Is Health Insurance Required? Everything You Need to Know in 2026

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Updated: August 31, 2026

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Key Takeaways
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Health insurance isn't required by federal law, but five states and Washington, D.C., mandate coverage. California, Massachusetts, New Jersey, Rhode Island and Washington, D.C., impose financial penalties. Vermont requires coverage reporting but charges no fine.

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Exemptions exist when the least expensive ACA plan in your state costs more than 8.5% of your household income after any available subsidies. Religious objectors with documented practice history also qualify. So do people with coverage gaps shorter than 63 days.

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If you go uninsured, you will save on monthly premiums but will be left paying full price for care. A single emergency room visit averages $2,200 out of pocket, and a hospital stay can cost tens of thousands more.

Do You Have to Have Health Insurance?

Health insurance is not required by federal law. But that simple answer masks two decades of shifting rules, and where you live determines what the mandate actually means for you today. Five states and Washington, D.C., have their own coverage mandates.

From 2014 to 2018, the Affordable Care Act (ACA), the federal law that restructured U.S. health insurance markets, required most Americans to carry health insurance or pay a federal tax penalty.

If only sick people buy insurance, premiums rise for everyone. A broader risk pool of healthy and sick enrollees kept costs lower across the entire market. 

Congress ended that federal penalty in 2019. Five states and Washington, D.C., immediately built their own versions of the rule. We applied California's penalty formula to calculate that the income-based calculation overtakes the $950 flat fee at approximately $93,850 in gross income for a single adult. In many income brackets, a subsidized plan costs less per year than the state penalty.

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WHAT WAS THE INDIVIDUAL MANDATE

The individual mandate was the ACA's rule requiring most Americans to carry health insurance or pay a penalty on their federal tax return each April. The penalty was the higher of two figures: a flat $695 fee per uninsured adult, or 2.5% of household income above the filing threshold. Whichever produced the larger number applied.

Congress reduced that penalty to $0 starting in 2019, so the mandate carries no practical weight at the federal level. Five states and Washington, D.C., were free to create their own versions, and all six did.

A separate ACA rule, the employer mandate, still applies. Businesses with 50 or more full-time employees must offer affordable health coverage or pay their own penalties. If your employer provides insurance, that requirement hasn't changed.

States That Require You to Have Health Insurance

California, Massachusetts, New Jersey, Rhode Island, Vermont and Washington, D.C., require residents to have health insurance. Exemption criteria and penalty structures differ since each jurisdiction sets its own rules. Check your state's regulations before your next tax filing.

Minimum Essential Coverage (MEC) is the legal term for health plans that qualify under state mandates. Most standard plans count: employer-sponsored insurance, ACA Marketplace plans, Medicare, Medicaid and CHIP. Short-term plans and most limited-benefit plans don't qualify as MEC in any mandate state.

California

Minimum Essential Coverage (MEC): Employer plans, Covered California plans, Medicare Parts A & C, student plans, COBRA, Tricare, government programs

Adult: $950 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: $26/month ($312/year); 200.1%–250% and higher amounts apply up to above 500% FPL. Full penalty amounts are on the Mass.gov TIR 26-1 page.

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-tier 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-tier 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

$795/adult, $397.50/child; Maximum $2,385/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.   

In our analysis of the six mandate penalty structures, most scale with household income rather than a fixed flat fee. Higher earners pay more for going uninsured. Lower-income residents often qualify for premium subsidies that cost less monthly than the annual fine divided by 12.   

Vermont is the only mandate state with no financial penalty. It requires residents to report their coverage status on state taxes and going without insurance carries no fine. The reporting requirement applies to all Vermont residents over 18. 

Two states cap their penalties at the average cost of a Bronze-tier plan. In our review of Rhode Island and New Jersey's penalty structures, uninsured residents in those states never pay more in fines than the cheapest ACA coverage would have cost. The penalty becomes a premium paid to the state rather than an insurer.

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HEALTH INSURANCE EXEMPTIONS

A Bronze-tier plan is the least expensive ACA coverage tier. You qualify for a hardship exemption when the cheapest Bronze-tier plan in your state's marketplace costs more than 8.5% of your household income after any premium tax credits.

A Massachusetts resident earning $15,000 a year, for example, would qualify if the Bronze-tier plan costs more than $106 monthly. Check your state marketplace to confirm whether this threshold applies to your income.

Members of recognized religious groups and health care sharing ministries qualify with documented practice history. Active-duty military members, incarcerated individuals and tribal members are automatically exempt. A coverage gap shorter than 63 days doesn't trigger penalties in any mandate state.

What Happens if You Don't Have Health Insurance?

If you don’t have health insurance, you pay the full cost of every medical bill when you get sick or hurt. Americans spend $14,570 per person on health care annually, according to the Centers for Medicare & Medicaid Services (CMS). 

Hospitals must provide emergency treatment under the Emergency Medical Treatment and Labor Act (EMTALA), but they can refuse non-emergency care to uninsured patients. That exclusion matters because 90% of health care spending goes toward chronic and mental health conditions, the kind of ongoing care EMTALA does not require hospitals to provide. Delaying that care makes the conditions more dangerous and more expensive to treat.

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    Going to the Hospital Without Insurance

    Without insurance, you pay full chargemaster rates. The price hospitals charge before insurers negotiate discounts. Costs by severity:

    • Minor treatment like stitches or basic X-rays: $150 to $700
    • Moderate issues like sprains or CT scans: $700 to $1,500
    • Critical conditions requiring surgery: tens of thousands or more

    These ranges are based on Healthcare Cost and Utilization Project (HCUP) hospital billing data. Costs vary by facility type, geographic market and whether the hospital is for-profit or nonprofit.

    Most hospitals have charity care programs and payment plans. Ask about these before leaving. The Affordable Care Act covers many preventive services at no copay for people who get health insurance.

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    Unaffordable Medication Costs

    Without insurance, prescription drug costs average $1,050 a year per person, according to the National Health Expenditures Accounts. Insurers negotiate discounts that cut drug costs by half or more. Uninsured patients pay full price.

    Diabetes patients skip insulin refills when rent is due. Cutting pills in half to stretch a blood pressure prescription is one of the most common cost-cutting workarounds, and one of the more dangerous.

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    Medical Debt

    One in 10 U.S. adults carries medical debt, according to KFF and the Peterson Center for Healthcare. Most people with medical debt cut spending on food and clothing to pay bills. Half drain their savings entirely. Others max out credit cards or take second jobs.   

    Depression and medical debt reinforce each other. People with depression carry medical debt three times more often than others. Cost concerns cause 37% to delay care and 38% to skip needed treatment. Both delays produce more expensive care down the line.

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    Tax Penalties for Not Having Health Insurance

    Congress eliminated the federal tax penalty in 2019. Six jurisdictions still fine residents for going without coverage: California, Massachusetts, New Jersey, Rhode Island, Vermont and Washington, D.C.   

    If you're uninsured for more than three months, you'll owe money at state tax time. The penalty is the higher of two calculations: a flat fee per person or a percentage of household income above the filing threshold.

How Much Health Insurance Should I Get?

In our research, the most common coverage mistake is choosing a plan based only on the monthly premium without thinking through what you'd owe if something went wrong. Coverage amount depends on your health use, your savings and who else is on the plan.

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    You have a chronic condition or take regular prescriptions

    Gold-tier and Platinum-tier plans carry higher monthly premiums. The trade-off is a lower out-of-pocket cap, the most you'd pay in a year before the insurer covers everything. For daily medications, a plan with built-in drug coverage often costs less overall than a cheaper plan with high drug costs added separately.

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    You're healthy and rarely need medical care

    A Bronze-tier or Silver-tier plan, with a high deductible (the amount you pay before coverage starts) keeps monthly costs low. Before choosing one, confirm you have $5,000 to $10,000 in savings for unexpected costs. Without that cushion, one accident erases months of premium savings.

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    You're covering a family that includes older members

    Older family members need more frequent care than healthy young adults. I recommend checking whether the plan uses per-person deductibles rather than a family aggregate. With an aggregate, one member's high costs can exhaust the shared deductible for everyone before year-end.

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    Your primary concern is staying with your current doctors

    Confirm your doctors, specialists and preferred hospital are in-network before choosing a plan. Out-of-network care costs two to three times more, and some plans exclude it entirely. The lowest monthly premium won't stay low after you factor in those visits.

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HOW TO REDUCE WHAT YOU PAY FOR HEALTH INSURANCE
  • Check whether you qualify for premium tax credits before assuming a Marketplace plan is unaffordable. In 2026, subsidies are available to single adults earning $15,960 to $63,840 a year. Many in this range pay far less monthly than the unsubsidized list price. Enter your income at HealthCare.gov to see your subsidy amount before comparing plans.
  • Use in-network providers for every non-emergency service. Out-of-network care costs two to three times more than in-network rates, and some plans exclude it entirely. A single out-of-network specialist visit can cost more than several months of premiums combined.
  • Match your deductible to your savings. A high-deductible plan saves money monthly only if you can cover the full deductible out of savings without going into debt. The break-even point depends on how often you use care and how large your emergency fund actually is.

Is Health Insurance Required by Law

Health insurance isn't required by federal law. Five states and Washington, D.C., require coverage and penalize residents who go uninsured. Vermont requires reporting but charges no fine. Without coverage, you pay full price for care, and a single hospitalization can generate more debt than a year's worth of premiums would have cost.   

Coverage level depends on your health, your savings and your family's needs. If you live in California, Massachusetts, New Jersey, Rhode Island or Washington, D.C., confirm your current plan qualifies as MEC before your next tax filing.   

Uninsured residents should check HealthCare.gov before open enrollment opens November 1. Save Forms 1095-A, 1095-B and 1095-C with your tax records each year

Frequently Asked Questions

We answer key questions on mandatory health insurance:

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About Mark Fitzpatrick

Mark Fitzpatrick, Licensed P&C Insurance Expert, MoneyGeek

Mark Fitzpatrick, a licensed Property and Casualty (P&C) Insurance Producer in Connecticut, is MoneyGeek's resident expert in insurance and economics. He has spent nearly a decade covering the insurance market at LendingTree and MoneyGeek, analyzing hundreds of carriers and millions of rates across auto, home, renters, health and life insurance.

His work has appeared in The Washington Post, The New York Times and NPR. He draws on independent cost and consumer experience data, and no insurance company partnerships affect his recommendations.

Mark studied at Boston College and later earned a master's in economics and international relations from Johns Hopkins University. He worked in financial risk management at State Street before joining MoneyGeek. He's also a five-time “Jeopardy!” champion.

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