Individual Shared Responsibility Payment
If you’re not eligible for an exemption, you’ll have to pay a penalty if you don’t have either of these:
- Minimum essential coverage
- Qualifying health insurance
This is known as the shared responsibility payment. If you’re only covered for part of the year, it can be prorated to apply only to the months you aren’t insured or exempt.
Remember, paying the shared responsibility payment doesn’t mean you now have health insurance. You’ll still be responsible for all of your medical costs, plus the penalty.
The shared responsibility payment for not having insurance is calculated two ways. You’ll pay either a percentage of your household income or a flat fee — whichever is higher.
Figuring your penalty
The penalty for not having insurance for 2015 will be the larger of these:
- 2% of your household income (only the amount above the filing threshold will be used to calculate the penalty). The maximum penalty is the national average premium for a bronze plan.
- Flat fee of $325 per person in the household ($162.50 per child under age 18)
Ex: If a family of four (two adults and two children under age 18) making $62,000 was uninsured for the entire year, they would pay a penalty of $828. Let’s look at how we determined this amount:
- Percentage of income: ($62,000-$20,600) x 2% = $828
- Flat dollar: ($325 x 2)+($162.50 x 2) = $975
- 2016 — The percentage increases to 2.5% of your household income, and the flat fee will be $695 per person ($347.50 per child under age 18).
- After 2016, the amounts will be adjusted for inflation.
You’ll pay whichever of these is less:
- The penalty amount
- An amount equal to the national average premium for bronze-level coverage — currently $207 ($2,484 a year) for each individual
If you qualify for an exemption, you won’t have to pay the shared responsibility payment. To learn more, see the Exemptions From the Shared Responsibility Payment tax tip.
If a business doesn't pay taxes, what will the IRS do? Learn about penalties for businesses and get tax answers at H&R Block.
Does the early 401k withdrawal penalty apply if it was your only source of income for the year? Learn more and get tax answers at H&R Block.
Learn more about short sale tax implications with advice from the tax experts at H&R Block.
Did you contribute more than the annual limit to one or more of your IRAs? Explore your options for avoiding a penalty. Get tax answers at H&R Block.