These 5 states still punish you for not having health insurance
Millions of Americans may have decided to forgo health insurance this year after federal subsidies expired during the COVID-19 pandemic, but those living in certain areas may be paying penalties for that choice.
While the federal government stopped penalizing Americans without health insurance in 2019, four states and Washington, DC continue. The penalties, which are usually paid when filing federal tax returns, are designed to encourage healthy people to buy insurance to help lower costs for everyone.
These penalties are sometimes called “shared responsibility payments” in the sense that it is everyone’s responsibility to make health care available, affordable, and accessible — even if you cannot afford affordable health care yourself. The only ways to avoid penalties are to get an exemption or buy health insurance.
“The penalties can be very severe,” said Kiersten DeFluri, a Medicare specialist at Daniel A. White & Associates.
Where Are the Fees for Shared Work?
Americans in California, Massachusetts, New Jersey, Rhode Island, and Washington, DC still face penalties for not having health insurance.
How Much Are the Penalties?
Penalties vary by location, but are usually a lower amount per person or a percentage of income, whichever is higher, but limited to what the lowest-rated health plan would cost.
California: Non-exempt Californians and their dependents each month in 2025 and who are not exempt will pay $950 per adult or older and $475 per dependent child, or 2.5% of their gross income above their filing status threshold. It depends on which one is higher, according to the California Franchise Tax Board. The fine for a married couple without coverage can be $1,900 or more, while the fine for a family of four with two dependent children can be $2,850 or more, she said.
In Massachusetts: Massachusetts levies fines based on income, with caps based on the more expensive 2025 ConnectorCare plan or the less expensive individual copper premium from the Affordable Care Act marketplace.
New Jersey: New Jersey charges an amount based on income and family size and is calculated from the statewide average annual fee for New Jersey copper health plans. The minimum fine for a single adult is $695 to $4,908 a month depending on income, according to the state website.
Rhode Island: Rhode Islanders who were uninsured last year will pay a lower premium of $57.92 per month per adult and $28.96 per child under 18 or 2.5% of adjusted gross income that exceeds the state filing limit, whichever is higher. The total amount cannot exceed the average monthly cost of $357 for a copper-level health plan from the ACA exchange.
Washington, DC: Washington, DC taxes each adult $795 per month and $397.50 per child, up to $2,385 per family or 2.5% of family income above the federal tax filing threshold, whichever is greater. Total payments are limited by the premium rate of the copper plan.
Are Penalties Less Than a Health Insurance Policy?
Since the penalties are supposed to discourage people from going without health insurance, they usually won’t save much money, if any, experts say.
Assume that a New Jersey senior will pay a minimum monthly penalty of $695, DeFluri said. Copper plans in Jersey City, New Jersey can run between $350 and $1,400 a month, “with a good plan around $800 a month,” he said.
It might make sense to pay at least for catastrophic or bronze-level health insurance or maybe add $100 more than you would pay for good insurance premiums, he said.
Also, the cost of “doctor visits and fees is probably more than basic health insurance,” says Miklos Ringbauer, founder of MiklosCPA Inc. in Southern California.
How Can People Avoid Penalties?
To avoid penalties, people living in these states and DC can see if they qualify for an exemption or buy a smaller health insurance plan to meet the requirement.
Exemptions typically include financial hardship, inability to pay for insurance (where premiums for the basic plan exceed a set percentage of family income), short coverage gaps typically of three months or less or income below tax filing limits.
If you need to buy health insurance, Ringbauer said check out government subsidies that can help lower insurance costs. More than 20 states have state exchanges that can help fill the gap left when additional federal funding expires.
“These states’ exchanges are strong enough right now” financially to provide funding this year, he said.
Medora Lee is a money, markets, and personal finance reporter for USA TODAY. You can find him at [email protected] and sign up for our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
This article first appeared in USA TODAY: These five states still punish you for not having health insurance
Reported by Medora Lee, USA TODAY / USA TODAY
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