conditions.
If you don't have health insurance, you face state penalties in six jurisdictions plus substantial financial risk. You'll miss free preventive care like annual checkups and vaccinations. Medical debt can lead to bankruptcy; minor injuries become major expenses.
Self-employed people follow the same rules as other residents in their state. You can deduct health insurance premiums as a business expense. Consider marketplace plans for subsidies if your income qualifies.
College students must meet their state's health insurance requirements, as mandated by many colleges. Approved student health plans typically qualify as minimum essential coverage. Students can stay on parents' plans until age 26 or purchase coverage through the health insurance marketplace.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
He writes about economics and insurance, breaking down complex topics so people know what they're buying.
