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

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Updated: October 17, 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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Each mandate jurisdiction sets its own affordability exemption. For the 2025 tax year, California and Rhode Island exempt you when coverage costs more than 7.28% of household income. Short lapses in coverage are exempt too, with limits of 63 days in Massachusetts, up to three months in California and less than three consecutive months in New Jersey, Rhode Island and Washington, D.C.

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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. Massachusetts had already required coverage since 2006, New Jersey and Washington, D.C., added mandates in 2019, and California, Rhode Island and Vermont followed in 2020. 

California’s penalty depends on the filing threshold, which is the income level that requires you to file a tax return. For the 2026 tax year, a single filer under 65 with no dependents has a threshold of $22,941 and pays the $950 flat penalty until household income passes $60,941. Above that, 2.5% of household income over the threshold produces a larger 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., now have their own mandates, and Massachusetts has had one since 2006.

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 the mandates in California, New Jersey, Rhode Island and Washington, D.C. Massachusetts uses a separate standard called Minimum Creditable Coverage (MCC), which has its own benefit and deductible rules. 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

For the 2025 tax year, the penalty is $950 per adult and $475 per child, up to $2,850 per household, or 2.5% of household income above the state filing threshold, whichever is higher. It can’t exceed the statewide average Bronze premium, which is $4,524 a year per person for 2025 and $5,040 for 2026. The Franchise Tax Board hasn’t published 2026 flat amounts.

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

For 2026, the penalty depends on income as a share of the federal poverty level (FPL). Adults at or below 150% FPL ($23,475 for one person) owe nothing. The full-year penalty is $312 from 150.1% to 200% FPL, $612 up to 250%, $912 up to 300% and $1,404 up to 400% ($62,600 for one person). Above 400% FPL, it’s $2,532.

The Health Connector sets an affordability schedule each year, and residents it finds unable to afford coverage owe no penalty. MCC plans must cover doctor visits, hospital stays, day surgery, emergency care, mental health care and prescriptions, with in-network deductibles capped at $3,200 for one person and $6,400 for a family in 2026. Short-term and limited benefit plans don’t meet the standard.

New Jersey

Minimum Essential Coverage (MEC)

For the 2025 tax year, one adult pays $695 to $4,908. A family of five with household income of $200,000 or less pays $2,443 to $4,500, and the family maximum climbs to $24,540 above $400,000. New Jersey hasn’t published 2026 ranges, but its online estimator calculates a 2026 figure.

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. Residents with income at or below the New Jersey filing threshold, which was $10,000 for single filers and $20,000 for joint filers in 2025, are automatically exempt.

Rhode Island

Minimum Essential Coverage (MEC)

For the 2025 tax year, the penalty is $57.92 per adult and $28.96 per child for each month without coverage, up to $2,085 a year per household, or 2.5% of household income above the filing threshold, whichever is higher. The total can’t exceed the HealthSource RI average Bronze premium of $357 a month per person, or $4,284 a year. Rhode Island hasn’t published 2026 amounts.

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 a reporting requirement and no financial penalty. Residents who file a Vermont income tax return report whether they had coverage for each month of the year.

Washington, D.C.

Health insurance coverage required

For the 2026 tax year, the penalty is $845 per adult and $422.50 per child, up to $2,535 per family, or 2.5% of family income above the federal filing threshold, whichever is greater. That threshold is $16,100 for single filers and $32,200 for married couples filing jointly. The penalty can’t exceed $4,965 per person, or $24,825 for a household of five or more.

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.   

All five penalty structures rise with income. California, New Jersey, Rhode Island and Washington, D.C., switch to 2.5% of income above the filing threshold once that amount exceeds the flat fee, and Massachusetts sets its penalty by income bracket. 

In Massachusetts, the 2026 penalty for incomes from 150.1% to 400% FPL equals half the lowest ConnectorCare premium at that income. A ConnectorCare plan at that income costs twice the penalty, and it pays medical bills that the penalty leaves to you.

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 every resident who files a Vermont income tax return, and the state uses those answers to contact uninsured residents about coverage options.

California, New Jersey, Rhode Island and Washington, D.C., cap their penalties at the average Bronze-tier premium in each jurisdiction. Massachusetts caps its penalty at half the lowest premium you’d qualify for through the Health Connector. In all five, the fine buys no coverage, so a hospital bill still falls entirely on you.

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HEALTH INSURANCE EXEMPTIONS

A Bronze-tier plan is the least expensive ACA coverage tier. Each mandate jurisdiction decides when coverage costs too much for your income, and it exempts you from the penalty when it does.

For the 2025 tax year, California and Rhode Island treat coverage as unaffordable once it costs more than 7.28% of household income. New Jersey applies its test to the lowest-cost Bronze plan after tax credits and lists the current percentage on the Division of Taxation’s exemption application. Washington, D.C., decides affordability through an exemption application to DC Health Link.

Massachusetts has no single percentage. The Health Connector sets an affordability schedule each year, and residents at or below 150% FPL, $23,475 for one person in 2026, owe no Massachusetts penalty. Anyone above that line who couldn’t afford coverage can file a hardship appeal with the Health Connector.

Short lapses in coverage are exempt, though each jurisdiction sets its own limit. Massachusetts allows 63 consecutive days, which the Health Connector counts as three calendar months, and California allows up to three consecutive months. New Jersey, Rhode Island and Washington, D.C., allow less than three consecutive months.

California, New Jersey, Rhode Island and Washington, D.C., also exempt members of health care sharing ministries, members of federally recognized tribes and people serving a jail or prison sentence. Each of the four offers a religious exemption as well. California and Rhode Island grant it through Covered California and HealthSource RI, New Jersey grants it through the Division of Taxation’s exemption application, and Washington, D.C., lets you claim it on your D.C. tax return. Active-duty military status isn’t an exemption in any of the four, and California, Rhode Island and Washington, D.C., list TRICARE as qualifying coverage.

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. U.S. health care spending reached $15,474 per person in 2024, 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, which are the prices hospitals list 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

    U.S. spending on retail prescription drugs reached $467 billion in 2024, up 7.9% from 2023, according to CMS. Uninsured patients pay full price for every prescription.

    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. California, Massachusetts, New Jersey, Rhode Island and Washington, D.C., still fine residents who go without coverage. Vermont requires coverage but charges no fine.

    You’ll owe the penalty at state tax time once a lapse in coverage passes your state’s limit. A lapse of three consecutive months triggers the penalty in New Jersey, Rhode Island and Washington, D.C. California charges it once a lapse passes three months, and Massachusetts once a lapse passes 63 days.

    California, New Jersey, Rhode Island and Washington, D.C., charge the higher of a flat fee per person or 2.5% of 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, federal premium tax credits end at 400% of the federal poverty level, which is $62,600 a year for a single adult. Below that income, the credit lowers your monthly premium. 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 every one of them except Vermont penalizes residents who go uninsured. 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, New Jersey, Rhode Island or Washington, D.C., confirm your plan qualifies as MEC before your next tax filing. Massachusetts residents need a plan that meets MCC standards.

Uninsured residents in the five penalty jurisdictions can enroll through their state marketplace, which is Covered California, the Massachusetts Health Connector, Get Covered New Jersey, HealthSource RI or DC Health Link. Save any Form 1095 you receive with your tax records each year. The Marketplace sends Form 1095-A, insurers and government programs send Form 1095-B, and job-based coverage appears on Form 1095-B or Form 1095-C.

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About Mark Fitzpatrick

Mark Fitzpatrick, Licensed P&C Insurance Expert, MoneyGeek

Mark Fitzpatrick is a licensed Property and Casualty (P&C) Insurance Producer and MoneyGeek's resident expert in insurance and economics. In nearly a decade covering the insurance market at LendingTree and MoneyGeek, he's analyzed 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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